Trade Groups Object to CBP Reporting Requirement for Brokers That Suspect Importer Fraud

The CBP proposal to require brokers to report to the government a client's attempts of illegal activity (see 2008040038) is an “unreasonable responsibility to place on a broker,” the U.S. Chamber of Commerce said in comments. That feeling is shared by several other trade associations that filed in the CBP docket on proposed updates to customs brokers regulations. The idea “shifts a burden that should be placed on the CBP as a law enforcement agency onto the broker instead” and directs brokers to “determine the intention of the noncompliance, error, or omission,” the Chamber said.

The requirement would force brokers to “always consider malicious intent behind a client’s actions because of the potential liability should the client be found to be attempting to defraud or otherwise commit a criminal act against the U.S. government,” it said. The added liability “would undermine the professional trust a client must place in a broker to help navigate the customs processes and rules.” That “loss of professional trust far outweighs the benefits CBP expects to see from this requirement,” the Chamber said.

CBP itself expects only minimal action as a result of such a requirement, the U.S. Fashion Industry Association said. “CBP acknowledges that the number of reports is likely to be limited and estimates approximately five reports annually,” it said. As written, the proposal seems to extend to all federal law, including “tax and security laws, areas where few if any brokers can be expected to correctly recognize a violation.” At the very least, “the requirement should be limited to the customs laws, an area where a broker is expected to be knowledgeable,” the USFIA said.

The American Association of Exporters and Importers also questioned the need for that requirement. “There could be incidences of false and non-factual information reported to CBP which may harm the reputation and good standing of an importer,” the AAEI said. “This could lead to unnecessary expenses to importers and customs brokers.”

That “section should be stricken from the proposed rule,” the Express Association of America said. “Certainly not all differences of opinion over noncompliance, error or omission are the result of a desire to defraud or commit a criminal act against the U.S. Government,” the EAA said. CBP should instead “continue to encourage the use of e-allegations as a voluntary and anonymous system of reporting potential violations of the law,” it said.