CUSTOMS ISSUES NEW RULES FOR CUSTOMS BROKERS

CUSTOMS ISSUES NEW RULES FOR CUSTOMS BROKERS    U.S. Customs has finally issued its new rules for how customs brokers must conduct their business, after nearly a decade of debate and negotiation with the industry.
   The rules, known as Part 111 of the Customs regulations, more narrowly define what is “customs business,” a line that has become increasingly blurred in recent years by other types of firms providing services to importers, such as consultants, accountants and law firms.
   The National Customs Brokers and Forwarders Association of America was the primary broker group to negotiate the revisions with Customs. The changes to broker regulations were required in the North American Free Trade Agreement Implementation Act and to fit the reorganization of Customs.
   The biggest change is the ability for brokers to apply for national permits, which allow them to conduct business where they do not have district permits.
   National permits also allow brokers to put employees in the offices of importers, known as “implant” operations. Broker employees will be able to process import documents on site, but they still must forward them back to the licensed broker’s office for final import entry with Customs.
   With National permits, brokers may also file electronic drawback claims from where they may not hold district permits. Customs has set up eight drawback offices around the country for brokers with national permits to file their drawback claims.
   In addition, a national permit allows one broker to file an entry and another to perform post-entry summary work. “This provision will give importers greater choice in selecting a broker to handle a particular aspect of an import transaction,” Customs said.
   The national permit also makes it easier for brokers to participate in the agency’s National Customs Automation Program (NCAP), a prototype of its future Automated Commercial Environment.
   To acquire a national permit, a broker must have at least one district permit. It must also file an application to Customs’ Washington headquarters, listing the license number and issuance data, the office and name that will oversee the national permit operations, and evidence that the $100 permit and $125 annual permit user fees have been paid.
   Under the revised Part 111, brokers no longer need approval for how they store their import records. This accommodates new computer-based storage capabilities. Brokers must only notify Customs where their records are kept.
   The new rules give prospective brokers greater flexibility for when and where they take the test and apply for a license. Customs also used the revision process to clean up and delete outdated language in its regulations.
   Customs warns that penalties for acting in the capacity of a broker without a license can lead to severe penalties. The agency will issue a $10,000 fine for each incident, up to $30,000.
   The agency said the revised Part 111 will be published in the Federal Register Wednesday. The rules take effect April 14.