After years of feedback and collaboration with brokers and the trade community, U.S. Customs and Border Protection (CBP) has published two Final Rule changes to the customer broker regulations in 19 CFR 111 that will impact the customs broker industry. These are “Modernization of the Customs Broker Regulations” (87 FR 63267) and “Elimination of Customs Broker District Permit Fee” (87 FR 63262).
Both Final Rules will come into effect on Dec. 19, 2022.
Key changes in the Final Rules include:
- Transitioning to a national permit framework
- Increasing license application fees and expanding forms of payment
- Revising regulations regarding the broker/client relationship
- Updating the responsible supervision and control oversight framework
- Strengthening cyber security and records requirements
- Modernizing broker reporting and Automated Commercial Environment (ACE) capabilities through the broker account portal
- Changing broker exam and licensing processes
Permits – Transitioning from District to National
Broker districts and district permits are eliminated in favor of a new national framework.
All customs brokers currently operating with only a district permit will be automatically transitioned to a national permit before the Final Rule effective date.
The national permit eliminates permit waivers.
Licensed customs brokers who already hold a national permit will not be affected.
Fees and electronic payment
The license application fee is increased from $200 per application to $300 for individual license applications and $500 for organization license applications.
Certain fees can be submitted electronically through the eCBP portal if a CBP EDI system exists (currently this includes the broker exam fee and application as well as the triennial fee and report).
Broker/Client Relationship
Brokers must execute a customs power of attorney directly with the importer of record or drawback claimant, and not via a freight forwarder or other (unlicensed) third party, to transact customs business for that importer of record or drawback claimant
Brokers must advise the client on the proper corrective actions required in case of noncompliance, an error or an omission on the client’s part, and retain a record of their communication with the client.
Other updates include changes to the responsible supervision and control requirements whereby a brokerage business must employ a certain number of licensed brokers and provide a responsible supervision plan based on various factors, as well as being in compliance with cybersecurity and confidentiality protocols.
Broker Reporting and the Electronic Data Interface (ACE)
The ACE Secure Data Portal will be updated to allow brokers to transmit the following information via the ACE portal account:
- Information on new and terminated employees
- Office of record and recordkeeping address information
- Recordkeeping point of contact information
- Knowledgeable 24/7 point of contact information
Additionally, it will no longer be required to report an employee’s prior employer(s) and prior home address(s).
Broker Exams and License Changes
CBP may now provide exam results to examinees, accept exam appeals, and issue appeal decisions electronically. CBP may also provide alternatives to on-site testing, such as remote proctor testing.
An applicant who has been denied a license must address how deficiencies which resulted in the denial have been remedied when submitting a new application
How will the transition work?
From now until the effective date (Dec. 19, 2022), current district permits will remain active until the effective date of the Final Rules.
CBP will use a broker’s current district permit information to create the national permit.
Each broker transitioned will be notified when their pending national permit has been created and given an opportunity to provide CBP with amended address and permit qualifier information.
(Again, brokers that already have an active national permit are not affected by the 60-day transition activity.)
Read the full background on Customs Broker Modernization Regulations Changes here.
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