[Federal Register Volume 85, Number 209 (Wednesday, October 28, 2020)]
[Proposed Rules]
[Pages 68260-68268]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-22604]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

19 CFR Part 111

[Docket No. USCBP-2020-0042]
RIN 1651-AB03


Continuing Education for Licensed Customs Brokers

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

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: U.S. Customs and Border Protection (CBP) is considering the 
amendment of its regulations to mandate continuing education for 
licensed customs brokers. CBP is seeking comments on a potential 
framework of continuing education requirements for licensed customs 
brokers in order to assess the current situation among members of the 
customs broker industry and analyze the potential impact of such a 
framework on customs brokers.

DATES: Comments must be received on or before December 28, 2020.

ADDRESSES: You may submit comments, identified by Docket No. USCBP 
2020-0042, by one of the following methods:
    1. Federal eRulemaking Portal: http://www.regulations.gov. Follow 
the instructions for submitting comments via Docket No. USCBP-2020-
0042.
    2. Mail: Trade and Commercial Regulations Branch, Regulations and 
Rulings, Office of Trade, U.S. Customs and Border Protection, 90 K 
Street NE (10th Floor), Washington, DC 20229-1177.
    3. Confidential Information: If you want to submit a comment with 
confidential information that you do not wish to be made available to 
the public, please submit the comment as a written/paper submission by 
mail to the address listed above (see ``Mail'').
    Instructions: All submissions received must include the agency name 
and docket number for this rulemaking. All comments received (other 
than those submitted with confidential information) will be posted 
without change to http://www.regulations.gov, including any personal 
information provided.
    Confidential Submissions: To submit a comment with confidential 
information that you do not wish to be made publicly available, submit 
your comments only as a written/paper submission. You should submit two 
copies of your comments. One copy will include the information you 
claim to be confidential with a heading or cover note that states 
``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' CBP will review 
this copy, including the claimed confidential information, in its 
consideration of comments. The second copy, which will have the claimed 
confidential information redacted/blacked out, will be available for 
public viewing and posted by CBP on http://www.regulations.gov. Submit 
both copies by mail, as instructed under ADDRESSES above (see 
``Mail''). If you do not wish your name and contact information to be 
made publicly available, you can provide this information on the cover 
sheet and you must identify this information as ``confidential.''
    For detailed instructions on submitting comments and additional 
information on the rulemaking process, see the ``Public Participation'' 
heading of the SUPPLEMENTARY INFORMATION section of this document.
    Docket: For access to the docket to read background documents or 
comments received, go to http://www.regulations.gov. Due to the 
relevant COVID-19 related restrictions, CBP has temporarily suspended 
on-site public inspection of the public comments. Please note that any 
submitted comment that CBP receives by mail will be posted on the 
above-referenced docket for the public's convenience, except for those 
containing confidential information (pursuant to the procedures set 
forth above).

FOR FURTHER INFORMATION CONTACT: Elena D. Ryan, Special Advisor, 
Programs and Policy Analysis, Regulations and Rulings, Office of Trade, 
U.S. Customs and Border Protection, at (202) 325-0001 or 
[email protected], including questions regarding the 
submission of confidential information.

SUPPLEMENTARY INFORMATION:

I. Public Participation

    Interested persons are invited to participate in this potential 
rulemaking by submitting written data, views, or arguments on all 
aspects of this advance notice of proposed rulemaking (ANPRM). U.S. 
Customs and Border Protection (CBP) also invites comments that relate 
to the economic, environmental, or federalism effects that might result 
from this ANPRM. See ADDRESSES above for information on how to submit 
comments. The most useful comments would be those that

[[Page 68261]]

address the specific questions outlined in section III below.
    If you wish to submit any protected information in your comments, 
you must submit your comment by mail to the address listed under 
ADDRESSES. Protected information includes confidential business or 
commercial information that is not normally released to the public. 
Please be sure to indicate whether the entire submission constitutes 
protected information, or if only portions of the submission need to be 
protected. If the latter, please identify those portions which 
constitute protected information clearly within your submission. If you 
are submitting confidential business information, please explain, 
within your submission, how this information is normally treated within 
your company or organization.

