PCC Says 'Future of Broker' Includes Reasonable Data Requirements, Some New Education Requirements
As technology rapidly changes the role of customs brokers, "importers and exporters will be increasingly dependent on brokers to provide data management, advice on valuation and classification, and to be the gateway to CBP programs," according to a new report on the role of brokers produced by the Pacific Coast Council of Customs Brokers and Freight Forwarders (PCC). The report was submitted to Deputy Commissioner David Aguilar as part of its discussion with CBP policymakers over recent months on issues on the Role of the Broker.
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"Even as they continue to expand services into areas beyond CBP's jurisdiction, such as freight services, the small to medium size brokers will remain essential to bringing CBP programs and policies to precisely those importers and exporters that CBP will find most difficult to reach," the report said. "The PCC embraces the opportunities these and as yet unforeseen changes will provide for our member brokers and forwarders."
The PCC's Role of the Broker Working Group was formed to make recommendations about the current and future role of customs brokers, particularly relating to regulatory and policy changes contemplated by CBP, it said.
Its recommendations include that if the CBP proposes that the broker collect additional data from an importer:
- Any required data must be capable of being collected with reasonable effort in the commercial operations of the importer and broker.
- CBP must mandate that the importer of record provide the data to the customs broker and provide a specific list of data elements to be provided to the broker by the importer: "A vague requirement for the broker to exercise 'due diligence' is unacceptable and will be unworkable."
- Any new regulations on collection of importer data must apply equally to all customs brokers, regardless of size.
- The data must be consistent with CBP's commercial responsibilities.
- CBP must accept the data via modern electronic transmission technology.
The report said the PCC doesn't believe CBP should establish a new "virtual permit" or any other new permit system, until it adopts remote electronic functionality, electronic document imaging, and ends reliance of its port offices on outdated processes such as hard paper copy and faxes.
It also said the PCC "values and endorses a continuing education requirement." It said the requirement should apply to customs brokers who declare "active" status, and not to those who are "inactive."
Small to medium sized brokers must have full access to the Centers of Excellence and Expertise, in order to assure maximum compliance by their importer customers, particularly the many smaller volume importers which CBP has the most difficulty in reaching, it said, and customs brokers can be encouraged, "but must not be mandated," to assist importers in pre-certification for ISA or becoming C-TPAT certified.
"It is clear that CBP and the broker community share a fundamental objective: to assure importers' compliance with federal regulations," the report said. But it said it's "evident that the customs broker's role and activities in the supply chain exceed CBP's regulatory scope. ... "Many importers look to customs brokers to resolve any problem or issue that will delay a release of a shipment from the terminal or container freight station, whether it is customs business or not. ... It is the view of the PCC that such activities should remain outside of the regulatory scope of CBP."
On proposed changes to CF 5106, the PCC said it "wishes to work with CBP to assure that the data elements which may be used to establish the importer's bona fides are realistically obtainable and useful." It also said the data must be consistent with CBP's commercial responsibilities and CBP must decide if the broker will have the flexibility to submit a certain number of those elements. "The PCC believes strongly that should ... data fields be added to 5016 that modern electronic transmission technology be used."
"The PCC does not believe the establishment of a new 'virtual permit' is functionally necessary or even beneficial," it said. Instead, it said the current permit system "can and should be modernized to reflect current technology universally used in the private sector. With the implementation of the Centers for Expertise and Excellence (CEE) full functionality can be achieved by including all brokers and importers. Otherwise very few brokers would benefit from a 'virtual permit' system."
"In the current constrained budget environment, a more efficient expenditure of CBP resources would be to bring the existing national permit into the 21st century by CBP's adoption of current communication technology," the PCC said. "CBP can thereby allow efficient remote functionality in electronic transmission from brokers to CBP. With higher remote electronic functionality, document imaging and less reliance on grossly outdated processes (hand delivery of hard paper copy and faxes has long been replaced by e-mail in the private and public sector)."
On the continuing education requirement, PCC said it may appoint a subcommittee to explore how other industries handle continuing education, and to make recommendations: "A system similar to the NCBFAA's NEI CCS/CES system has proven workable as have programs offered by regional and local customs broker associations, and other trade groups."
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