Licensed Customs Broker

International Trade Today is providing readers with some of the top stories for Oct. 7-11 in case they were missed.

Ten days into the federal government shutdown, many importers and exporters are feeling some impact from agency furloughs. Negative effects are generally confined to regulatory actions that don’t directly affect routine customs clearance, industry officials said, like Food and Drug Administration sampling and Department of Agriculture cheese import licenses. Some products are presenting more problems than others. Importation of pesticides has been impossible since the shutdown began and the Environmental Protection Agency largely went offline, officials from that industry said. Steel imports faced a similar problem initially due to furloughs at the Commerce Department, but the product is now coming in after a partial resolution was offered by the agency, one shipper told us.

The Federal Motor Carrier Safety Administration interpretation of the word "transaction" will largely determine to what extent customs brokers would be exempt from financial and licensing requirements of the Moving Ahead for Progress in the 21st Century Act (MAP-21), said Avalon Risk Management in a video outlining the exemptions to the law. The National Customs Brokers and Forwarders Association of America previously interpreted the bill's language to mean most work done by customs brokers is exempt from the new bonding requirements of MAP-21 (see 12070325), though the regulatory treatment of customs brokers seems to be an open question.

A customs broker is embroiled in a whistleblower suit against cellphone case seller OtterBox, alleging the company knowingly failed to include assists in the transaction value of merchandise it imported from China over a five-year period. Former OtterBox employee and licensed customs broker Bonnie Jimenez filed the False Claims Act suit at the Colorado U.S. District Court in 2011, but it wasn’t made public until about one month ago. She says she repeatedly told management that OtterBox was undervaluing cellphone cases that it imported from China, but that management deliberately ignored her pleas. OtterBox moved to dismiss the case on Sept. 25, saying that a prior disclosure of the violations filed with CBP before the Jimenez lawsuit protected it from a whistleblower case.

Those involved in international trade were reporting relatively few impacts of the government shutdown, in its second day, but expressing concerns about the longer term. Most industry officials told us traffic continues moving through ports and airports.

CBP made available a full report on the Aug. 7 meeting of the CBP Advisory Committee on Commercial Operations (COAC). Among the subcommittee recommendations at the meeting were:

The trade industry was still assessing the short- and long-term effects of the government shutdown Oct. 1. CBP had already said its core functions would not be immediately affected (see 13093028). And the U.S. National Airspace System was operating normally Oct. 1, with no reports of any impact to operations due to the government shutdown, said The International Air Cargo Association.

Customs brokers and international trade lawyers expect increased activity in export controls and sanctions compliance in coming years due to administrative enforcement and a more globalized economy, an International Trade Today survey of eight trade law practices found. Most firms surveyed said customs litigation and regulatory work, as well as revenue, remained steady over the past year, even though many did add clients in the areas of export controls and sanctions compliance programs. Participants said the additions are attributed to the Administration’s recent emphasis on U.S. export controls and changes in the global economy.

Despite what seemed to be a statutory exemption in Moving Ahead for Progress in the 21st Century Act (MAP-21) for those involved in "customs business," there remains some uncertainty on how the Federal Motor Carrier Safety Administration will look at customs brokers as the agency implements the law, said John Drake, FMCSA director of Government Affairs. "I think it's not entirely clear to us what the appropriate reading of this statute is," he said at the National Customs Brokers and Forwarders Association of America (NCBFAA) government affairs conference Sept. 23. The NCBFAA has interpreted the bill's language to mean most work done by customs brokers is exempt from the new bonding requirements of MAP-21 (see 12070325).

CBP provided a broad update on its ongoing work toward revising CBP regulations in 19 CFR Part 111 that govern licensed customs broker during the National Customs Brokers and Forwarders Association of America's Government Affairs Conference Sept. 22. Heather Sykes, the new chief of CBP's Broker Management Branch, outlined areas the agency is considering making updates to.