CBP Working on Standardized Procedures for Broker Vetting of Importers, Agency Officials Say

RANCHO MIRAGE, Calif. -- CBP is working on a standardized process for customs brokers to vet their importer clients' powers of attorney, said Julia Peterson, chief of CBP's broker management branch, at the Western Cargo Conference (WESCCON) on Oct. 13. Every importer will be required to provide the same information, and every broker required to vet the same information, which should “level the playing field” and diminish or eliminate “broker shopping,” Peterson said.

"Guidelines and regulations" for the procedures, mandated by Section 116 of the Trade Facilitation and Trade Enforcement Act of 2015 (see 1602170074) are “coming out soon,” said Stephen Hilsen, deputy executive director of CBP's Trade Remedy Law Enforcement Division. Acting CBP Commissioner Kevin McAleenan said he hopes to have the regulations approved and ready for issue, alongside modernizing changes to the Part 111 customs broker regulations, "in the next six months," in separate remarks at WESCCON on Oct. 13.

The information CBP is looking to require that brokers collect “really is the same information that any conscientious broker is already collecting” to protect themselves from being party to identity theft, Peterson said. “Although I can't give you exact components, I think it's going to be something you can get behind,” she said. “I'm sure you'll have some issues, but for the most part it should really help you out.”

CBP is working on a mobile app for importers to submit their Social Security numbers directly so they don't have to be entered in their customs brokers' systems, said Amy Magnus of A.N. Deringer. Standardized rules for vetting importers are “going to be really important for us,” Magnus said. Brokers will be able to more easily establish information about an importer because they will be legally required to do so, she said.

Closely related to the vetting requirements is the importer database required by Section 115 of TFTEA. CBP continues its work to implement a requirement that the agency adjust bonds for importers based on risk assessments, Hilsen said. CBP is looking to finalize criteria for risk of non-payment by early next year, he said. After that, CBP will work with the Commercial Customs Operations Advisory Committee on monetizing that risk and deciding what level of bonding is required. The agency is “looking for a mechanism in which this is actually implementable, and not just cash deposits and live entry,” Hilsen said.

CBP will also “soon” publish an informed compliance publication on the ban on imports produced using forced labor, as modified by TFTEA (see 1603010043). Hilsen's enforcement division is partnering with CBP Regulatory Audit to identify best practices for avoiding such goods and policies companies can implement to show responsible control. “We'll be moving forward with that as a reference for the trade community,” he said.

CBP's enhanced enforcement under TFTEA has been accompanied by the agency's increased use of other, non-TFTEA enforcement tools, said Richard Wortman, a lawyer with Grunfeld Desiderio. Wortman has seen a “major uptick” in broker and importer audits and surveys and right to make entry inquiries. “I probably have more audits going on today than I've had the last five years combined,” he said. CBP has directed its broker management branch to have each officer conduct five broker audits per year, with the goal of auditing every customs broker over the next five years, he said.

Brokers should be aware that CBP has been using regular CF-28 requests for information in the context of Enforce and Protect Act (EAPA) investigations of antidumping and countervailing duty evasion, Wortman said. Brokers could come to find out a CF-28 is part of an EAPA investigation 90 days after they get one, he said. “You have to assume that every CF-28 for an existing AD/CVD case is subject to an EAPA investigation,” Wortman said.