U.S. Customs and Border Protection has issued a final rule updating the custom broker regulations in 19 CFR 111 to professionalize the broker industry, formalize current practices, and reflect technological advancements. Major changes include switching from a district permit system to a national permit system, updating the responsible supervision and control oversight framework, requiring brokers to have direct communication with importers, increasing the broker license application fee, and a new online system for processing broker submissions and electronic payments.

These rules will take effect Dec. 19. For more information, please contact attorney Lenny Feldman via email or at (305) 894-1011.


Broker districts and district permits (and related fees, via a separate rule) will be eliminated and all brokers will be automatically transitioned to national permits allowing them to conduct any type of customs business throughout the U.S. customs territory. This transition will occur before Dec. 19.

Brokers will no longer be required to maintain district offices and may establish an office anywhere within the U.S. customs territory. However, they will have to designate an office of record as the primary location that oversees the administration of all activities conducted under a national permit.


The broker license application fee will be increased from the current $200 to $300 for individuals and $500 for business entities. Other changes include (1) requiring license applications to be submitted to the processing Center of Excellence and Expertise after the applicant has passed the license examination rather than the port where the broker intends to do business, (2) eliminating the requirement for applications to be submitted under oath, (3) expanding the scope of the background investigation to include any association with any individuals or groups that may present a risk to national security or revenue collection, and (4) expanding the grounds sufficient to justify denial of a license to include failure to establish financial responsibility, the omission of pertinent facts in the application or interview, and detrimental commercial transactions.

Duties and Responsibilities

Brokers will be required to have direct communication with importers when securing a power of attorney on their behalf. Brokers will have to notify CBP within 72 hours of the discovery of any known breach of electronic or physical records relating to their customs business, along with a list of all compromised importer identification numbers. The rule clarifies that the restriction on brokers disclosing client information to third persons does not apply to information properly in the public domain.

Responsible Supervision and Control

Number of brokers. The rule adds a provision stating that a sole proprietorship, partnership, association, or corporation must employ a sufficient number of licensed brokers relative to the job complexity, similarity of subordinate tasks, physical proximity of subordinates, and abilities and skills of employees and managers.

Factors evaluated. The list of factors CBP considers when determining whether a broker is exercising responsible supervision and control is amended to (1) place the obligation to provide employee training on the broker, (2) allow brokers to provide electronic (not just written) instructions and guidelines to employees, (3) provide that CBP will consider the broker’s reject rate relative to the overall volume of transactions it conducts, (4) clarify that ensuring access to current editions of relevant laws and regulations is more important than simply maintaining them, and (5) require licensed brokers to be readily available to employees.

CBP is also adding five new factors that may be considered: (1) timeliness of processing entries and payment of duty, tax, or other debt or obligation owing to the government for which the broker is responsible or has received payment from a client, (2) communications between CBP and the broker, (3) the broker’s responsiveness and action to communications, direction, and notices from CBP, (4) communications between the broker and its officer(s) or member(s), and (5) the broker’s responsiveness and action to communications and direction from its officer(s) or member(s).

Importer error. The rule newly places an affirmative duty on brokers to document and report to CBP when they separate from or cancel their representation of a client they determine to be intentionally attempting to use the broker to defraud or otherwise commit any criminal act against the U.S. government.

When they know that a client has not complied with the law or has made an error in or omission from any required document, affidavit, or other paper, brokers must currently advise the client promptly of that problem. This rule adds requirements for brokers to (1) advise clients of the proper corrective actions and (2) retain records of such communications, which could be reviewed by CBP on a routine visit to the broker.

Freight forwarders. Drawback claimants will be added to the list of persons that a freight forwarder cannot forbid or prevent direct communications with by a broker in a compensation agreement. Brokers will not be allowed to rely on a customs power of attorney granted by a forwarder but will have to obtain one directly from the importer of record or drawback claimant.

Disciplinary Actions

The rule gives CBP discretion in pursuing civil or administrative investigation of disciplinary complaints against a broker rather than requiring such action.

eCBP Portal

CBP is also announcing the deployment of the eCBP portal, which is already being used for the submission and payment of broker exam applications and triennial status reports and will be expanded at some future point to include functionality such as the electronic submission of and payment for broker license and permit applications and the payment of annual permit fees.

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