[Federal Register Volume 78, Number 74 (Wednesday, April 17, 2013)]
[Notices]
[Pages 22895-22898]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-08968]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Test To Allow Customs Brokers To Pre-Certify Importers for 
Participation in the Importer Self-Assessment Program

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security.

ACTION: General notice.

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SUMMARY: This document announces U.S. Customs and Border Protection's 
(CBP's) plan to test allowing customs brokers to pre-certify importers 
for participation in the Importer Self-Assessment (ISA) program. The 
test will be known as the Customs Broker Importer Self-Assessment Pre-
Certification (Broker ISA PC) test. The primary goal of the Broker ISA 
PC test is to leverage customs broker relationships to facilitate and 
promote importer participation in the ISA program, especially for small 
and medium enterprises. This notice provides the eligibility criteria 
for voluntary participation in the test, explains the test program 
application process, describes the broker participant responsibilities, 
provides information for importer ISA applicants, and discusses the 
repercussions for misconduct under the test. This notice also invites 
public comment concerning the test program.

DATES: Communication to CBP indicating interest in participation in 
this planned test is requested within ten (10) business days from April 
17, 2013. Comments may be submitted to the email address indicated in 
the ADDRESSES section below at any time throughout the test.

ADDRESSES: Comments concerning this notice and indication of interest 
in participation in the Broker ISA PC test program should be submitted 
via email to [email protected]. For a comment, please indicate ``Broker 
ISA PC Federal Register Notice'' in the subject line of your email.

FOR FURTHER INFORMATION CONTACT: Florence Constant, Chief, Partnership 
Programs, Office of International Trade, U.S. Customs and Border 
Protection, (202) 863-6537.

SUPPLEMENTARY INFORMATION:

Background

    U.S. Customs and Border Protection (CBP) recognizes the importance 
of licensed customs brokers who serve as intermediaries between CBP and 
the trading community. Licensed customs

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brokers have played a significant role in the success of various CBP 
commercial initiatives, automation efforts, and security programs. 
Because of customs brokers' vital role, CBP, in partnership with the 
National Customs Brokers and Forwarders Association of America, Inc. 
(NCBFAA), worked in January 2011, to develop a program that could 
benefit both CBP and brokers while addressing the challenges of 21st 
Century commerce. An outcome of this joint collaborative trade 
modernization effort is the creation of a role for the broker in CBP's 
Importer Self-Assessment (ISA) program.
    The Broker Importer Self-Assessment Pre-Certification (ISA PC) test 
will leverage broker relationships to promote participation in the ISA 
program by allowing selected brokers, referred to as ISA pre-
certifiers, to pre-certify importers for the ISA program. Through their 
communication with importers, the ISA pre-certifiers will provide 
information on the ISA program and work to expedite the ISA application 
process for importers who choose to use their services. The aim is that 
by serving as liaisons between CBP and the trade community, the ISA 
pre-certifiers will act as a ``force multiplier'' for CBP in 
facilitating and expediting legitimate trade, increasing the pool of 
trusted traders with minimal allocation of CBP resources.
    The ISA program was established in 2002 to enable interested 
importers to participate in a program that allows them to self-assess 
their own compliance with customs laws and regulations on a continuing 
basis. See 67 FR 41298 (June 17, 2002). The ISA program is a trade 
facilitation partnership program that recruits trade compliant 
companies with the goals of reducing both CBP and company resources 
required during entry and post-entry processes, and of building 
cooperative relationships that strengthen compliance with trade laws. 
The ISA program is based on the premise that importers with strong 
internal controls are more likely to achieve a high level of compliance 
with customs laws and regulations and the program provides a means for 
CBP to recognize and support importers who have implemented such 
systems. Importers who wish to participate in the ISA program may apply 
directly to CBP and this will not change under this Broker ISA PC test. 
For more information on the ISA program, please see the Importer Self-
Assessment Handbook available online at www.cbp.gov.

