CBP Takes on Part 111 Rewrite Myths, Says Brokers Support New Regs on 3rd-Party POA Transfer

Myths

Among the myths floating around are:

• Continuing education means that a broker would have to retake the broker exam every year
• The National Customs Broker and Forwarders Association of America will be the only education provider if a continuing education requirement is established
• There needs to be a licensed broker in every port where an entity does business
• A larger geographical area means the same thing as a district
• Brokers will have to conduct targeting/vetting on their importers
• The customs bond should take care of establishing bona fides because the surety will have essentially conducted validation prior to entry; a company wouldn’t have received a bond if the company weren’t legitimate
• Requirements are already in effect and CBP is enforcing them

Brokers Supportive of Regulatory Change of Third-Party Transfers of Power of Attorney

Brokers largely support a regulatory change to verification requirements in accepting a power of attorney from a third party, said Anita Harris, chief of the broker compliance branch at CBP. Regulatory changes to 19 CFR Part 111.36 would "give them more teeth," when asking for information from an importer. CBP has voiced concern over situations where power of attorney is transferred from the importer of record to a third party (for example, a freight forwarder), who then transfers that power of attorney to a broker.

CBP is also considering allowing its trusted trader programs (C-TPAT, ISA) to satisfy bona fides requirements for brokers, said Harris. That would mean having trusted trader status would streamline the verification process, she said. The agency is also overhauling CBP Form 5106 to improve information gathered on importers. Ryan said there will be much discussion before the changes are in place, including at least two chances to comment, to CBP and to the Office of Management and Budget. Ryan said brokers won't be required to get financial information from a company and a new Form 5106 won't be retroactive.

The agency still hopes to allow for broker pre-certification for C-TPAT, though there's been a "stumbling block" in getting the new regulations out, said Ryan.

Concern with Express Consignment and Self-filers

Harris said brokers consistently said they worried that express consignment and self-filers are subject to different requirements than licensed customs brokers. The issue will be "captured in another part of the regulatory review," said Harris. Ryan noted that only 1-2% of entries are self-filed.

RLF with Single Transaction Bonds

CBP decided not to move forward with a pilot program that would allow for more virtual broker filing, largely due to broker objections, which asked why the agency would take on a new program when it could simply expand its remote location filing (RLF) program. CBP previously said it was considering a pilot program that would waive the requirement to maintain a place of business within the district where customs business is being conducted. Currently RLF doesn't allow for single transaction bonds (STBs), but the agency is looking at changing that, said Ryan.

Continuing Education Controversial

A continuing education requirement continues to be a contentious issue, said Ryan. While brokers seem to agree more knowledge is better, there's concern about the cost and time commitments involved, she said. Both the broker community and CBP are looking beyond traditional classroom coursework (online, meetings, conferences), she said.

(See ITT's Online Archives 12091233 for summary of CBP's decision not to move forward with the broker permitting pilot.)

Email documents@brokerpower.com for a copy of the CBP's presentation.