The Role of the Broker:
Changes to Broker Regulations
Part of CBP’s
Trade Transformation Initiatives
Fall 2013
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
Key elements of this initiative
• Overhaul the broker regulations contained in
19 CFR Part 111 (Customs Brokers)
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Broker examination
Licensing
Permits
Definitions
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
processes
• Reflect organizational changes within CBP and
DHS
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• Permitting is outdated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
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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
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
importer
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
license
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
parties
• 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
recommendations:
– Importer bona fides
– Permitting modernization
• CBP also awaits guidance from the NCBFAA
broker workgroup on permitting
modernization
Other Issues
• ACE Update
• Broker Exam
• Broker-Known Importer Trusted Trader
Program
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Websites and communication tools
Questions/Comments/Concerns related to the regulatory
rewrite, email us at RoleoftheBroker@cbp.dhs.gov
Questions/Comments/Concerns related to general broker
management, email us at BrokerManagement@cbp.dhs.gov
Our Broker Management website:
http://www.cbp.gov/xp/cgov/trade/trade_programs/broker/
Our trade transformation website:
www.cbp.gov/xp/cgov/trade/trade_transformation/