II. Background

A. Authority and Potential Framework for Continuing Education 
Requirements

    Section 641 of the Tariff Act of 1930, as amended (19 U.S.C. 1641), 
provides that individuals and business entities must hold a valid 
customs broker's license and permit to transact customs business on 
behalf of others. The statute also sets forth standards for the 
issuance of broker licenses and permits; provides for disciplinary 
action against brokers in the form of suspension or revocation of such 
licenses and permits or assessment of monetary penalties; and provides 
for the assessment of monetary penalties against other persons for 
conducting customs business without the required broker's license.
    Section 641 authorizes the Secretary of the Treasury \1\ to 
prescribe rules and regulations relating to the customs business of 
brokers as may be necessary to protect importers and the revenue of the 
United States and to carry out the provisions of section 641. DHS 
believes that this statute provides the authority to regulate customs 
brokers by imposing continuing education requirements.
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    \1\ The Homeland Security Act of 2002 generally transferred the 
functions of the U.S. Customs Service from the Department of the 
Treasury to the Secretary of the Department of Homeland Security 
(DHS). See Public Law 107-296, 116 Stat. 2142. The Act provides that 
the Secretary of the Treasury retains customs revenue functions 
unless delegated to the Secretary of DHS. Treasury did not retain 
the subject matter relating to the regulation of customs brokers (19 
U.S.C. 1641) as that subject is not listed in paragraph 1(a)(i) of 
the Treasury Department Order No. 100-16. See appendix to 19 CFR 
part 0.
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    CBP is considering the promulgation of regulations to create a 
framework of continuing education requirements in order to maintain a 
high standard of professionalism in the customs broker industry. CBP's 
goal with the publication of this ANPRM is to gather information and 
data from the broker industry in order to analyze and identify 
information that would help CBP in considering whether, and if so what 
type of, mandatory requirements would be beneficial for the trade 
community and CBP. CBP believes that requiring customs brokers to take 
continuing education courses would enhance the credibility and value of 
a customs broker's license and improve a broker's skills, performance, 
and productivity. CBP also believes that this would increase client 
service and compliance with the customs laws, which would protect the 
revenue of the United States and the trade community.

B. Customs Broker's Statutory Duties, Customs Broker Exam, and 
Licensing

    Under 19 U.S.C. 1641(b)(4), a customs broker has the statutory duty 
to exercise responsible supervision and control over the customs 
business that he or she conducts. Maintaining current knowledge and 
competence is an inherent part of the statutory duty of the customs 
broker. A customs broker reasonably can be expected to uphold such 
responsible supervision over his or her employees and control over his 
or her customs business only by acquiring and maintaining the knowledge 
of customs and related laws. Requiring a customs broker to fulfill a 
continuing education requirement during the course of his or her work 
is a way to ensure that the customs broker keeps up with an ever-
changing customs practice following the passing of the broker exam and 
subsequent receipt of the license.
    CBP is responsible for administering the licensing for customs 
brokers. See Title 19 part 111, subpart B of the Code of Federal 
Regulations (19 CFR part 111, subpart B). A prospective customs broker 
must pass a broker exam prepared by CBP, which is designed to determine 
the individual's knowledge of customs and related laws, regulations and 
procedures, bookkeeping, accounting, and all other appropriate matters 
necessary to render valuable service to importers and exporters.
    After passing the customs broker exam, CBP will investigate whether 
an applicant is qualified for a broker's license, taking into account 
information provided by the applicant and other aspects pertaining to 
the applicant, such as his or her business integrity. If CBP finds that 
the applicant is qualified and has paid all applicable fees, CBP will 
issue a broker's license. Following the issuance of a license, a 
customs broker administratively maintains a license primarily through 
the payment of fees required in 19 CFR 111.96, and the reports and 
notifications to CBP set forth in 19 CFR 111.30.
    While the broker exam provides a good initial indication of an 
individual's knowledge of customs and related laws, regulations and 
procedures, bookkeeping, accounting, and all other appropriate matters, 
the broker exam is, by necessity, limited in scope. The broker exam 
only captures a state of customs and related laws at a certain point in 
time and a person's knowledge of such laws at a single point in time. 
The broker exam also does not test for any of the requirements of the 
approximately 50 Partner Government Agencies (PGAs) involved in 
regulating imports and exports. The complex nature of trade and the 
ever-changing and expanding requirements to comply with U.S. and 
international law require that a customs broker maintain a high level 
of functional and accessible knowledge to stay efficient and compliant 
over time.

C. A Broker's Responsibilities in a Dynamic Trade Environment

    Recent developments have demonstrated the need for key parties 
involved in importing and exporting to keep up-to-date on training and 
continuously build and maintain their knowledge of current 
requirements. For example, the Trade Facilitation and Trade Enforcement 
Act of 2015 (TFTEA) (Pub. L. 114-125, 130 Stat. 122, February 24, 2016) 
required the issuance of new rules to protect domestic industry from 
dumping by foreign competitors (19 CFR part 165) and to modernize the 
processes surrounding duty refunds through the drawback program (19 CFR 
part 190). Both of these rules are complicated and detailed, requiring 
entities in the trade--particularly customs brokers serving as the 
fiduciary agents of the affected importers and exporters --to learn 
entirely new legal and technical processes. In addition to 
understanding the implementation of new regulations, a customs broker 
also needs to know how to research answers to complex questions. For 
example, determining the country of origin of imported merchandise is 
much less straightforward than it was in the past, as traders source 
inputs from various countries and may assemble those inputs in yet 
another country, before a final product results.
    The past several years, in particular, have posed challenges for 
both CBP and the trade alike, requiring quick adaption to new 
requirements that compelled changes to operational processes. Low-value 
shipments, which have exploded with the online shopping revolution,

