CBP’s Proposed Rule
On September 10, 2021, U.S. Customs and Border Protection (“CBP”) published a Notice of Proposed Rulemaking regarding broker continuing education. In the proposed rule, CBP is proposing mandatory continuing education requirements for individual licensed brokers. CBP underscores the benefits of mandatory continuing education for customs brokers in its proposed rule:
“By requiring individual brokers to remain knowledgeable about recent developments in customs and related laws as well as international trade and supply chains, CBP’s proposed framework would enhance professionalism and competency within the customs broker community. CBP has determined that the proposed framework would contribute to increased trade compliance and better protection of the revenue of the United States.”
Specifically, the proposed rule requires:
- At least 36 continuing education credits per triennial period
- Individual brokers reentering the profession following a period of voluntary suspension would be subject to a prorated requirements on continuing education credit or each complete remaining month until the end of the triennial period
- Credits can be earned via a wide variety of training and education activities held in-person or online, including the completion of coursework, seminars, workshops, symposia, or conventions
- Disciplinary actions for failure to complete the required credits
- Methods for accreditation and selecting accreditors
Background on Broker Licensing & Education
Section 641 of the Tariff Act of 1930 provides that individuals and business entities must hold a valid customs broker’s license and permit to transact customs business on behalf of others. The statute also sets forth standards for the issuance of broker licenses and permits; provides for disciplinary action against brokers in the form of suspension or revocation of such licenses and permits; and provides for the assessment of monetary penalties against other persons for conducting customs business without the required broker’s license. Section 641 also authorized the Secretary of the Treasury to prescribe rules and regulations relating to the customs business of brokers as may be necessary to protect importers and the revenue of the United States.
Under 19 U.S.C. 1641(b)(4), a customs broker has the statutory duty to exercise responsible supervision and control over the customs business that he or she conducts. Maintaining current knowledge and competence is an inherent part of the statutory duty of the customs broker. A customs broker reasonably can be expected to uphold such responsible supervision over his or her employees and control over his or her customs business only by acquiring and maintaining the knowledge of customs and related laws.
The U.S. Customs and Border Protection (“CBP”) is responsible for administering licensing for customs brokers. All prospective customs brokers must pass a broker exam prepared by CBP, which is designed to determine the individual’s knowledge of customs and related laws, regulations and procedures, bookkeeping, accounting, and all other appropriate matters necessary to render valuable service to importers and exporters. After passing the customs broker exam, CBP investigates whether an applicant is qualified for a broker’s license, taking into account information provided by the applicant and other aspects pertaining to the applicant such as his or her business integrity. Following the issuance of a license, a broker administratively maintains a license primarily through the payment of fees and the submissions of reports and notifications required by 19 CFR 111.30.
While the broker exam provides a good initial indication of an applicant’s knowledge, it is, by necessity, limited in scope. The broker exam only captures a state of customs and related laws at a certain point in time and a person’s knowledge of such laws at a single point in time. The broker exam also does not test for any of the requirements of the approximately 50 Partner Government Agencies (“PGAs”) involved in regulating imports and exports. The complex nature of trade and the ever-changing and expanding requirements to comply with U.S. and international law require that a customs broker maintain a high level of functional and accessible knowledge to stay efficient and compliant over time.
CBP encourages input from the trade community. Interested persons are invited to participate in this rulemaking by submitting written data, views, or arguments on all aspects of the proposed rule. CBP also invites comments that relate to the economic, environmental, or federalism effects that might result from this proposed rulemaking. Comments that will provide the most assistance to CBP will reference a specific portion of the proposed rulemaking, explain the reason for any recommended change, and include data, information, or authority that support such recommended change.
Specifically, CBP seeks comments on:
- The number of hours of continuing education that customs brokers should be required to complete;
- The customs broker license holders who should be required to complete continuing education (including license holders who should be exempt from the requirement or required to complete fewer hours of continuing education);
- The types of training, coursework, or other educational activities that should qualify for continuing education credit;
- The manner in which qualifying continuing broker education should be provided (online or in-person);
- Whether subject-matter-specific education requirements should be imposed;
- How compliance with the continuing broker education requirement should be reported to CBP;
- What recordkeeping obligations should exist for the purpose of the continuing broker education requirement;
- What disciplinary actions should be taken if customs brokers fail to report their compliance with the continuing broker education requirement to CBP, or, in the alternative, fail to satisfy the continuing broker education requirement;
- What disciplinary actions should result from the submission of false or misleading information in association with the continuing broker education requirement;
- Whether disciplinary actions should be taken immediately upon a customs broker’s failure to report compliance with the continuing broker education requirement, or whether customs brokers should be provided with an opportunity to take corrective actions, including the length of such period;
- Whether there should be an accreditation process to control the quality of the content of the various educational activities (including how such an accreditation process should be administered, how accreditors should be selected, and whether educational activities offered through certain content providers should automatically qualify for continuing education credit);
- The types of training, coursework, or educational activities that customs brokers already complete on a regular basis;
- How often customs brokers currently participate in continuing education;
- The costs customs brokers would anticipate to incur as a result of the implementation of a continuing broker education requirement; and
- The benefits customs brokers would anticipate as a result of the implementation of a continuing broker education requirement.
The comment period opens Friday, September 10, 2021 and ends Tuesday, November 9, 2021. Comments can be submitted via the Federal eRulemaking Portal at www.regulations.gov (docket number USCBP 2021-0030). Although CBP generally also receives public comments by mail, CBP will not accept comments via mail for this proposed rule due to COVID-19-related restrictions.
Diaz Trade Law has extensive expertise on customs broker licensing matters and in preparing and submitting comments for rulemaking. Please reach out to us if you would like to submit comments to CBP informing the agency of your business’ recommendations for continuing education for licensed customs brokers. Comments are due November 9, 2021. Diaz Trade Law can be reached at firstname.lastname@example.org and 305-456-3830.