CBP Hoping to Propose Part 111 Changes by End of Year
SAN DIEGO -- CBP is aiming to propose changes to the customs broker regulations by the end of 2016, said Cindy Allen, vice president-regulatory affairs and compliance for FedEx Trade Networks, while speaking at the Western Cargo Conference on Oct. 15. "I expect to see something by the end of the year or very soon after," she said. Allen, who is also on the Customs Commercial Operations Advisory Committee (COAC), discussed the recommendations submitted to CBP through the COAC (see 1604250011). Some of the recommendations elicited concerns among attendees.
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CBP would eventually like to have an outline from all customs brokerage firms about how each plans to ensure responsible supervision and control, Allen said. The COAC recommendations only mentioned submission of the plans "when you apply for a license or a permit for the first time," but "my understanding is that customs will want every one of us to have one of these," she said. For such regulations to be workable, the agency will need to give written guidance on what it considers to be "best practices," which could also feature an "optimal ratio" of licensed brokers to employees, Allen said. CBP is hesitant to create such a ratio requirement within the regulations (see 1510230074).
It's unlikely that "CBP will ever mandate you hire a broker" based on the responsible supervision and control plans, Allen said. "What I do expect is that you will be audited more frequently and that they will look at your business much more closely" to examine risk factors, she said. It remains unclear exactly how CBP would collect such plans, but it's unlikely to be required as part of the triennial reports, she said. The agency is also unlikely to dictate exactly what a supervision and control plan should look like, because effective oversight can differ business to business, she said. The contents of the CBP proposal could change between now and publication in the Federal Register.
Some of the recommendations mentioned appeared to be controversial. "What you suggest is impossible," one attendee said. The recommended regulatory changes "would diminish the value of a licensed broker in any office," he said. The attendee's critical remarks were met with applause from audience members, while Allen said she disagreed with the characterization. The coming changes are likely to represent an inflection point for customs brokers, said Richard Wortman, a lawyer with Grunfeld Desiderio. "You really need to have your own plan on what you want your business to look like several years from now," Wortman said.