NCBFAA Slams 'Resident Importer' Requirement in House CBP Bills
The non-resident importer requirement in the House customs reauthorization bills will “damage and disrupt commercial trade relationships in numerous countries,” said the National Customs Brokers and Forwarders Association of America in a strongly worded letter to Republican leaders on the House Ways and Means Committee. This is not the first time industry groups have spoken against the requirement (see 13030603). It requires importers that are commercial entities not organized within the U.S., or who are not U.S. citizens or lawfully permitted alien residents, to designate a resident importer. That person would be financially liable for any problems with the import. In a March 28 letter, NCBFAA President Darrell Sekin, Jr. said the requirement is ineffective because the nonresident importer-of-record is already required to post a bond. The new requirement would “impose a bond to cover a bond. Why isn’t the first bond sufficient?”
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The letter, sent to Committee Chairman Dave Camp, R-Mich., and Subcommittee Chairman Devin Nunes, R-Calif., also said the requirement is unclear about how the bonding will work: whether CBP will initially make a demand against the importer's bond before turning to the resident agent. If the resident agent then defaults and a second bond is implicated, the regulation is unclear about which surety stands as the primary one.
The regulation also levies heavy risk on whoever would be the resident agent, the letter said. Products subject to antidumping duties, for example, don't have a final duty rate determined for more than three years, which means the resident agent's liability can't even be measured at the time of entry. No customs broker will be willing to accept such a financial risk, the letter said, especially since broker's knowledge of the specifics of a transaction is "based on the representations of our client, unless we have good reason to believe otherwise. In short, we cannot be the financial guarantors to the U.S. government for the hundreds of thousands of entries we process."
In the letter, Sekin said the regulation's intent is to address the small slice of importers who "disappear into the night" when CBP tries to collect unpaid duties or penalties. Yet those bad actors will simply hone their illicit practices, he said, and the proposed requirement will hurt legitimate trade, especially with Canada, where many Canadian companies are the importer-of-record for products sold into the U.S. “If the intent of [the requirement] is to address non-resident importers who default on anti-dumping duty assessments, then the Committee should take another look at switching to a prospective system, where tighter control over duty collections can be maintained. Barring that, alternative solutions need to be considered, because whatever the answer, it is not the creation of an unrealistic and unworkable "registered agent" designation that would be highly disruptive to trade.”
Email ITTNews@warren-news.com for a copy of the letter.