On Oct. 18, 2022 U.S. Customs & Border Protection published two Final Rules under the Federal Register. The two rules are “Modernization of Customs Broker Regulations under 87 FR 63267” and “Elimination of Customs Broker District Permit Fee under 87 FR 63262.” CBP also held two webinars to discuss changes to 19 CFR 111. The first webinar was for “Customs Broker Modernization Regulations – Detailed changes to 19 CFR 111,” which was held on October 27, 2022. The second webinar was for “Customs Broker Modernization Regulations – Operationalizing changes to 19 CFR 111,” which was held on November 9, 2022.
Modernization of Customs Broker Regulations
Under the Modernization of Customs Broker Regulations, a customs broker must execute a Power Of Attorney with an Importer Of Record. A customs broker cannot execute a POA through a freight forwarder or other third-party in order to transact customs business on behalf of the importer. An Importer Of Record (IOR) must execute and sign the POA directly with the customs broker. An agent or third party cannot sign or negotiate the POA on the IOR’s behalf. However, the IOR may have an agent or third-party assist in executing the POA.
Elimination of Customs Broker District Permit Fee
Under the Elimination of Customs Broker District Permit Fee, CBP is eliminating broker districts and district permits. This removes the requirement for the maintenance of district offices, and district permit waivers. CBP is transitioning all brokers to national permits. By allowing this national permit holder would be able to conduct any type of customs business throughout the customs territory of the United States.
Below is a list of some changes coming to Federal Registry 87 FR 63627 and 87 FR 63262 that will be effective Dec. 19, 2022:
Transition to a National Permit:
- CBP eliminated broker districts and district permits.
- Current district permit holders without a national permit will be automatically transitioned to a national permit before the final rule effective date on 12/19/22.
- Allows the broker to conduct customs business on a national scope.
- Eliminates permit waivers and simplifies permit management.
Under the transition to National Permit:
During the 60-days between Final Rule publication on October 18, 2022 and the effective date on December 19, 2022, U.S. Customs & Border Protection is transitioning all customs brokers operating solely under a district permit to a national permit as follows:
- CBP will transition this pool of brokers to a national permit between the publication date and effective date of the Final Rules, December 19, 2022.
- Current district permits will remain active until the effective date of the Final Rules and ACE National Permit programming is in place, December 19, 2022.
- CBP will use a broker’s current district permit information for the creation of 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.
- Brokers that already have an active national permit are not affected by the 60-day transition activity.
Relationship Between Customs Broker/Client:
- Customs Brokers must execute a customs power of attorney directly with the importer of record and not though an freight forwarder or other (unlicensed) third party, to transact customs business for that importer of record
- Customs Brokers must advise the client on the proper corrective actions required in the case of noncompliance or an error or an omission on the client’s part, and retain a record of their communication with the client.
Cyber Security and Records Requirements:
- Customs Brokers must maintain original records, including electronic records, within the U.S. customs territory.
- Customs Brokers must notify CBP when there has been a breach of electronic or physical broker records and provide the compromised importer of record numbers.
- Regulatory revisions to records confidentiality allows brokers to share client information with third parties when authorized in writing by the client.