CBP Reports on Broker Self-Assessment Pilot, Recommends Ending Program
U.S. Customs and Border Protection has posted its report on the Broker Self-Assessment Outreach Pilot program that began in July 2009 and lasted for one year. CBP recommended that the pilot end without a plan to proceed with a similar model at this time.
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(The BSA pilot was a collaborative effort between CBP and the National Customs Brokers and Forwarders Association of America (NCBFAA). CBP and the customs brokerage community sought to model the pilot after the existing Importer Self-Assessment (ISA) program, which is based on the premise that importers with internal controls in place achieve the highest level of compliance with CBP laws and regulations.)
Information Obtained from Pilot Led to Decision to Not Proceed with Partnership
The pilot was successful in that it was effective in revealing several key factors that would be useful in making a decision whether to commit CBP resources to pursue such a partnership with customs brokers. Four out of twenty-seven broker applicants were selected to participate in the pilot based on CBP and the NCBFAA’s desire to have brokerages that represented small, medium, and large volume of activities.
CBP, Trade Experienced Challenges in Interpretation of Partnership Intent
A significant amount of work hours were expended by CBP towards data gathering, analysis, strategizing, meeting with each applicant, and post analysis relative to the amount of valued added for both CBP and the broker. Both CBP and the trade experienced some challenges in the interpretation of the partnership intent and translating that into pilot implementation. It is also important to highlight that each of the broker participants devoted a noteworthy amount of resources, working independently and in tandem with CBP, preparing for its internal control assessment.
Brokers as "Data Transmitters" Were Limited in Ensuring Imports Would be Highly Compliant
Brokers themselves admitted that they were limited in ensuring that import transactions would be highly compliant even though their internal controls over their customs operations (19 CFR Part 111 activities) may demonstrate a high level of compliance. The brokers participating in the pilot, and the NCBFAA at large, have stated that brokers are data transmitters and should not be held liable for “importer of record” responsibilities under the law and regulations; albeit prudent brokers review and may question transactions.
CBP Could Not Correlate Broker's Internal Controls into a Mitigating Risk Factor
Since CBP cannot directly correlate the body of work performed in evaluating a broker’s internal controls over its customs business into a mitigating risk factor that would facilitate the flow of legitimate trade, the BSA program as piloted would not prove a wise deployment of resources for CBP and/or the brokerage community. This report recommends that the BSA pilot end without a plan to proceed with another ISA-type model at this time. CBP has agreed with the NCBFAA to pursue other avenues to collaborate pertaining to trade modernization efforts.
(See ITT's Online Archives 07/30/09 news, 09073010, for BP summary announcing that CBP selected the four pilot participants.
See ITT's Online Archives or 05/01/09 news, 09050110, for BP summary of CBP listing BSA pilot program benefits, etc.)