Wednesday, June 15, 2022

Modernization of the Customs Broker Regulations (19 CFR 111) Proposed Changes

On June 8, 2022, U.S. Customs and Border Protection announced the publication of the Notices of Proposed Rulemaking (NPRMs) for the long-awaited update to 19 CFR 111. The NPRM for the Modernization of the Customs Broker Regulations (85 FR 34836) and the NPRM for the Elimination of the Customs Broker District Permit Fee (85 FR 34549) were published on June 5, 2020. The comment period for both NPRMs ended on August 4, 2020.

Modernization of the Customs Broker Regulations (19 CFR 111) Proposed Changes 

Some of the proposed changes are listed below: 

 Establish one national permit for each broker

  • Eliminate the district permit and transition to a single permit framework (national permit) that operates at the national level within the customs territory of the United States
  • Eliminate the need for brokers to request permit waivers and maintain district offices

 Broker Fee Changes and Electronic Payment

  • Increase the license application fee for individual and organization license applications to better align application fees to CBP's processing expenses
  • Expand payment options for brokers to include electronic fee payment

 Broker Reporting and Electronic Data Interface (ACE)

  • Enhance the ACE broker portal and streamline broker reporting

 Customs Business within the U.S. Customs Territory and Knowledgeable Point of Contact

  • Require that customs business be conducted within the customs territory of the United States
  • Require that brokers designate a knowledgeable point of contact to be available to CBP during and outside of normal operating hours to respond to customs business issues

 Broker/Client Relationship

  • Require brokers to obtain a customs power of attorney directly from the importer of record/drawback claimant, not via a freight forwarder
  • Report to CBP when brokers terminate representation of a client as a result of determining that the client is attempting to defraud or otherwise commit any criminal act against the U.S. Government
  • Require brokers to advise the client on the proper corrective actions required and retain a record of broker communication with the client in cases of noncompliance, error or omission

 Responsible Supervision and Control  Requirements

  • Require brokers to submit a supervision plan with a national permit application to detail how the entity intends to exercise Responsible Supervision and Control
  • Update and add factors related to Responsible Supervision and Control to reflect the transition to a national permit framework
  • Require brokers to employ a sufficient number of licensed brokers to ensure Responsible Supervision and Control over their customs business

 Cyber Security and Records Requirements

  • Require brokers to maintain records, including electronic records, within U.S. customs territory
  • Require brokers to notify CBP when there has been a breach of electronic or physical broker records and provide the compromised importer of record numbers

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