[[Page 68262]]

have created multiple levels of issues for international trade that 
touch security, health and safety, information collection, timely 
clearance, duty evasion, and facility capacity. The recent 
implementation of the Agreement Between the United States of America, 
the United Mexican States and Canada (the USMCA), which replaced the 
North American Free Trade Agreement (NAFTA), requires a new body of 
knowledge to successfully implement and maintain compliance. The COVID-
19 pandemic has created an unprecedented impact on supply chains and 
trade processing, both in the import and export environments. The 
customs broker is at the heart of these challenges as the agent of the 
importer/exporter to work with CBP to resolve problems and facilitate 
the safe and secure movement of legitimate cargo.
    CBP believes that the vigorous pace and expanding scope of 
international trade require a more stringent continuing education 
framework for those individuals involved in the international trade 
process. Regular continuing education is a professional requirement for 
many dynamic professions, such as the accounting, legal, and medical 
industries. CBP believes that maintaining a high level of 
professionalism of the licensed customs broker is essential for safety, 
security, efficiency, and trade compliance.
    It is in CBP's and the PGAs' interests to have a well-educated 
customs broker community. A customs broker's involvement in a trade 
transaction eases the burden of the government--the customs broker 
takes on the role of educating importers and exporters in the technical 
requirements of filing in the Automated Broker Interface (ABI) and 
informing them of regulatory requirements. While there are some self-
filers, the vast majority of entry filings are completed under the 
purview of customs brokers; and, thus, CBP has a smaller group of 
individuals to train and inform when it comes to revised or new filing 
requirements. Without a well-educated customs broker community, CBP 
would need many more resources to assist in ABI transmissions and 
generally support the trade community with navigating the complex 
import and export requirements; thus, CBP and the PGAs would have to 
change their approach to trade compliance, which would divert limited 
resources away from other critical aspects of the trade mission.
    The trade community also benefits from well-educated customs 
brokers who are aware of current requirements in the dynamic 
environment of international trade. When an importer or exporter 
enlists the services of a customs broker, that customs broker is 
perceived to be knowledgeable of customs laws, regulations, and 
operational processes; however, an importer does not know if the 
customs broker is in fact aware and knowledgeable of all newly emerging 
requirements. A continuing education requirement would provide the 
trade community greater assurance that their agents are knowledgeable 
in the field of customs laws and regulations, familiar with operational 
processes, and are properly exercising their fiduciary 
responsibilities. However, mandating continuing education is just one 
approach to maintaining integrity and professionalism in the broker 
industry; CBP is open to considering other approaches provided by the 
public.
    CBP generally seeks to ensure that all parties in the customs 
broker industry are operating under the current best practices. CBP 
considers customs brokers to be licensed professionals, and as such, 
CBP seeks comment regarding potential professional standards for 
brokers' continuing education, comparable to other licensed 
professionals. This would help maintain a measure of consistency across 
all customs brokers.

D. Recommendations Regarding Continuing Education for Customs Brokers

    In June 2018, the World Customs Organization (WCO) published the 
WCO Customs Brokers Guidelines (available at http://www.wcoomd.org/en/topics/facilitation/instrument-and-tools/tools/wco-customs-brokers-guidelines.aspx). While the WCO cannot mandate that customs authorities 
worldwide follow all protocols or require that certain actions be taken 
by countries, it nevertheless provided the following recommendations in 
this guidance (page 28):

    Customs broker services need to evolve in order to keep pace 
with changing commercial and regulatory environments in the 
international supply chain. Like any other professional service, 
Customs brokers are required to provide added value for their 
customers, whilst supporting Customs/governments in enhancing 
overall compliance with regulatory requirements, making supply 
chains transparent and secure.
    Passing an examination is not a guarantee of continued expertise 
in the long term. To support quality Customs work, those who provide 
Customs broker services either to their employer or clients should 
be required to continue their education and strive to evolve 
professionally. In some jurisdictions, Customs brokers are required 
to participate in regular information sessions or advanced training 
on Customs-focused issues, such as valuation or rules of origin and 
trade agreements.
    Customs administrations, on their own or in partnership with 
private sector bodies, brokers associations and academia, should 
consider providing training support for Customs brokers. They can 
play a significant role in enhancing professional standards of 
Customs brokers by providing training that challenges their acquired 
knowledge and skills (e.g., electronic filing of declarations), 
while also teaching them new relevant knowledge/skills.

