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Part of CBP’s Trade Transformation Initiatives Fall 2013 The Role of the Broker: Changes to Broker Regulations.

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Presentation on theme: "Part of CBP’s Trade Transformation Initiatives Fall 2013 The Role of the Broker: Changes to Broker Regulations."— Presentation transcript:

1 Part of CBP’s Trade Transformation Initiatives Fall 2013 The Role of the Broker: Changes to Broker Regulations

2 Background Role of the Broker-Broker Regulatory Revision Workgroup –Established January 2011 by CBP in partnership with NCBFAA 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 importers

3 Key elements of this initiative Overhaul the broker regulations contained in 19 CFR Part 111 (Customs Brokers) –Broker examination –Licensing –Permits –Definitions –Relationship with freight forwarders –Triennial reporting –Importer bona fides Add regulations on continuing education

4 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 processes Reflect organizational changes within CBP and DHS

5 Broker Permitting Should CBP reconsider current permitting requirements, which are based on geographical location?

6 Broker Permitting Permitting is outdated –Both CBP and brokers are moving toward centralization and virtual environments Permitting is provided for in statute –Absent a legislative change, what can we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?

7 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 years

8 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?

9 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

10 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 importer

11 Continuing education Should continuing education be mandated in order to hold a customs broker license?

12 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

13 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 license

14 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

15 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

16 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

17 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

18 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

19 Proposed regulations Internal consultations –Several meetings per week between Broker Management Branch and RR attorneys –Consulting port personnel and other relevant parties Economic analysis required Legal reviews within CBP; and DHS, Treasury, and/or OMB reviews could alter course

20 Proposed regulations: Next steps CBP is waiting for two COAC recommendations: –Importer bona fides –Permitting modernization CBP also awaits guidance from the NCBFAA broker workgroup on permitting modernization

21 Other Issues ACE Update Broker Exam Broker-Known Importer Trusted Trader Program 21

22 Websites and communication tools Questions/Comments/Concerns related to the regulatory rewrite, us at Questions/Comments/Concerns related to general broker management, us at Our Broker Management website: Our trade transformation website:


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