CBP's Smith Signs Off on Broker Regulatory Update Package

There are some new signs of progress for an update to customs broker regulations in 19 CFR Part 111, said Brenda Smith, executive assistant commissioner in the CBP Office of Trade, during an April 10 interview. Smith gave her approval to a regulatory package on the subject around two weeks ago, she said. "It's moving," but there still are "a lot of people that need to sign off on it," including within CBP, she said. Even so, "it's out of the Office of Trade, which is more progress than we've ever made before."

The Treasury Department will also need to give approval and CBP has had "mixed success" there for regulatory changes, Smith said. CBP does have a good relationship with Tim Skud, Treasury's deputy assistant secretary for tax, trade, and "he, I think, is aware of and supportive of what we are trying to do," she said. There may be some questions about the details involved and "there's always a healthy debate between us." Smith said there's hope that a proposed rule would be out by the end of the calendar year. CBP said last year it expected the update to include changes to powers of attorney and cybersecurity requirements (see 1704040086).

CBP is at the moment keeping the Part 111 regulatory package separate from a rulemaking on new importer validation requirements for customs brokers outlined in the Trade Facilitation and Trade Enforcement Act of 2015. Smith said she also hopes to see a proposal out for the validation requirements by the end of 2018. Section 116 of TFTEA required CBP to establish minimum standards for what importers need to provide to brokers, and what brokers need to collect from importers and provide to CBP, to validate the importer’s identity (see 1602170074).

The Enforce and Protect Act procedures for fighting antidumping or countervailing duty evasion under TFTEA "have worked out very well" despite some early trepidation for the new processes, Smith said. There's been some clarity on what makes for a good EAPA allegation, and foreign governments have been helpful in allowing for foreign verifications, she said. Those governments were receptive to CBP's explanation that "it does your economy no good to have somebody else take advantage of you by saying these are your products when in fact they're not," she said. CBP made its second final determination under EAPA last month (see 1803190032).

Despite the good experiences so far, "we, from my perspective, are not ready to issue a final rule," Smith said. Among areas of potential future improvements within EAPA, there are some practical document management issues "that we'd like to support through automation," she said. Also, there are some "legal nuances" around the definition of "parties," she said. "We've certainly had some conversations with Congress on those issues," she said. In written responses to questions from Sen. Sherrod Brown, D-Ohio, in October about EAPA, CBP Commissioner Kevin McAleenan said that "CBP has developed a legislative proposal that is currently being vetted through the interagency clearance process."

While most of the major TFTEA provisions are largely in place, "operationally, the thing that we still have on our plate is risk-based bonding," she said. There's "a lot of data crunching" involved in considering some proposed approaches, Smith said.