    In September 2019, CBP formed the Requirements for Customs Broker 
Continuing Education Task Force (Task Force), and this Task Force was 
placed within the Commercial Customs Operations Advisory Committee 
(COAC) under the Rapid Response Subcommittee. This Task Force is 
comprised of representatives throughout CBP and licensed customs 
brokers from around the country with decades of experience with the 
trade community. Through this Task Force, members provided valuable 
input, advice, and operational perspective. This ANPRM represents the 
outcomes of the deliberations of the Task Force in 2019 and 2020, 
including the potential benefits and challenges of, and alternatives 
to, a continuing education requirement. Prior to the formation of this 
particular Task Force, in 2013, COAC also provided a recommendation 
that DHS issue a regulation requiring that brokers complete a minimum 
of 40 hours of continuing education during a triennial reporting cycle, 
pursuant to CBP's authority under 19 U.S.C. 1641(f), with the proviso 
that there be no accreditation requirements for such continuing 
education (see summary of Recommendation 13010 on CBP's website, at 
https://www.cbp.gov/sites/default/files/assets/documents/2019-Dec/_COAC%20Recommendations%20To%20Date%20010001%20-%20010412.pdf, on page 
9).

III. Discussion of a Potential Framework for Continuing Education for 
Licensed Customs Brokers

    This ANPRM describes a potential framework for mandatory continuing 
education for licensed customs brokers. In the sections below, CBP has 
laid out a series of propositions on various topics, which are followed 
by questions as to which CBP is seeking more information. The comments 
received in response to this ANPRM will be used, potentially, to draft 
a Notice of Proposed Rulemaking (NPRM), which would provide for 
proposed regulations to implement mandatory continuing education 
requirements for licensed customs brokers. All comments are

[[Page 68263]]

welcome, and the most useful comments are those that answer not only 
the specific questions posed in this document, but also provide reasons 
and data in support of any views provided by the commenter, describe 
individual brokers' current practices of updating their knowledge, and 
address how a mandatory continuing education requirement would affect 
them, their company, and their clientele (both in terms of the 
commitment of time and money). CBP is also very interested in receiving 
comments that describe what individual brokers believe would be the 
impact of a continuing education requirement on trade facilitation and 
compliance. For all numerical and quantitative responses, please 
provide CBP with sufficient information to recreate those calculations. 
Finally, in your comments, please refer to the specific question 
number(s) that you are addressing within the various portions of your 
submission.

A. How many hours of continuing education would be required?

    In this ANPRM, CBP is considering the establishment of a framework 
for individual license holders to require the completion of 40 hours of 
continuing education over the course of 3 years. CBP believes that 
substantially more could be too burdensome for the broker industry, 
particularly brokers operating as or working for small businesses. 
However, CBP is concerned that anything less would not be meaningful 
enough for customs brokers to keep up with a dynamic trade environment 
full of changing requirements.\2\
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    \2\ Corporate, association, and partnership licenses would not 
have an additional education component tied to them. Training at the 
company level is already considered in the regulations as part of 
the definition of ``responsible supervision and control'' (19 CFR 
111.1). The qualifier for a corporate, association, or partnership 
license (an individual license holder) would be covered by the new 
education requirement.

    Question 1. Is 40 hours over 3 years an appropriate level of 
continuing education directly related to the import and export of 
goods into and out of the United States? Why or why not? If you 
disagree, please indicate in your answer what would be a preferred 
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level and your rationale.

B. What types of activities should be considered appropriate to qualify 
as continuing education?

    CBP believes that a wide variety of activities should qualify as 
continuing education opportunities to fulfill a mandated requirement. 
Credit could be given to established corporate training, courses 
offered by customs brokers associations, and CBP online webinars. Other 
U.S. government agencies (such as the U.S. Department of Agriculture, 
U.S. Food and Drug Administration, U.S. Environmental Protection 
Agency, and U.S. Consumer Product Safety Commission) routinely offer 
training relevant to customs business, which could be used to fulfill 
the requirement. CBP also hosts the annual CBP Trade Symposium, other 
conferences and national customs brokers association meetings, and 
periodic meetings with the brokers locally at the port level. 
Activities other than those mentioned above, would potentially need 
accreditation before being considered to be approved coursework. For 
specific questions related to the accreditation process, see section I 
below.
    CBP currently conducts hundreds of hours of online webinars 
annually, covering a wide variety of topics--for example on the 
implementation of new regulations, intellectual property rights (IPR), 
specific commodities, valuation, free trade agreements, trade remedies, 
and Automated Commercial Environment (ACE) functionality. These 
webinars are interactive when broadcast (participants ask questions and 
receive live answers) and are recorded and available for download later 
at any time. These webinars are free and available to anyone.\3\ CBP 
believes that through government-provided, online education 
opportunities alone, an individual license holder can obtain 40 hours 
of continuing education over 3 years.
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    \3\ For Office of Trade (OT) webinar postings, see https://www.cbp.gov/trade/stakeholder-engagement/webinars; for ACE training 
videos, see https://www.cbp.gov/trade/ace/training-and-reference-guides.