Broker Importer Self-Assessment Pre-Certification Test Program

    Participation in the Broker ISA PC test program is voluntary for 
customs brokers. Under this test, CBP will select no more than nine (9) 
licensed customs broker sole proprietorships and/or licensed customs 
brokerages who apply for this test. After completing the required 
orientation, ISA pre-certifiers may provide Broker ISA PC services to 
importers who apply for participation in the ISA program. Interested 
importers who wish to use the services of a pre-certifier must submit a 
complete ISA application package to both CBP and the ISA pre-certifier 
whom they select (once approved, a list of ISA pre-certifiers will be 
available online at www.cbp.gov). More information on the ISA PC 
Evaluation Process is provided later in this notice. Broker ISA PC 
services include the evaluation of the importers' customs policies, 
procedures, and readiness to participate in the ISA program, the 
submission of evaluation results to CBP, and a ``pre-certification'' 
that the importer has demonstrated that they are ready to assume the 
responsibilities of the ISA program.

Eligibility Requirements

    Licensed customs brokerages and licensed customs broker sole 
proprietorships seeking to participate as ISA pre-certifiers in the 
Broker ISA PC test program must:
    1. Have operated as a licensed customs broker representing 
importers as a filer (under the licensed broker's filer code) for at 
least five (5) consecutive years immediately prior to the date of 
application;
    2. Have been C-TPAT certified as a broker for at least three (3) 
consecutive years immediately prior to the date of application;
    3. Have maintained written internal control procedures designed to 
ensure compliance with CBP related activities;
    4. Have been trained in internal control concepts based on the 
Committee of Sponsoring Organization (COSO) Internal Control--
Integrated Framework course; and
    5. Have a history of compliance with customs laws and regulations.
Customs brokers who participate in the Broker ISA PC test must remain 
in compliance with all statutory and regulatory requirements, including 
19 U.S.C. 1641 and 19 CFR Part 111, when conducting customs business.

Application Process

    CBP will limit the initial test phase to no more than nine (9) 
participants. Any party seeking to participate must submit an email to 
[email protected] with the subject heading ``Broker ISA PC Participant 
Request.'' All emails must be received within ten (10) business days of 
the date of publication of this notice. Only parties meeting all of the 
eligibility requirements set forth above should submit a participant 
request email. CBP will assign a number to each email in the order in 
which they are received beginning with the number 1 and ending with the 
total number of emails received. CBP will then use random number 
generating software to generate nine (9) numbers from the pool of 
interested brokers. Once the nine (9) candidates are selected at 
random, CBP will provide each of these candidates with an ISA pre-
certifier questionnaire that must be completed and reviewed by CBP. 
Qualified candidates will be invited to attend the ISA Pre-Certifier 
Orientation and begin offering Broker ISA PC services.

Procedure to Contest Non-Selection

    If, after reviewing the ISA pre-certifier questionnaire, CBP finds 
any candidate to be unqualified for participation in the Broker ISA PC 
program, the Executive Director of Trade Policy and Programs will 
provide that candidate with a written explanation of its determination. 
The non-selected candidate will be offered the opportunity to appeal 
the Executive Director's decision within 30 calendar days of receipt of 
the written decision. Appeals should be forwarded to U.S. Customs and 
Border Protection, Assistant Commissioner, Office of International 
Trade, 1400 L Street, NW., Washington, DC 20229-1155. The Assistant 
Commissioner will issue a final written decision on the candidate's 
appeal within fifteen (15) working days after receiving a timely filed 
appeal from the candidate. If no timely appeal is received, the written 
explanation becomes the final decision of the Agency as of the date 
that the appeal period expires.

ISA Pre-Certifier Orientation

    After determining which candidates are qualified to participate, 
CBP will invite the selected candidates to attend CBP's ISA Pre-
Certifier Orientation. The goal of this orientation is to provide the 
brokers with training, guidance, and requirements pertaining to the 
Broker ISA PC participant responsibilities. After successful completion 
of the orientation, the licensed customs brokers will become ISA pre-
certifiers who can conduct ISA PC evaluations.

