CBP's Proposed Form 5106 an 'Overreach of Authority,' Says AAEI

CBP's proposed changes to its Importer ID Input Record (Form 5106) would require companies to provide a overly intrusive level of detail that would not increase importer compliance, said the American Association of Exporters and Importers (AAEI) in comments to CBP on the proposal. CBP requested public comments by Dec. 8 on the proposed revisions in October (see 14100815). The proposal would add a number of new data fields to the form, which are hoped to improve CBP's risk assessment abilities. The agency falls short of that goal with the proposed form, which may instead increase privacy risks, said the trade group.

The association "believes that CBP’s desire for detailed information about a company’s officers for the purposes of conducting an initial risk assessment of the company’s compliance with U.S. customs laws is an overreach of authority with no increase in compliance," it said. Among the proposed new data elements are information on an importer's officers, but, "for most companies whose primary business purpose is anything other than importing and/or exporting, it is unlikely that the corporate officers are going to be the persons who have primary knowledge of import compliance requirements," said AAEI. It's "also unlikely that the employee or even corporate officer responsible for import compliance will be the same person who has sufficient knowledge and responsibility for the financial affairs of the company," information that CBP would also like to have. CBP has said the revisions are necessary to improve CBP's visibility into new importers (see 1410200030).

Among companies with a primary business other than importing or exporting that have more than 1,000 employees, AAEI is unaware of any where the corporate officers are in charge of import or export compliance. That makes it clear that there's no useful risk assessment purpose for collecting the social security and passport numbers for such officers, said AAEI. "The officers of large companies are usually unfamiliar with the day-to-day import operations of the company," and public companies are already subject to other government-required disclosures that CBP could access on its own, the association said.

CBP should keep its focus on new entities rather than apply the data collections "uniformly," said AAEI. Specifically, it seems appropriate to request more information from "a new entity (or one with little importing history of less than a year), a non-resident importer, and/or is a privately-held corporation with a poor compliance record," it said.

The proposal would also create some privacy concerns, it said. The transfer of the detailed personal information from corporate officers would create the need for some new burdensome protections to prevent the theft and misuse of such information, it said. The privacy concerns are even more of a problem for customs brokers, often the party responsible for keeping the data for Form 5106 into Automated Broker Interface, it said. An increase in "the amount of data that brokers handle" will require "a commensurate increase in data security and document access levels within every brokerage firm," it said. "Therefore, in seeking such sensitive information regarding an individual’s background in addition to more social security numbers, CBP is creating more risk for individuals, importers, and customs brokers."

The U.S. Fashion Industry Association also voiced some concerns with the proposal in its comments (here). A better explanation is needed as to why CBP thinks a corporate officer's social security or passport number will improve the process, said USFIA. Also, it's unclear whether the revised form would require updates when there's a change in officers, something the agency now requires for changes in an importer's name or address, it said. "Certainly, an importer that has been operating for a decade or so without problem should not be required to provide personal information about new officers," the group said. "The fact that the importer has been operating for an extended period of time should be more than sufficient to assure CBP that the risk of continuing to deal with that importer, even with new officers, is minimal or non-existent."

Email ITTNews@warren-news.com for a copy of AAEI's comments. ITT is interested in hearing views from others that have filed their comments with CBP. Send comments to ITTNews@warren-news.com.