Licensed Customs Broker

International Trade Today is providing readers with some of the top stories for Oct. 26-30 in case they were missed.

The Bureau of Industry and Security is still striving to create a single export licensing agency with harmonized applications and terms in the coming years, but that effort won’t happen during the Obama administration, said Assistant Secretary of Commerce for Export Administration Kevin Wolf, at the 2015 BIS Update conference on Nov. 2. BIS officials have repeatedly touted the merits of that harmonization (see 1507220021), claiming existing differences between the International Traffic in Arms Regulations and the Export Administration Regulations create an arbitrary burden on traders.

With major changes ahead for CBP’s national permitting scheme, licensed customs brokers are increasingly concerned with the prospects for the profession, said several brokers in interviews. The expansion of remote location filing on national permits to all entry types and government agencies, set to occur by the end of 2016 alongside full implementation of the Automated Commercial Environment, could allow brokerages to employ a single licensed individual to qualify all of their customs business. Brokers have been active in voicing concerns that such an outcome could undermine compliance and make customs brokering a less attractive profession, but have yet to find a solution acceptable to CBP.

The Federal Maritime Commission on Oct. 21 voted to move forward with a final rule amending new ocean transportation intermediary (OTI) licensing and financial responsibility requirements, it said in a press release (here). Under the new regulations, OTIs will be required to renew their licenses every three years through an on-line portal beginning in late 2016. The final rule also provides for an expedited hearing process for license denials, revocations, or suspensions. The rule is based on a proposal issued by the FMC in 2014 (see 14100916) that drew criticism from the National Customs Brokers & Forwarders Association of America (see 1412120016). Also in its Oct. 21 meeting, the FMC voted to seek comments on possible modifications to its rules on service contracts and non-vessel operating common carrier (NVOCC) service arrangements, it said.

PALM SPRINGS, Calif. -- CBP is planning a number of major changes to its approach to broker management, moving such work away from individual ports and to the Centers of Excellence and Expertise, said Richard Wortman, a lawyer with Grunfeld Desiderio who spoke at the Western Cargo Conference Oct. 17. Headquarters will continue to have overall control, but the legwork will be handled at the CEEs across the country, he said. Wortman discussed broker management changes and a number of other expected updates being contemplated as part of revisions to customs broker regulations.

International Trade Today is providing readers with some of the top stories for Oct. 5-9 in case they were missed.

The National Customs Brokers & Forwarders Association of America is now considering alternative ways CBP can support the continued presence of a sufficient number of licensed brokers in customs business, with the agency so far unreceptive to the NCBFAA’s broker employment ratio proposal, said Alan Klestadt of Grunfeld Desiderio in an interview on Oct. 9. Among the options under consideration is a possible policy statement from CBP that the agency would consider the number of licensed brokers employed when making decisions on penalty mitigation, said Klestadt, who is the NCBFAA's customs counsel.

Despite some recent hang-ups for CBP's plans to update regulations governing customs brokers, Troy Riley, executive director of CBP's Office of Commercial Targeting and Enforcement, is hopeful that the agency will put out an official request for comments on proposed changes by the end of 2015, he said in an Oct. 2 interview. The inclusion of a required ratio of licensed customs broker employees remains uncertain, but is unlikely to continue to hold up the proposal, said Riley. The National Customs Brokers & Forwarders Association of America previously asked CBP to add a requirement that national permit holders should employ at least one licensed customs broker for every 12 employees (see 14072222).

CBP is “aware” of the recent Court of International Trade decision levying $2 million in penalties on a Texas woman who was paid $200 by a customs broker for her signature on a power of attorney (see 1509280063), but cannot confirm or deny whether it is taking action against the customs broker, said an agency spokeswoman. Though CBP knows of the “involvement of a licensed customs broker in these serious violations,” which include undervaluation and failure to redeliver, the agency “is not allowed by regulation to comment on any potential administrative actions until such actions are completed,” she said. “CBP values the important role of the licensed customs brokers and takes any actual or reported illicit activity of those companies or individuals very seriously,” said the agency spokeswoman.

The Court of International Trade on Sept. 28 ordered a Texas woman to pay over $2 million for her part in a get-rich-quick scheme proposed by a customs broker (here). Dionicio Bustamante, a licensed broker, approached Jeanette Pacheco at a “nightclub” and offered her $200 for her signature on a power of attorney, according to the CIT ruling. He proceeded to import undervalued dried peppers on her behalf. But when CBP caught onto the scheme, Pacheco found herself on the hook as the importer for penalties under 19 USC 1592 for undervaluation and failure to redeliver.