CBP Drafting Broker POA Validation Regulations, Continuing Move to Survey Audit Approach

CBP is currently in the midst of drafting regulatory requirements for broker validation of importer powers of attorney, said Julia Peterson, chief of CBP’s broker management branch, during a June 26 webinar. Required by the Trade Facilitation and Trade Enforcement Act of 2015, the new regulations will have to pass muster with the Trump administration executive order requiring the repeal of two regulations for every one issued, but “I think we have a path,” Peterson said. Though she couldn’t give a date, there’s a “good shot” the proposed regulations could be available in the next six to nine months, Peterson said.

CBP Regulatory Audit “has been moving toward” a survey approach when similar issues arise for several brokers, in part to avoid the time and expense of audits, officials from CBP’s New York audit office said during the same webinar. The agency’s New York office, with specializes in customs brokers, has been focusing most on survey work, but other offices have also been conducting surveys and all offices will emphasize the survey approach in their fiscal year 2018 audit plans, said James Madden, field director of the New York regulatory audit office.

The results of a survey are used to plan whether subsequent action is warranted, including enforcement action or a full audit, said Rachelle Lewis, acting assistant field director of the New York audit office. The approach allows CBP to conduct on-site visits of multiple high-risk companies, providing insight into the broader issue highlighted in the survey and giving CBP a “baseline” to determine whether other brokers with similar risk should be considered in a survey or other action, she said. Since last fiscal year, all brokers subject to surveys and other actions by Regulatory Audit have been issued informed compliance letters, which must be signed and returned to CBP, she said.

Common broker issues discovered by Regulatory Audit include a lack of specific internal controls -- oftentimes they are general or in a template, when they should be customized and specifically say who is responsible for implementing a given control -- as well as a lack of controls for validating powers of attorney and relationships with third parties, Lewis said. The agency has seen powers of attorney with missing dates, unsigned or backdated powers of attorney, and incorrect spelling or importer of record numbers, all of which are violations of 19 CFR 141.46, she said. Best practices include customized controls and procedures, a checklist of validating powers of attorney and identification of responsible personnel for reviewing powers of attorney, she said.