    Question 1. In addition to the opportunities offered by CBP and 
other government agencies as mentioned above, are you aware of other 
training or coursework that would likely qualify for a continuing 
education requirement? Please describe those opportunities in 
detail.
    Question 1. Are you part of a brokerage or a company that 
employs licensed customs brokers? Please provide or describe any 
training materials or training policies that the company has that 
would likely qualify as continuing education for a licensed customs 
broker. If you do provide any training materials or training 
policies and deem any of the content to be confidential commercial 
information under 6 CFR 5.7, please submit your materials only as a 
written/paper submission as listed in the ADDRESSES section above. 
Please estimate the costs of providing this training on an annual 
basis.
    Question 1. Are you a broker in a small business or do you live/
work in a remote area of the country? Would you be able to avail 
yourself of internet-based training, webinars, or in-person 
trainings offered by a third party in order to meet a mandatory 
training requirement?
    Question 1. Do you believe you would already meet the possible 
continuing education requirement (40 hours over 3 years) based on 
the activities you may be already engaged in that you believe would 
qualify as continuing education?

C. Does all continuing education have to relate to international trade?

    Customs regulations and laws covering the import and export of 
goods are changing constantly all over the world. Given that a licensed 
customs broker is responsible for knowing these rules and regulations 
and ensuring that they are followed, CBP believes that the majority of 
continuing education should focus on laws authorizing CBP operations 
and processes, as well as CBP regulations and programs. The majority 
(75 percent, or 30 of the 40 hours) would focus on customs business and 
CBP operational and process requirements, whereas the remainder (25 
percent, or 10 of the 40 hours) would be available for education that 
could focus on other areas related to international trade that are not 
CBP-specific (such as other government agency requirements).

    Question 1. If a continuing education requirement is 
established, should there be different categories, and if so, how 
should those be weighted? For example, should continuing education 
be categorized as ``CBP procedures and requirements'', ``other 
government agency requirements'', and ``specific areas related to 
international trade'', and should there be a certain number of 
courses within each category that must be taken?

D. Do all brokers need to comply with continuing education 
requirements?

    CBP believes that continuing education requirements should apply to 
all licensed customs brokers, regardless of--
     The length of time a broker has held a license;
     Whether or not a broker is filing entries or otherwise 
conducting customs business; or
     Whether or not a broker is a sole proprietor, an employee 
of a brokerage, or an employee of a company engaged in international 
trade.
    With limited exceptions, the requirements of 19 CFR part 111 apply 
to all licensed customs brokers regardless of their individual 
situations or practices. CBP is not intending to deviate from current 
regulations with this ANPRM. The only differentiation among license 
holders being considered in this ANPRM is whether: (1) The continuing 
education requirement is tied to an individual license holder, not a 
corporate license; and (2) brokers who voluntarily suspend their broker 
license

[[Page 68264]]

would have adjusted requirements (more detail is provided in subsequent 
sections below).

    Question 1. Are there any categories of individuals holding 
licenses whom you feel CBP should exempt from the continuing 
education requirement?

E. How should continuing education be tracked?

    In accordance with 19 CFR 111.30(d)(1), licensed customs brokers 
are required to file a report by February 1 of every third year, in no 
particular form or format. The objective of this triennial report is to 
provide CBP an update regarding the active engagement in transacting 
customs business for each individual or corporate license holder (see 
19 CFR 111.30(d)(2) and (3)). After submission, the triennial report is 
reviewed by Broker Management Branch officials at CBP Headquarters, the 
ports, and the Centers.
    To ensure consistency with the existing regulations and the process 
for providing CBP the triennial report, CBP is not proposing any 
specific format or method for an individual customs broker to track 
continuing education hours. Many companies use software that allows 
their employees to track their training and education and which 
summarizes their training, as needed. Other customs brokers may choose 
to use a simple spreadsheet. As long as the customs broker maintains 
documentation that a customs broker's required continuing education has 
been completed and a customs broker can provide more detail upon CBP's 
request, then brokers would be able to track their education as 
preferred.

    Question 8. If a continuing education requirement were put in 
place, license holders would need to track their hours. Should CBP 
require a certain method for tracking the educational requirements 
and what kind of documentation should CBP require from license 
holders for purposes of verification?