ISA Pre-Certifier Status

    ISA pre-certifier status is non-transferrable. An ISA pre-certifier 
may

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not subcontract with third parties to conduct ISA PC evaluations.

Further Expansion of the Test

    Any further expansion of the Broker ISA PC test, including but not 
limited to the number of participants, will be announced via a separate 
Federal Register notice.

Broker ISA PC Participant Responsibilities

ISA PC Evaluation Process

    Interested importers who wish to use the services of a pre-
certifier must submit a complete ISA application package (see ISA 
Federal Register notice at 67 FR 41298 (June 17, 2002)) to both CBP and 
the ISA pre-certifier whom they select (once approved, the list of ISA 
pre-certifiers will be available online at www.cbp.gov). If an importer 
uses the services of an ISA pre-certifier, they must note this at the 
time they submit their ISA application. An importer cannot apply solely 
to CBP and later decide to use the services of an ISA pre-certifier. 
CBP will begin the review and vetting process, which will include an 
initial risk assessment, for the application and assign a National 
Account Manager (NAM) if one has not already been assigned to the 
importer. The NAM will then provide the importer with its import data 
that CBP possesses, as well as help to focus the ISA pre-certifier's 
efforts on the areas for the review.
    Once the initial review and vetting is complete, CBP will notify 
the ISA pre-certifier's primary contact via email. Once an ISA pre-
certifier is notified to proceed with the evaluation of the ISA 
application package, the ISA pre-certifier will:
    1. Review the ISA application package to ensure that all required 
elements are present and complete;
    2. Evaluate the importer's written customs-related policies and 
procedures and identify areas of risk;
    3. Assess the design of the importer's internal control for 
achieving compliance with customs laws and regulations, and develop an 
expectation about the operating effectiveness of its internal control;
    4. Consult with the importer, if necessary, on best practices and 
improvement considerations;
    5. Assess the adequacy of the importer's risk-based self-testing 
plan; and
    6. Conclude the ISA PC evaluation and determine the importer's ISA 
readiness.
    Once the ISA pre-certifier completes its evaluation, it is required 
to prepare and submit to CBP an ISA Evaluation Report based on CBP 
guidelines, with the following supporting documentation:
     Written risk assessment;
     Summary of the walk-through conducted of the entry 
process; and
     Synopsis of the importer's risk-based self-testing plan.
    If required, the ISA pre-certifier will provide additional 
information or clarification concerning the evaluation to CBP. The ISA 
Evaluation Report will be processed for certification and approval in 
accordance with established ISA program procedures. CBP maintains and 
reserves the right to approve or disapprove any ISA application.

Annual Reporting Requirements

    On an annual basis, the ISA pre-certifier will be required to 
submit a report to CBP attesting to its continued commitment to adhere 
to the requirements of the Broker ISA PC test program. The annual 
submission will, at a minimum, include the following information:
    1. Personnel changes that impact the Broker ISA PC test program;
    2. Organizational and procedural changes;
    3. Continued proficiency training, seminars, etc., taken by the ISA 
pre-certifier;
    4. ISA applicant name(s) and importer of record number(s) for 
completed and pending ISA PC evaluations conducted during the last year 
and of any ISA PCs in progress; and
    5. Any broker penalties incurred during the last 12-month period.

Confidentiality Requirements

    All records pertaining to the business of ISA applicants serviced 
by an ISA pre-certifier are to be considered confidential business 
records of the ISA applicant. The ISA pre-certifier must not disclose 
the contents of, or any information connected with, the records to any 
third parties other than personnel involved with the ISA program from 
CBP's Offices of International Trade and Field Operations and from U.S. 
Immigration and Customs Enforcement--Homeland Security Investigations, 
as necessary.

