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Role of the Broker~Role of the Broker~Regulatory RevisionRegulatory Revision
September 16, 2011
The Trade Integrated Planning and Coordination Cell (TIPCC) was established by Commissioner Bersin on June 29, 2010, to review the activities which support CBP’s trade mission and contribute to the nation’s economic security. As part of creating a 21st century vision, the TIPCC generated ideas to transform the role of the broker to modernize and facilitate legitimate trade.
The Role of the Broker-Broker Regulatory Revision Workgroup was established January 2011 by CBP in partnership with the National Customs Brokers and Forwarders Association of America (NCBFAA) to work collaboratively to develop solutions to meet the challenges of 21st Century commerce as it relates to their vital role, exploring the following major topics:
Role of the Broker~Role of the Broker~Regulatory RevisionRegulatory Revision
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Expanded broker role Regulatory modernization
Broker responsibilities Penalty regime/
Professionalism disciplinary actions
The Workgroup will propose concepts that will:
Expand the role of the broker to meet the challenges of 21st Century global trade
Ensure licenses brokers exercise due diligence in conducting customs business
Increase the value of a customs broker license Leverage broker relationships to extend the opportunity for small
and medium enterprises to be recognized as trusted partners
GoalsGoals
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Continuing education requirement to maintain active license
4. Modernization Discontinue Triennial reporting –
replace with automated annual status reporting
Allow upload of employee data into ACE
Provide for reporting of continuing education reporting
5. Penalty Regime Revise statute language to allow
for immediate suspension of license (threats to national security), pending review of case, with due process
Focus on bad actor’s license rather than filer code remediation
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Highlights of Proposed OptionsHighlights of Proposed Options1. Expanded Role “Pre-certification” of C-TPAT
applicants” Pre-application support for ISA
applicants
2. Broker Responsibilities Establish requirement for
importers to present bona fides Require broker to obtain evidence Broker must receive POA directly
from importer Customs business is to be
conducted within the U.S. Customs Territory
3. Professionalism Apprentice prerequisite for broker
license
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Expanded Broker RoleExpanded Broker RoleKey Considerations Key Challenges
Pre-certification of applicants for C-TPAT
Fast-track of importer’s application Allows CBP resources to be
redeployed Additional touch points (expanding
pool of applicants) Expands business potential
Complements other business services
Expands career paths and competencies for brokerage
Reduces costs to CBP
Lack of tangible benefits for applicant Push back from existing service
providers Technology adjustments and enhancements
Cost resistance Longer sales cycle SAFE Ports Act
Pre-application support for ISA applicants
Leverages existing relationship with clients
Potential for ongoing assistance with importers in meeting program requirements
Facilitates reducing the “haystack”
Lack of tangible benefits for applicant Cost resistance Visibility into importers’ compliance
may result in possible conflict – client v. government
Direct competition with CBP services provided
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Broker ResponsibilitiesBroker ResponsibilitiesKey Considerations Key Challenges
More robust importer validation
Establish requirement for importers to present bona fides
Requires broker to obtain evidence of bona fides
Shared responsibility for validating importers’ identify
Strengthens the standard to fix accountability to true party of interest
Should reduce incidents of identify theft
Increased requirements upon importers
Statutory and regulatory changes needed
Resistance to shared responsibility
Customs business and power of attorney (POA)
Broker must receive POA directly from importer to perform customs business on behalf of importer
Increased broker visibility to client Reduces surety risk Customs business is to be
conducted within the U.S. Customs Territory
Freight forwarders will not be able to serve as a POA conduit for customs business
May impact off-shore operations
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ProfessionalismProfessionalismKey Considerations Key Challenges
Enhance customhouse broker licensing criteria
Introduction of “apprenticeship” prerequisite
Continuing education requirement to maintain active license
Increased value of license Higher quality of work products Better educated practitioner Overall increased professionalism
from which the trade community and CBP should benefit
Bandwidth to implement apprenticeship
Resistance from non-practicing customshouse broker
Regulatory change required Automated means to report
requirements have been met Creation of an oversight body for
continuing education administration
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ModernizationModernizationKey Considerations Key Challenges
Discontinue Triennial reporting
Replaced with automated annual status reporting
Allow at will upload of employee data into ACE – minimizes brokers’ administrative burden
Clarify which employees must be reported
Collect only minimal employee data that CBP actively uses
Link continuing education reporting with annual reporting
Leverage ACE portal functionality Efficient/accurate collection of
broker information Establish new definitions of “active”
and “inactive “status
Establishing new fee structure Statutory and regulatory change
required Change requirement for existing ACE
Portal ($$$) Annual requirement to report
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Modernization Modernization (continued)(continued)
Key Considerations Key Challenges
Permitting Scheme
Modernize permit framework to allow for alternative qualification acquisition
Rational approach for providing responsible supervision and control
Reduce reliance on waiver process Equal access via transparency of
alternate qualification criteria Allow for greater flexibility in broker
planning Eliminate unnecessary costs
Administrative fee structure Regulatory change needed Industry resistance CBP resistance Length of time to receive approval for
alternative qualification
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Penalty Regime/Disciplinary ActionsPenalty Regime/Disciplinary ActionsKey Considerations Key Challenges
Revise 19 U.S.C. 1641 language
Provide for immediate suspension of license (threats to national security), pending review of case
Provide due process provision Focus on bad actor’s license
revocation rather than filer code remediation
Establishing expedited process for suspension with due process
Resistance from brokers
September 16, 2011 webinar to socialize concepts with broader audience Continue consultations with CBP stakeholders Brief the Commercial Operations Advisory Committee (COAC) on near
finalized concepts October 4, 2011 Finalize proposal to present to Commissioner Bersin in October 2011
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Next StepsNext Steps
Contact Information:Cynthia F. WhittenburgDirector, Trade Facilitation and AdministrationOffice of International [email protected]