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National Customs Broker Permit Recommended by COAC Members

Thursday, June 12, 2014
Sandler, Travis & Rosenberg Trade Report

Changes that could significantly impact customs brokers were among the topics of discussion at a recent meeting of the Advisory Committee on Commercial Operations of U.S. Customs and Border Protection (COAC) in Miami. CBP and trade community representatives reviewed work on developing a standard way for importers to establish their identity to brokers, and the committee adopted a recommendation that CBP transition from a district to a national permitting process for brokers.

Bona Fides. COAC’s Trade Modernization Subcommittee has continued to discuss in recent months what bona fides importers should be required to present to brokers, focusing on what documentation is of significant value to this purpose and is readily available to importers and can be provided to brokers. Subcommittee members have also considered what other information sources within the importation process might enable CBP to obtain and retain additional information about importers to establish identity and authenticity. For example, members believe that additional data collected through a revised Importer ID Input Record (form 5106) that CBP is working on could be used to give the agency a better idea of who importers are and what they do and thus address risks associated with traditional challenges related to antidumping and countervailing duties, intellectual property rights and other issues, which in turn could improve admissibility determinations and throughput.

At its May 22 meeting, COAC adopted several recommendations from the subcommittee on this topic. The committee urged CBP to issue a proposed rule outlining changes to form 5106 by the end of September, to consider limiting additional information requirements for companies in good standing with an existing form 5106 on file, and to allow importers of record and customs brokers to file form 5106 in the Automated Commercial Environment. Members also supported the inclusion of functionality with ACE to help prevent corporate identity theft.

No changes are being recommended at this time to the regulations regarding the collection of a valid power of attorney. COAC recognizes that regardless of any procedure or process that a customs broker may employ to obtain a valid power of attorney, the responsibility is on the importer, person or entity issuing the power of attorney to ensure that the data supplied to the broker, and the identity of the parties involved, is accurate.

Broker Permitting and Management. COAC also adopted May 22 a recommendation that CBP enable brokers to operate through a single national permit and eliminate the current district permitting requirement. COAC believes this change would modernize the permitting framework to reflect the challenges and opportunities associated with ACE, remote location filing, CBP’s Centers of Excellence and Expertise, and electronic bonds. COAC said this national permit framework should include requirements that customs brokerage firms employ an adequate number of licensed brokers to ensure responsible supervision and control over their customs business. However, COAC wants CBP to first develop and implement a modern, national broker management process capable of supporting a national permit and to engage all stakeholders in that effort, including by reviewing the existing broker management process, related informed compliance publications and broker handbooks.

In addition, a COAC working group is considering the value of a Broker Management Center modelled after the CEEs. Such a center would allow existing broker management teams to retain their oversight of local brokers, the working group has said, and help ensure fair and equitable communication and treatment of all brokers, irrespective of their size.

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