Recordkeeping Requirements

    All records made or acquired by ISA pre-certifiers pertaining to 
the Broker ISA PC test program must be stored and maintained separately 
from records subject to recordkeeping requirements under 19 CFR part 
111 and 19 CFR part 163. CBP reserves the right to request all ISA PC 
evaluation supporting documentation. Records shall be retained for at 
least five (5) years after the final date of approval or rejection of 
the ISA application.

Information for Importer ISA Applicants

    Importers interested in applying to participate in the ISA program 
have the option of using the Broker ISA PC services (most likely for a 
fee) of any ISA pre-certifier to facilitate participation in the ISA 
program. Alternatively, importers may continue to apply for 
participation in the ISA program without using the services of an ISA 
pre-certifier. CBP will compile a list of ISA pre-certifiers that are 
available to the public and will post this list on CBP's Web site, 
www.cbp.gov. CBP will continue to conduct ISA evaluations for importers 
that apply for ISA participation and do not choose to use the services 
of an ISA pre-certifier.
    A key benefit of using the services of an ISA pre-certifier is the 
facilitation of the ISA application process. It is expected that use of 
an ISA pre-certifier's ISA PC services will reduce the time period from 
application to presentation to the ISA Review Board from the average 
processing time for CBP which is between nine (9) and 12 months to 
between 90 and 120 days. The importer will initiate the CBP process by 
submitting its ISA application to CBP and also sending a copy to its 
chosen ISA pre-certifier. The importer must indicate on the cover 
letter the name of the ISA pre-certifier it selected for the 
evaluation; otherwise the ISA application will be evaluated by CBP.

ISA Application Review

    Upon receipt of the ISA application, CBP will review it for 
completeness and accuracy. CBP will verify that the importer meets 
threshold eligibility criteria and notify the ISA pre-certifier whether 
or not to proceed with Broker ISA PC services. The ISA pre-certifier 
will conduct evaluations of the importer's written procedures, self-
testing plan, and overall system of internal control in accordance with 
CBP's ISA evaluation guidelines. Please refer to the ``ISA PC 
Evaluation Process'' section above for a more detailed description of 
the process. The role of the ISA pre-certifier will be to evaluate the 
design of the importer's internal control, which involves determining 
if internal control is documented, logical, reasonably complete, and is 
likely to prevent or detect non-compliance in identified risk areas. At 
the conclusion of its evaluation, the ISA pre-certifier will draft an 
ISA Evaluation Report on the importer's readiness to participate in

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the ISA program and submit it to CBP. If the ISA pre-certifier finds 
that the importer is ready to assume the responsibilities of the ISA 
program, the ISA pre-certifier will pre-certify the importer. CBP will 
review the ISA pre-certifier's evaluation report and applicable 
supporting documentation and then make a final determination on whether 
the importer is approved and certified to participate in the ISA 
program. CBP will notify the ISA pre-certifier and the importer of its 
final determination.

Final ISA Approval Process

    Once the ISA pre-certifier submits the ISA Evaluation Report, CBP 
will review and verify the soundness of the report and the supporting 
documentation provided. CBP will provide the ISA pre-certifier with 
feedback on the ISA Evaluation Report and allow time to resolve any 
issues or questions. The ISA Evaluation Report will be submitted to the 
ISA Review Board, an independent body consisting of representatives 
from U.S. Immigration and Customs Enforcement, as well as the CBP 
Offices of Field Operations and International Trade, for final approval 
during periodic meetings. The ISA pre-certifier will provide the ISA 
Review Board with a summary of the ISA Evaluation Report results and 
support the conclusion as to the importer's readiness to assume the 
responsibilities of the ISA program and answer any related questions 
that the Board may have.