F. How should completed education be reported to CBP?

    CBP is contemplating that an individual customs broker report any 
education over the past 3 years in ACE, concurrently with the 
submission of the triennial report. CBP would then conduct compliance 
activities that would randomly select a certain percentage of customs 
brokers, who would then be asked to provide the full tracking of their 
education. During the 2018 reporting cycle, approximately 85 percent of 
customs brokers submitted their triennial status reports to CBP through 
Pay.gov, when paying the required fees; approximately 15 percent of 
customs brokers submitted their reports to the ports directly. CBP 
anticipates the potential implementation of new ACE technology to 
enable a customs broker to simply check a box in ACE certifying that 
the 3-year continuing education requirement had been successfully 
completed.
    As an example of compliance activities, CBP could determine that 
for a particular reporting cycle, a random sample of 10 percent of 
customs brokers must provide additional documentation to validate that 
sufficient continuing education took place over the past 3 years. The 
customs brokers would then provide CBP with a spreadsheet, a report 
from employee training software, or other documentation available that 
would support the broker's self-certification that the education had 
been completed. As noted above, CBP does not anticipate a specific 
format for tracking continuing education; the only requirement would be 
that it is adequately supportive of the education that the customs 
broker completed and that it could be produced for CBP review upon 
request.

    Question 9. Is self-certification in ACE, while concurrently 
filing the triennial report, the most efficient way for customs 
brokers to report their compliance to CBP with the possible 
continuing education requirement or is there another method for 
reporting preferred? Would enforcement of the continuing education 
requirement by requesting additional documentation from a random 
sample of customs brokers be an appropriate method? Why or why not? 
Are there any other ways of enforcing broker compliance that are 
preferred? If so, why?

G. What happens if continuing education is not reported to CBP?

    CBP is envisioning that the reporting of the continuing education 
occur at the same time as the submission of the customs brokers' 
triennial reports. CBP is considering two options but would like to 
receive other ideas, as well as comments on the two options presented 
below.
    Option 1. The first option is a path of progressive discipline: 
Using increasingly severe measures when a customs broker is given 
reasonable time and opportunity to correct the lack of reporting, but 
does not comply. After the initial failure to report, the customs 
broker would receive a warning letter. If the customs broker does not 
comply with the warning letter, then a suspension of the license would 
be issued, and with continued lack of reporting and compliance, the 
license would be revoked. CBP is considering that a customs broker's 
license would be suspended for a maximum of 120 days, allowing a broker 
to certify and demonstrate that he or she has completed the required 40 
hours of continuing education. After the 120 days, the failure to 
correct the deficiency would result in the customs broker's license 
being revoked by operation of law without prejudice. The notice of the 
revocation would be published in the Federal Register and the Customs 
Bulletin, consistent with CBP's current practice with respect to 
revocations.
    Option 2. The second option would be the application of the process 
currently outlined in 19 CFR 111.30(d)(4) (failure to submit a 
triennial status report) to the reporting of the continuing education 
requirement. Pursuant to that regulation, if a customs broker fails to 
file the report required under 19 CFR 111.30(d)(1) by March 1 of the 
reporting year, then the customs broker's license is suspended by 
operation of law on that date. By March 31 of the reporting year, CBP 
must transmit written notice of the suspension to the customs broker by 
certified mail, return receipt requested, at the address reflected in 
CBP records. If the customs broker files the required report and pays 
the required fee within 60 calendar days of the date of the notice of 
suspension, then the license will be reinstated. If the customs broker 
does not file the required report within that 60-day period, then the 
license is revoked by operation of law without prejudice to the filing 
of an application for a new license. In this scenario, the failure to 
self-certify the completion of the continuing education requirement in 
ACE would have the same impact on an individual customs broker's 
license as the failure to submit the triennial report. Just as with the 
failure to submit the triennial report, the customs broker would 
receive notice by March 31 of the reporting year, with 60 days to 
rectify the issue, and failure to correct the deficiency would result 
in the customs broker's license being revoked by operation of law.
    Whether CBP implements option 1, option 2, or another option 
(perhaps one suggested by a commenter), CBP could request additional 
documentation from a customs broker during a review of triennial 
reporting to assure that the customs broker had met the continuing 
education requirement. If a customs broker could not produce any 
documentation and the evidence showed that the self-certification in 
ACE was false or misleading with respect to any material fact, that 
would be considered a violation of 19 U.S.C. 1641(d)(1)(A). The 
violation could result in a penalty assessment or suspension

[[Page 68265]]

or revocation of a customs broker's license or permit. Unlike the 
situations where a customs broker failed to report or failed to 
complete the continuing education, when the customs broker fails to 
provide the required supporting documentation in response to a request 
from CBP, the customs broker's license would not be revoked by 
operation of law. CBP would have to take additional action to revoke 
the customs broker's license as provided for in subpart D of 19 CFR 
part 111 (Cancellation, Suspension or Revocation of License or Permit, 
and Monetary Penalty in Lieu of Suspension or Revocation).
    Under either option above, or any other suggested option, CBP would 
work with individuals who have temporary or extenuating circumstances 
surrounding their ability to obtain the required education. This is 
current CBP practice with regard to the triennial status report filing, 
and CBP would seek to continue that approach.

