Difficult Questions Loom for CBP and Brokers in Second Look at Mandatory Continuing Education

Talk of continuing education has been ongoing at least since CBP first announced an initiative to rewrite the Part 111 broker regulations in 2011 (see 11041523). In the end, after seriously considering a framework that would require 40 hours of continuing education every three years (see 13041104), continuing education was ultimately dropped from the rewrite around 2015, amid concerns from CBP lawyers (see 1504220017 and 1504200053).

Looming large among those concerns was how to create an equitable scheme for approving education providers and courses, several lawyers familiar with the issue said. “Working on the details of this has been the barrier, more than anything else,” said Larry Hanson, a customs attorney who also represents the International Compliance Professionals Association. Regulations would have to be put in place to require “that you would take these approved classes. Then the question becomes, who approves what classes; what are the criteria for approving classes; who can teach these classes,” Hanson said.

“There is a lot of disagreement about whether the government only, or the private sector only, or a combination, should provide the education,” Peter Quinter, of Gray Robinson, said.

Regional broker associations, which rely on education programs to raise money, have much at stake in how the accreditation issue is resolved, should mandatory continuing education move forward, Su Kohn Ross, of Mitchell Silberberg, said. “One of the questions is, will that continue to be the case, and at what cost?” These broker groups might have to pay to get their programs certified, or even lose the revenue stream altogether if they can’t do so. “People are concerned about barriers to entry,” Kohn Ross said.

“You have to develop criteria for what are acceptable programs, and who can put them on,” Hanson said. “How do you approve them?” CBP could have a lawsuit on its hands if it says that “only a certain group is allowed to do it,” he said. “A lot of people out of that group would have a case unless there’s a law that says why there’s a reason why they are.”

Asked Kohn Ross: “Which organizations will be those that will be recognized as ‘authorized vendors’ or ‘authorized providers’?” Setting “objective criteria” is “sometimes difficult to do,” she said. They “need to be ecumenical, nondenominational, neutral.”

The National Customs Brokers & Forwarders Association of America’s Certified Customs Specialist (CCS) program has more than 4,000 members, all of whom are subject to the program’s continuing education requirements. But the trade group does not seek to play the role of sole provider of mandatory continuing education to brokers, its leadership says.

“The NCBFAA is not interested in being the only party that either offers or accredits the courses. We are certainly open to sharing this kind of thing with others,” NCBFAA President Amy Magnus said. There “was never going to be one party; that was never the NCBFAA’s intention. We’ll certainly be in the game, but we never were exclusive. There’s too much out there, as well,” Magnus said. “A lot of professions have mandatory education, and they have a variety of means to obtain it, and I think that we could somehow get to that point.”

“I think the whole idea of trying to put together a regulatory package that satisfies the needs of all parties involved may be a worthy exercise” that will give “everyone the opportunity to respond and come forward with their ideas,” Magnus said.

Accreditation will be only one aspect of that regulatory package, and complexity itself is an obstacle to the overall effort moving forward. CBP Executive Assistant Commissioner Brenda Smith recently said in an interview that, last time continuing education was up for discussion, CBP wasn’t ready to get as “specific” as required for the regulations (see 2001290037).

For example, CBP can say “that you as a broker need to have 12 hours of continuing ed,” but “that’s not really enough,” Kohn Ross said. “CBP really has to be able to drill down and say that the 12 hours consists of one hour of classification, two hours of valuation, and hour of drawback, an hour of free trade agreements,” and so forth. “There’s so many topics to pull from, because if the certification is going to have any value, you have to know what is being certified.”

The regulations will also have to provide for enforcement, Hanson said. “If I do not have continuing legal education, I could lose my lawyer’s license. It rarely happens because it’s not hard to get continuing education. But if you don’t do this, you’re going to lose your broker’s license that’s granted by the federal government,” Hanson said. “For the government to take that away, you’d need to have a due process right to challenge that. There’d have to be clear criteria. Are there any exceptions to that?”

“There are all sorts of details to work out there,” Hanson said. “I think the real problem is, hard work and hard decisions have not been done that would enable us to go forward. But it could be done.”

