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Broker Self-Assessment Pilot Formally Terminated; No Similar Future Efforts Expected

Friday, December 02, 2011
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection has issued a general notice that, effective Dec. 2, formally terminates the Broker Self-Assessment pilot program. CBP has no plans to proceed with another Importer Self-Assessment type model for customs brokers and instead will work with the National Customs Brokers and Forwarders Association of America on other ways to collaborate pertaining to trade modernization efforts.

The BSA pilot was a voluntary partnership designed to facilitate a higher level of customs broker compliance with customs laws and regulations so that CBP could focus on higher-risk trade enforcement issues. Similar to the existing ISA program, the BSA pilot was based on the premise that brokers with strong internal controls would achieve the highest level of compliance. Participating customs brokers could voluntarily submit to CBP internal control procedures designed to ensure their compliance with broker requirements, and in return CBP provided them with recognition and support in the form of consultations and general assistance.

CBP’s assessment of the pilot results showed that the participants successfully demonstrated their supervision and control over customs transactions and documented their internal controls over their customs operations. All participants agreed that the pilot helped them identify some areas of risk that they had not previously considered, and most concluded that the development of internal control procedures revealed ways to better manage and mitigate risk factors.

On the other hand, a number of shortcomings were identified. The procedures for internal controls were not always written, and in some cases the procedures were modified or improved but not yet implemented. The broker’s assessment of risk factors differed from the risk factors CBP identified as potentially significant, and the compliance measurement rate (which primarily measures compliance in areas such as classification, valuation, free trade agreements, and antidumping and countervailing duty) did not necessarily correlate with demonstrated compliance on the part of the broker. Finally, because business profiles and process management within the brokerage community are highly diverse, it would be difficult to provide for a standard template that CBP could use to establish a uniform methodology for compliance verification.

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