    Question 10. What do you think is an appropriate disciplinary 
action for failing to complete a continuing education requirement?
    Question 11. Is linking the reporting of the continuing 
education requirement to the individual license triennial report the 
most efficient way to communicate compliance without placing undue 
burden on customs brokers? If not, what alternative means would you 
recommend and why?
    Question 12. Is 120 days to take corrective action to obtain the 
necessary continuing education credits a reasonable period of time? 
Please explain in your response why you believe the time period 
should be shorter or longer.
    Question 13. What do you think is an appropriate disciplinary 
action for failing to report a customs broker's compliance with a 
continuing education requirement?

H. Should continuing education requirements apply during voluntary 
suspension?

    Under the current regulations, the Executive Assistant 
Commissioner, Office of Trade, may accept a customs broker's written 
voluntary offer of suspension of the customs broker's license or permit 
for a specific period of time under any terms and conditions to which 
the parties may agree (19 CFR 111.52). The most common reasons for 
voluntarily suspending a license are joining the Federal Government or 
the military, moving out of the country for an extended period of time, 
or making a lifestyle change, where a customs broker's license is no 
longer required but may be useful again in the future. During the 
period of voluntary suspension, a customs broker may forgo paying 
applicable fees and providing the triennial status report.
    To parallel existing regulations, CBP is considering that while a 
license is in voluntary suspension, the license holder does not need to 
meet the continuing education requirements. If and when the customs 
broker contacts CBP to reactivate the suspended license, CBP would 
notify the customs broker of the continuing education requirements and 
would provide the timeline and due date for the next round of educating 
and reporting. CBP does not believe that any continuing education 
requirements must be fulfilled prior to the license becoming re-
activated. However, CBP is considering adding a requirement for the 
first year after being re-activated for the customs broker to complete 
a certain number of credits to refresh the knowledge and skill set, 
especially if the customs broker's license was inactive for several 
years.

    Question 14. Should customs brokers with their licenses in 
voluntary suspension be required to meet the continuing education 
mandate while their licenses are in suspension?
    Question 15. Should customs brokers with their licenses in 
voluntary suspension be required to meet the continuing education 
mandate before their licenses can be reactivated?
    Question 16. Should customs brokers, who have been voluntarily 
suspended, be required to complete a certain number of continuing 
education credits the first year after re-activation, and if so, how 
many?
    Question 17. Should CBP differentiate the reactivation 
requirements based on the nature of the suspension, i.e., a 
voluntary suspension versus involuntary suspension? If so, how, and 
why?

I. What could the accreditation process look like?

    CBP is contemplating a framework for providing continuing education 
where all Federal Government-provided content directly relevant to 
customs business, import, and export (training limited to requirements 
that CBP administers and/or enforces) would automatically be deemed 
appropriate and acceptable towards meeting the 3-year requirement. Due 
to resource constraints, CBP is not currently in a position to accredit 
education opportunities offered by private-sector entities. Those 
education opportunities could be provided by an accredited entity. This 
potential accreditation process would ensure that quality training is 
provided and accounted for, and provide a structure where a set of 
objective standards is applied equally across those entities that would 
like to offer education opportunities to customs brokers. 
Notwithstanding the above suggestion for an accreditation process, CBP 
is open to receiving comments whether it should allow for more 
flexibility and not place any restrictions or requirements on the 
accreditation of continuing education.

    Question 18. Should informational content that CBP currently 
provides (webinars, local and national events, industry trade days, 
etc.) automatically be considered eligible for credit toward a 
mandatory education requirement?
    Question 19. Should CBP require accreditation? Why or why not? 
If yes, should CBP create a framework to accredit education provided 
by non-government entities?
    Question 20. Would an established accreditation process help 
control the quality of the content of the various activities that 
would be eligible for continued education credit?

