The Customs Broker Modernization Regulations 19 CFR 111 have revolutionized customs broker regulation. These rules develop guidelines for customs brokers and create a more efficient customs process. In addition, the regulations provide additional assistance to customs brokers, including access to resources and support services. By requiring customs brokers to meet certain standards during customs activities, the customs broker modernization regulations make sure that customs transactions are safe and secure. The updated regulations help streamline the customs process, creating a smoother transition for individuals and businesses moving goods in or out of the country. Therefore, these regulations represent a major step forward in customs broker operations.
New Term and Definition of “Processing Center”
The CBP is introducing a new term, “processing center,” which will replace the current term, “centralized examination station.” A processing center is defined as a location where CBP officers conduct examinations of imported goods, issue detention notices, and take samples. The rule also establishes that only one license will be required for customs brokers who wish to operate at multiple processing centers.
Transitioning to a National Permit Framework
The CBP is transitioning from the current system of issuing local permits to a national permit framework. Under the new framework, customs brokers will be required to maintain a valid national permit in order to engage in customs business within the United States.
The CBP will issue three types of national permits:
- Type 1 permit – authorizes the holder to engage in customs business at any port within the United States;
- Type 2 permit – authorizes the holder to engage in customs business at any port within a specific geographic area; and
- Type 3 permit – authorizes the holder to engage in customs business at a specific port or ports.
Customs brokers will be required to renew their national permits every three years.
Broker Fee Changes and Electronic Payment
The rule makes changes to the broker fee structure by eliminating the flat fee for entry summary filings and increasing the per-entry fee from $25 to $50. In addition, the rule requires brokers to submit their fees electronically via the Automated Clearing House (ACH) system.
Customs Business within the U.S. Customs Territory and Knowledgeable Point of Contact
The rule requires all entities engaged in customs business within the United States to have a knowledgeable point of contact available during normal business hours who can answer questions about compliance with U.S. customs laws and regulations. The knowledgeable point of contact must be located within the United States or its territories, and must be authorized to bind the entity with respect to compliance with U.S. customs laws and regulations.
Responsible Supervision and Control Requirements
19 CFR 111 refers to the Customs and Border Protection (CBP) regulations governing the modernization of brokers’ supervision and control requirements. These regulations are designed to enhance security and efficiency in the customs broker industry by requiring brokers to implement certain controls and procedures to ensure compliance with CBP regulations. Some of the key responsible supervision and control requirements for brokers under 19 CFR 111 include:
Broker Permit: A customs broker must hold a valid permit issued by CBP to conduct customs business on behalf of others. The permit is renewed every three years, and CBP can revoke or suspend it for noncompliance with regulations.
Broker Records: A customs broker must maintain accurate and complete records of all transactions, including entry documents, bills of lading, and other relevant documents. These records must be kept for at least five years and be readily available for CBP inspection.
Customs Bonds: Customs brokers must provide CBP with a bond that guarantees payment of any duties, taxes, or penalties that may be assessed by CBP for any violations or errors committed by the broker.
Employee Training and Supervision: Brokers must train and supervise their employees to ensure compliance with CBP regulations. This includes providing ongoing training and monitoring employee performance.
Power of Attorney: Customs brokers are obligated to establish a customs power of attorney directly with the importer of record, rather than utilizing a third party like a freight forwarder. The main objective of this is to allow direct communication between importers and brokers, as well as to address issues related to identity theft, supply chain security, and fee transparency. However, this rule does not prohibit the transfer of a power of attorney from one broker to another, provided that the Importer of Record has consented to it in the original power of attorney. Importers are strongly advised to review their current powers of attorney to ensure that they are executed directly with customs brokers and not through a third party.
Compliance with CBP Regulations: Brokers must ensure compliance with all applicable CBP regulations, including those related to the importation and exportation of goods, the payment of duties and taxes, and the accuracy of information provided to CBP.
Business Ethics: Brokers must conduct their business in an ethical and professional manner, avoiding conflicts of interest and ensuring that they do not engage in any activities that could harm their clients or the integrity of the customs process.
Overall, these responsible supervision and control requirements are designed to ensure that customs brokers maintain the highest standards of professionalism and compliance with CBP regulations, which helps to ensure the smooth and secure flow of goods across international borders.
Conclusion: Abady Law Firm P.C. strives to facilitate an effective and productive relationship between Customs Brokers and their clients. We are knowledgeable on the Customs Broker Modernization Regulations (19 CFR 111) and are experts in customs law. As such, we can provide insight into client needs so that relationships move smoothly, eliminating frustrating delays for both parties along the way. Abady Law Firm P.C. is prepared to consult with brokers on a variety of issues in order to secure the best outcome for their clients, as well as ensure regulatory compliance with 19 CFR 111.
