CBP Issues General Notice on Broker Self-Assessment Pilot Program

Applications are due by May 27, 2009. After that date, CBP will review the applications received and select a limited number to participate in the pilot from those that are representative of key sectors of the brokerage community or whose structure and processes present potential challenges.

(At the recent National Customs Brokers and Forwarders Association of America annual conference, CBP officials stated that CBP is initially seeking four Customs brokers for the pilot program - one larger broker (files over 100,000 entries per year), one medium broker (files over 10,000 entries per year), and two small brokers (file under 10,000 entries per year).)

BSA Pilot to Utilize ISA Principles, Incorporate More Flexible Compliance Approach

Based on the effectiveness of the Importer Self-Assessment (ISA) program, CBP is initiating the BSA pilot program, which will allow CBP to assist and facilitate broker compliance with their existing statutory and regulatory requirements under 19 USC 1641 and 19 CFR Part 111¹.

The BSA pilot program is intended to be a partnership program between CBP and licensed customs brokers and will utilize many of the self-assessment principles of the ISA program while incorporating new methodologies that will provide a more flexible approach to promoting broker compliance. Its primary goal is to facilitate a higher level of broker compliance with CBP laws and regulations.

BSA Pilot Program Eligibility Requirements

In order to be eligible to participate in the BSA pilot program, a licensed customs broker must:

Have been licensed for a minimum of five years

Possess a broker national permit

Be a Customs-Trade Partnership Against Terrorism (C-TPAT) member with full benefits

Work in an automated environment through the Automated Broker Interface (ABI) and the Automated Commercial Environment (ACE)

Agree to comply with all applicable CBP laws and regulations

Have and maintain a system of business records that demonstrates the accuracy of CBP transactions

Complete a BSA Pilot Questionnaire (which will be sent after CBP receives an application) and agree to:

• Continue to maintain and update its internal controls;
• Perform periodic testing of its internal control system based on risk;
• Make appropriate adjustments to the internal controls system with an eye toward improvement;
• Inform CBP, through certain voluntary disclosures permitted under the BSA pilot program, of deficiencies identified in periodic testing; and
• Maintain an audit trail linking financial records to entries filed with CBP.

(See CBP's notice for information on the application process.)

CBP Multi-Disciplinary Team to Review Applicants/Participants

Each broker chosen to participate will be provided with a BSA Participation Agreement. A CBP multi-disciplinary team consisting of regulatory auditors, national account managers, and other field personnel necessary to conduct a review will then visit the applicant for a consultation to discuss and review the broker's internal controls on how they conduct their customs business.

The broker will be accepted into the BSA pilot program if CBP determines the applicant's internal controls are maintained and updated and the applicant is prepared to perform periodic testing of its internal control system based on risk; make appropriate adjustments to the internal controls system with an eye toward improvement; inform CBP, through certain voluntary disclosures permitted under the BSA pilot program, of deficiencies identified in periodic testing; and maintain an audit trail linking financial records to entries filed with CBP.

CBP notes that if a broker does not maintain these obligations, CBP reserves the right, in its discretion, to disqualify a broker from participation in the BSA pilot program.

CBP to Review Pilot One Year After its Effective Date

CBP states that it intends to review the BSA pilot program within one year after its effective date to measure its effects and achievements, and recommend whether the BSA program will become a permanent program.

BSA Pilot Program Will Allow CBP to Focus on Higher-Risk Trade Enforcement Issues

The BSA pilot program will allow for customs brokers to ascertain voluntarily with CBP how well they comply with their broker requirements, provide recognition and support to participating brokers, and facilitate legitimate trade so that CBP can focus on higher-risk trade enforcement issues.

Detailed information concerning the BSA Pilot and the questionnaire will be available on the CBP Web site at: http://www.cbp.gov/xp/cgov/trade/trade_programs/bsa.

¹ Notwithstanding this pilot, all existing requirements continue to apply.

(See ITT's Online Archives or 04/23/09 news, 09042305, for BP summary of CBP officials discussing the BSA pilot program at the recent NCBFAA conference.

See ITT's Online Archives or 05/05/08 news, 08050505, for BP summary announcing that CBP was collaborating with NCBFAA to establish a Broker Compliance Management Program.)

CBP contact- Anita Harris (202) 863-6069 or BrokerSelfAssessment@cbp.dhs.gov

CBP general notice (FR Pub 04/27/09) available at http://edocket.access.gpo.gov/2009/pdf/E9-9551.pdf