The joint broker education task force announced in September (see 1910160056), largely made up of CBP officials and members of the Commercial Customs Operations Advisory Committee (COAC) and led by CBP’s Elena Ryan, who worked on continuing education the first time around, will have to tackle a number thorny problems wherein brokers may disagree on how the effort should move forward.

One of those is how licensed customs brokers not employed by customs brokerages should be treated. “It’s relatively straightforward to say that an employee of a brokerage has to meet 'X' number of hours of continuing ed. I’m a lawyer; I have to do that every year,” Kohn Ross said. But licensed brokers that work for importers may “have a tougher time” meeting those requirements, potentially because of geography or because they’re focused only on specific issues, she said.

“Do you have a different set of rules if someone works for importers versus if someone works for a broker?” And, Kohn Ross asked, how will the rules apply to lawyers or consultants, “where we have individual licenses but do not function as brokers?”

In a similar vein, there are customs brokers that only work with drawback or foreign-trade zones, Kohn Ross said. “I can make an argument both ways, but if you specialize, should you have to cover all these other things, so that you’re only dealing with issues that you have to deal with as drawback broker?”

The NCBFAA doesn’t advocate any special treatment. “A broker is a broker is a broker,” Magnus said. “No matter where you work, no matter who you work for. If you have a license, from an NCBFAA point of view, there should not be difference. If continuing education is mandatory, “then everyone, no matter who you work for, would have to fulfill requirements to maintain that license. It’s the license that’s important, not who you are working for at the time.”

Another potential issue that could arise in discussions is how larger brokers with in-house training should fit into any mandatory continuing education scheme.

“If you’re a large broker, you have certain requirements for your staff. You may have internal briefings that you do, and you may have internal educational programs you’ve designed around the clients that you have and the needs of these clients,” Kohn Ross said. “If you’re a large broker and you have a lot of individuals on your staff,” an internal program can allow for better quality and cost control. “If CBP now starts to administer this program, what does that do from a cost perspective?”

Magnus said there’s no reason these in-house training programs would be ineligible for any mandatory continuing education credits. “The right kind of training could be allowed to fulfill continuing education,” she said.

Underlying the entire discussion is whether mandatory continuing education for customs brokers is even desirable. Support is not unanimous. Brokers have for a long time been operating without continuing education requirements.

“I do not believe such mandatory continuing education is necessary,” Quinter said. “There are numerous companies that provide educational sessions focused on customs brokers that take place all year at locations all over the United States. Law firms such as mine are actively educating customs brokers. To qualify as a customs broker is already a feat. On-the-job training is the best way to learn. CBP offers educational training at all major ports, and virtually, usually for free,” Quinter said. “It has worked well for over a hundred years.”

On the other hand, a mandatory scheme would help brokers stay ahead of a rapidly changing regulatory environment, and could also weed out bad apples that should not be conducting customs business on behalf of importers.

Mandatory continuing education would ensure “all brokers achieved a certain level of quality,” Hanson said. “The thought is, brokers that are kept abreast of law, changes in the law, will be better brokers, and therefore the public would be better served by that. The voluntary system works just as well if the public sees the certifications -- CES or CCS -- as tantamount to evidence of quality. And I think it is,” he said. “But if you are looking at a very unqualified, very poor broker, who took the exam 20 years ago, you would still be able to hire that broker.”

The NCBFAA is “on record as supporting” mandatory continuing education,” Magnus said. “I think what we’re trying to look at from an NCBFAA point of view is proof of professional competency. And just looking around, other professional groups -- CPAs, Realtors, nurses, bankers -- all of these have mandatory education requirements. I think it would raise the level of all of us to have the same,” she said.

“The work we do today, right now, as a broker, isn’t anywhere near what we did even five years ago,” Magnus said. “It’s just rapidly changing. You think about changes in AD/CVD, and the issues around the trade wars, [Sections] 301 and 232, the exclusions, all of this is all new work.” CBP has new focuses, including “forced labor and more recently intellectual property rights,” Magnus said. “How we manage data, how we collect data -- all of those things are very different from years past, and I think keeping up with these changes is critical.”