Minimum of a Year Necessary Before Brokers Can Comply With New Regulations, NCBFAA Says

Full compliance with the CBP proposal to revamp multiple government standards customs brokers are required to meet (see 2006040037) would likely take at least a year to complete, and potentially more, the National Customs Brokers & Forwarders Association of America said in comments filed Aug. 4. The updates would require dramatic changes during an already especially complex time in the industry and the broader economy, it said. Comments in the docket are due Aug. 4.

Many brokers will “need to reorganize their operations to adjust, adapt and in some cases restructure to accommodate the new regulatory regime,” the group said. “This has become particularly complex in light of shelter in place orders and other jurisdictional work-related restrictions, decreased and shifting trade flows that have impacted the financial well-being of our member’s importer-clients and the Government’s operational limitations due to the pandemic.”

The CBP efforts to “professionalize” customs brokers may be well-intentioned, but the numerous changes to the import and entry process in recent years don't “warrant additional regulation in the name of professionalism,” the group said. At the same time, “should CBP seek ways to 'professionalize' the industry we suggest that CBP issue” proposed regulations on continuing broker education requirements “that would require all customs brokers to meet such education criteria in an efficient and effective manner at no or limited cost.” The group also questioned the need for “resorting to a more drawn out process first involving” a broker education advance notice of proposed rulemaking (see 2007130007).

CBP’s proposal should be revised to allow for brokers to hold multiple national permits rather than a single one, the NCBFAA said. “CBP will need to provide clear guidance and adequate time for customs brokers to transition and adapt to the new paradigm,” it said. “CBP could alleviate many of the preoccupations, as well as potential legal challenges, associated with the national permit in the short as well as long term if it recognizes that customs brokers may hold multiple national permits if they maintain separate, although related, business entities and allow for more than one licensed broker to qualify for the permit.”

Several of the proposed new factors for CBP’s standard for responsible supervision and control need fixing, the association said. Those new factors “create a subjective, slippery slope under which CBP will arbitrarily adjudicate a customs broker’s behavior,” it said. Criteria based on “timeliness,” “communications,” and “responsiveness,” would make developing and enforcing the policies nearly impossible, it said. The NCBFAA also said CBP should hold customs brokers to the Customs-Trade Partnership Against Terrorism program cybersecurity standards instead of “imposing an overly broad, all-encompassing and vague standard,” as proposed.

As others' comments said (see 2008030042), requiring brokers to report attempts of illegal activity by a client to CBP is too much, the group said. CBP should “remove its proposed requirement that would require customs brokers to concomitantly serve as the judge, jury and prosecutor of its clients suspected of wrongdoing,” the association said. The current “standard adequately and clearly sets forth the broker’s obligation to refrain from filing false information with CBP,” it said. “To the contrary, CBP’s proposed standard is one that customs brokers cannot meet nor CBP has the legal authority to require them to meet.”