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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 E stablished January 2011 by CBP in partnership with NCBFAA COAC Role of the Broker Working Group

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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 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
k ey elements of this initiative
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
broker examination licensing
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
Broker Permitting
  • Should CBP reconsider current permitting requirements, which are based on geographical location?
broker permitting1
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  • Permitting is outdated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
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
importer bona fides
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 fides1
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
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
Continuing education
  • Should continuing education be mandated in order to hold a customs broker license?
continuing education1
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
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 professionallicense
won t this be hard to obtain
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
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
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
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
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 regulations1
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
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
Other Issues
  • ACE Update
  • Broker Exam
  • Broker-Known Importer Trusted Trader Program
websites and communication tools
Websites and communication tools

Questions/Comments/Concerns related to the regulatory rewrite, email us at

Questions/Comments/Concerns related to general broker management, email us at

Our Broker Management website:

Our trade transformation website: