Changes to Broker Regulations - Customs Brokers & International

The Role of the Broker:
Changes to Broker Regulations
Part of CBP’s
Trade Transformation Initiatives
Fall 2013
• Role of the Broker-Broker Regulatory Revision
– Established January 2011 by CBP in partnership with
• COAC Role of the Broker Working Group
– Part of COAC Trade Modernization Subcommittee
– Submitted position paper outlining 17 recommendations
for CBP to consider (October 4, 2011)
– Key recommendation: CBP should recognize the broker’s
role as a communicator and force multiplier to increase
compliance, especially for small- and medium-sized
Key elements of this initiative
• Overhaul the broker regulations contained in
19 CFR Part 111 (Customs Brokers)
Broker examination
Relationship with freight forwarders
Triennial reporting
Importer bona fides
• Add regulations on continuing education
Broker Examination/Licensing
• Account for electronic processes
– Online exam registration and payment
– Global Enrollment System for license applications
• Changes in CBP’s license applicant vetting
• Reflect organizational changes within CBP and
Broker Permitting
• Should CBP reconsider current permitting
requirements, which are based on
geographical location?
Broker Permitting
• Permitting is outdated
– Both CBP and brokers are moving toward centralization
and virtual environments
• Permitting is provided for in statute
– Absent a legislative change, what can we do to make
permitting more business friendly?
Broker Permitting Options
Eliminate permit requirement entirely
Move to national permit only
Broaden district permit waivers
Delineate geographical areas based on time zones or
in some other reasonable manner
• Increase the district permit waiver from 1 year to 3
Importer Bona fides
• Should brokers be required by regulation to
collect some minimal information on their
clients before agreeing to conduct customs
business on their behalf?
Importer Bona fides
• Overwhelming majority of brokers support a “level
playing field” through the regulation of bona fides
(rather than simply provide guidance)
• A short checklist (5 to 10 items) would be preferred
over a “plan” submitted by the broker describing
how importers are validated (would modify Part 141)
• While CBP supports and encourages in-person visits
and review of financial documents, we recognize
that this is not always feasible
Importer Bona fides (continued)
• CBP is considering using CBP trusted trader status to
satisfy bona fides requirements
• CBP Form 5106 (Importer ID) is being overhauled to
more meaningfully capture information about an
Continuing education
• Should continuing education be mandated in
order to hold a customs broker license?
Continuing education
• Almost all professional licenses have a continuing
education or minimum training requirement—
staying current is important
• Broker community is mixed but tips positive; still
some hesitation that education should be mandated
• Expanded CBP‐broker workgroup convened in
February 2013
– Group developed framework for continuing education
– Requirements are for individual license holders
How many hours will I need?
• Individual license holders will be required to take 40
hours of continuing education over 3 years
• This equates to about 1 hour of education a month
• Anything much more than this will be perceived in
the broker community as too burdensome
• Anything much less than this will not be a
meaningful level of education for a professional
Won’t this be hard to obtain?
• Low cost/no cost education opportunities are very
important to both CBP and the broker community
• “Education” will include activities beyond the
traditional classroom setting
• Travel should not be necessary in order to obtain
quality continuing education
Who can provide accredited education?
• CBP will determine which individuals or entities can
accredit coursework
• CBP will not do accreditation (resource constraints)
• CBP will announce an open season to receive
applications from outside entities who are interested
in evaluating and accrediting quality coursework
• CBP will select a small pool from the applicants
(probably 5 to 10)
• After 5 years, CBP will have another open season and
all hopeful accreditors (including incumbents) could
apply again
How do I report my credits to CBP?
• CBP will automate the triennial report
• Certify your credit hours along with your triennial
report and fee
• If any of these four things is missing from your
triennial submission…
1) Indication that you are active
2) Certification of your education credits
3) Triennial report
4) Triennial fee
… then you are issued a suspension notice
– You then have 60 days to respond to CBP to fill in the gap(s)
– If you do not respond, your license is revoked by operation of law
Continuing education (continued)
• COAC Recommendations:
– Minimum of 40 hours over 3 years
– Minimum of 32 hours must be accredited
– CBP should take a measured, commercially reasonable
approach to the 40 hours continuing education
requirement for customs brokers wishing to reactivate a
license that is inactive
– Reporting of continuing education should be tied into the
triennial reporting
– Reporting of the license holder and the reporting of
continuing education be done together in ACE
Proposed regulations
• Result of co-creation
– CBP is incorporating feedback from Summer 2012
roundtables, the CBP webinars, the NCBFAA workgroup,
the CBP-trade workgroup on continuing education, NBCBA,
PCC, Congressional staffers, and the COAC
– This feedback has been critical to our policy development
• Nothing is final; many details to be developed
• CBP is currently making the final decisions to begin
drafting the Notice of Proposed Rulemaking
Proposed regulations
• Internal consultations
– Several meetings per week between Broker
Management Branch and RR attorneys
– Consulting port personnel and other relevant
• Economic analysis required
• Legal reviews within CBP; and DHS, Treasury,
and/or OMB reviews could alter course
Proposed regulations: Next steps
• CBP is waiting for two COAC
– Importer bona fides
– Permitting modernization
• CBP also awaits guidance from the NCBFAA
broker workgroup on permitting
Other Issues
• ACE Update
• Broker Exam
• Broker-Known Importer Trusted Trader
Websites and communication tools
Questions/Comments/Concerns related to the regulatory
rewrite, email us at [email protected]
Questions/Comments/Concerns related to general broker
management, email us at [email protected]
Our Broker Management website:
Our trade transformation website:

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