Streamlining broker licensing
A new process to expedite the issuance of licenses for customs brokers is scheduled for limited testing in May, according to U.S. Customs and Border Protection.
Shortly after taking office last spring, Commissioner Alan Bersin promised to reduce the time required to issue a broker license, tapping $1 million from his personal reserve account to fund work necessary to implement the changes.
Under the existing paper-intensive process it can take up to one year or more from the time an applicant passes a broker exam until he or she receives a license. CBP plans to use its Global Enrollment Centers, which handle fingerprinting and interviews of participants in trusted traveler programs, to manage the application process and verify new brokers.
CBP has completed the first phase of its licensing project, which involved making program modifications to the Global Enrollment System to streamline the licensing of bonded facilities and operators, according to an official update provided by the Office of International Trade.
The new process for licensing brokerage companies was successfully tested in November.
CBP is in the second phase of the licensing project, which is designed to speed up processing of broker applications.
The agency is scheduled to begin alpha and beta system testing for the broker application functionality in April, along with training of field officers prior to implementation of the pilot in May. Customs will roll out the new licensing system to regions of the country in stages once the trial program has been successfully completed.
Officials are also preparing a proposal to revise existing regulations to accommodate the changes associated with the restructured licensing process, the statement said.
CBP's goal is to issue broker licenses within 90 days of receiving an application, but then-Assistant Commissioner of Trade Daniel Baldwin expressed interest last year in eventually shortening that time to 45 to 60 days.
The re-engineered CBP licensing process will initially be available at the nation's 20 major international gateway airport cities, including Honolulu and San Juan, Puerto Rico.
The improvement was made possible by an agreement between CBP and Immigration and Customs Enforcement to streamline how background investigations are conducted.
Delays are common because the investigations have a low priority with ICE and are compounded by the use of paper fingerprint cards that are forwarded to the FBI for criminal history checks.
The vetting function will now be the responsibility of CBP, and most checks will simply involve an interview of the subject rather than contacting neighbors, friends and colleagues for reference checks as is typically done for government security clearances.
The money from Bersin's reserve account is being used to automate major portions of the vetting and fingerprinting process that will allow these functions to be performed by CBP staff and speed issuance of the license. ' Eric Kulisch
Broker Self-Assessment pilot ends
A project to test whether to create a voluntary program for approved customs brokers to self-monitor and report compliance with trade regulations has been terminated, U.S. Customs and Border Protection said in a report in early March.
Four companies, including A.N. Deringer, OHL and Expeditors International, participated in the one-year Broker Self-Assessment demonstration program.
BSA was modeled on the eight-year-old Importer Self-Assessment program. It was designed to promote high compliance levels with Customs laws and regulations by letting trusted brokers self-report compliance violations so that CBP specialists can devote limited resources to focus on higher-risk companies and enforcement issues.
About 200 companies with strong internal controls have joined the ISA program in exchange for exemptions from periodic agency audits and cargo inspections for trade violations. Participation is low because many trade professionals don't believe the benefits outweigh the significant cost associated with meeting ISA standards.
Under the BSA program, CBP reviewed whether the brokers are able to update and improve internal controls, perform periodic testing of those controls and disclose to CBP deficiencies discovered through the testing.
A key responsibility for the brokers is to maintain an audit trail linking financial records to entries filed with CBP. The government expects brokers to have strong internal controls to comply with federal regulations and act in their capacity as a fiduciary agent for importers.
A permanent program would have enabled participating brokers to undergo fewer time-consuming audits.
The report by CBP's Office of International Trade said the pilot was not expanded because it could not 'directly correlate' a broker's internal controls for processing customs paperwork with a reduced risk for violations of trade laws on inbound shipments. Brokers have stated they are simply intermediaries and should not be held liable for mistakes made by the importer of record.
One of the challenges presented by the pilot program was a difference in interpretation between the agency and participating brokers on what constituted effective internal controls. Brokers identified areas of risk in their operations that they had not previously considered, the report said.
'The pilot confirmed that there exists a profound limitation in the assurance that import transactions would be compliant based solely upon the broker's internal controls. The broker's submission is only as reliable and accurate as the information it is provided. The burden still rests on the importer to file accurate and correct information with CBP,' the report said.
The National Customs Brokers and Forwarders Association of America pushed for BSA, hoping it would lead to benefits such as more uniform enforcement of the broker industry, limited liability for self-disclosure of problems, expedited processing of ruling requests, and collaboration on corrective actions instead of sanctions for violations.
CBP said it has agreed to work with the NCBFAA to find other ways to modernize trade compliance functions. ' Eric Kulisch