Request for Reconsideration for Rejected ISA Applications

    If during the final ISA approval process, the ISA Review Board 
determines that an ISA application should not be approved, it will 
inform the Partnership Programs Branch, which will issue a written 
notice to the ISA pre-certifier and ISA applicant indicating the 
reason(s) for the rejection. The ISA pre-certifier and/or ISA applicant 
may submit a written request for reconsideration if the reason(s) for 
the rejected ISA application has been corrected within 90 days of 
receipt of the notice. The request for reconsideration should be 
forwarded to U.S. Customs and Border Protection, Executive Director, 
Trade Policy & Programs, Office of International Trade, 1400 L Street 
NW., Washington, DC 20229-1155.
    A final written decision on the request for reconsideration will be 
issued within 45 days of receipt of the request. The ISA pre-certifier 
and/or applicant may respond to denials, in writing, to the Assistant 
Commissioner, Office of International Trade, at the following address: 
U.S. Customs and Border Protection, Assistant Commissioner, Office of 
International Trade, 1400 L Street NW., Washington, DC 20229-1155.

Misconduct Under the Test

    The Executive Director of Trade Policy and Programs may revoke a 
broker's participation privileges under the Broker ISA PC test program 
if the licensed broker serving as an ISA pre-certifier:
    1. Obtains participation in the program through false statement, 
act, or omission;
    2. Commits an act that would constitute a misdemeanor or felony;
    3. Refuses to cooperate with CBP in response to any inquiry, audit, 
or investigation;
    4. Fails to meet the program eligibility requirements outlined in 
this Federal Register notice or fails to abide by the terms, conditions 
and obligations of this test ;
    5. Submits an ISA Evaluation Report that contains misstatements of 
fact;
    6. Evaluates the importer's ISA application package contrary to 
Broker ISA PC evaluation procedures and agreed upon processes;
    7. Submits ISA Evaluation Reports that are consistently inadequate 
and require additional evaluation or documentation to support the 
conclusion of the importer's readiness to participate in the ISA 
program;
    8. Has their entry filer code revoked;
    9. Incurs excessive broker penalties; or
    10. Fails to comply with applicable laws and regulations.
    If the Executive Director of Trade Policy and Programs believes 
that there is a basis for revocation of an ISA pre-certifier's 
participation privileges, a written notice of removal with a 
description of the facts warranting removal will be provided to the ISA 
pre-certifier. The ISA pre-certifier will be offered the opportunity to 
appeal the Executive Director's decision within 30 calendar days of 
receipt of the written notice providing for proposed revocation. 
Appeals should be forwarded to U.S. Customs and Border Protection, 
Assistant Commissioner, Office of International Trade, 1400 L Street 
NW., Washington, DC 20229-1155. The Assistant Commissioner will issue a 
final written decision on the discontinuance within fifteen (15) 
working days after receiving a timely filed appeal from the ISA pre-
certifier. If no timely appeal is received, the notice becomes the 
final decision of the Agency as of the date that the appeal period 
expires.
    In the case where CBP proposes to suspend or revoke a broker's 
license or a criminal charge is filed against the broker, CBP may 
immediately discontinue the ISA pre-certifier's participation 
privileges upon written notice to the ISA pre-certifier. The notice 
will contain a description of the facts or conduct warranting the 
immediate action. The ISA pre-certifier will be offered the opportunity 
to appeal CBP's decision within ten (10) calendar days of receipt of 
the written notice providing for immediate discontinuance. The 
immediate discontinuance will remain in effect during the appeal 
period. CBP will issue a final written decision on the discontinuance 
within fifteen (15) working days after receiving a timely filed appeal 
from the ISA pre-certifier. If no timely appeal is received, the notice 
becomes the final decision of the Agency as of the date that the appeal 
period expires.

Evaluation of Test

    CBP will review the effectiveness and feasibility of the Broker ISA 
PC test program one (1) year after the date of the ISA Pre-Certifiers 
Orientation. Based on the results and lessons learned from the test, 
CBP will determine if the Broker ISA PC will be fully implemented as a 
permanent program.

    Dated: April 11, 2013.
Allen Gina,
Assistant Commissioner, Office of International Trade.
[FR Doc. 2013-08968 Filed 4-16-13; 8:45 am]
BILLING CODE 9111-14-P