    CBP would likely approach selecting accreditors through a Request 
for Information (RFI) in the manner it currently conducts procurement 
activities, using the System for Award Management (SAM, https://sam.gov/SAM/). SAM is a U.S. government website and there is no cost 
for any entity to use the system. Through SAM, any entity can register 
to do business with the U.S. government, update or renew an entity's 
registration, check the status of an entity registration, and search 
for any entity registration and exclusion records.
    In addition to issuing an RFI, CBP would publish a notice in the 
Federal Register detailing the application process. Unlike a CBP 
acquisition, a monetary contract would not be awarded; rather, the 
contract would be an agreement between CBP and the selected accreditor 
to provide specific services over a designated period of time. The 
accreditor would be able to charge third parties for its services, to 
the extent allowed by law, to recoup its expenses to review and 
approve/deny course credit for proposed content submitted to the 
accreditor for consideration. CBP is contemplating a 3-year approval 
cycle for accreditors of continuing education. In advance of the next 
3-year period, CBP would conduct another notice and selection activity 
to choose the next cycle of approved accreditors. CBP believes the 
contemplated approach would lead to the following benefits:
    (1) More than one approved accreditor, which would allow for 
competition and keep costs at market level without creating a monopoly;
    (2) An open and transparent application process; and,
    (3) An opportunity for small businesses and non-profit 
organizations to become approved accreditors.

    Question 21. Should CBP pursue a formal accreditation program 
with a third-party

[[Page 68266]]

accreditor, or should CBP be the accrediting party?

    Based on conversations with industry experts, CBP believes that 5-
10 entities would apply to CBP to become approved accreditors for 
continuing education. At this time, CBP is not proposing a floor or a 
ceiling to the number of accreditors it intends to approve. Any such 
limits, were they deemed necessary at a later date, would be announced 
in the Federal Register notice detailing the application process, as 
described above.

    Question 22. How many entities should be approved to accredit 
content for a continuing education requirement (providing a range is 
acceptable)? Please provide details on your perspective.

    The precise criteria for how applicants would be evaluated could be 
added in a regulation. Application instructions would be provided in a 
Federal Register notice. In general, CBP is suggesting that criteria 
for the entity submitting an application be similar to other government 
procurements, such as:
     At least one key official in the entity must have a 
customs broker's license;
     A demonstrated knowledge of international trade laws, 
regulations, and customs business for goods both imported into and 
exported from the United States;
     A demonstrated knowledge of other government agencies that 
are involved in transactions of international trade;
     A list of professional references;
     Resumes for the key personnel who would be involved in 
accrediting course work;
     A description of the process for how someone would submit 
his or her activity proposed for credit to the accreditor, including 
electronic and online methods for submitting materials for 
consideration;
     A description of the criteria the accreditor would use to 
approve/deny activities and courses for continuing education credit;
     A description of how the accreditor would avoid conflicts 
of interest;
     A description of how the accreditor would track 
accreditation activity for CBP review;
     A description of how customers can provide feedback to the 
accreditor and CBP on the approval process;
     An estimate of the ``turn around'' time for approving/
denying activities under consideration for accreditation;
     An estimate of the charge, if any, for approving/denying 
an activity under consideration for accreditation.

    Question 23. Is the above list of criteria to become an approved 
accreditor of continuing education reasonable? Should additional 
criteria be added?
    Question 24. If your company or organization is interested in 
becoming an approved accreditor, can you estimate the time it would 
take to put together an application based on the above criteria? If 
you or your organization deem this information business sensitive, 
please submit your materials only as a written/paper submission as 
listed in the ADDRESSES section above.

    To avoid any perceived conflicts of interest, CBP is contemplating 
that any entity that is approved by CBP to provide continuing education 
should not be allowed to self-approve its own course content and 
activities. The entity would have to submit the proposed activity to 
one of the other accreditors for approval or denial of that activity. 
CBP believes this potential process provides the fairest approach for 
both content creators and accreditors.

    Question 25. Should accreditors be able to self-approve their 
own activities and course content?

    At this time, CBP is not proposing that applicants to become 
accreditors submit an application fee. If CBP determines that an 
application fee is necessary to re-coup the costs of proposal review, 
then CBP would propose the relevant regulations in a future NPRM and 
provide a justification for the fee to be charged.

    Question 26. Should CBP charge a fee to entities who wish to 
apply to become approved accreditors?

    Each accreditor would make clear on its website and in other 
materials the process for submitting content for accreditation 
consideration (note that this is one of the criteria that must be met 
to receive CBP approval to be an accrediting body). CBP is requiring 
that an accreditor provide an electronic means for a content provider 
to submit the details of the activity under consideration. The 
accreditor must also make clear on its website the average or typical 
timeframe the content provider can expect before receiving an approval 
or a rejection.
    CBP is not proposing to set the cost of what an accreditor would 
charge to review and approve/deny activities for continuing education. 
The accreditor would have to make any charge explicit and clear during 
the application for course approval.

    Question 27. Should CBP set a limit on the amount an accreditor 
can charge for course/activity approval?

    Once an accreditor has been approved under a 3-year agreement, it 
may become necessary over the course of time to reconsider the 
suitability of an accreditor to provide services. The terms of the 
agreement would be written in a way that both CBP and the accreditor 
independently have the ability to end the agreement with a 30-day 
notice. This approach parallels the process for CBP monetary contracts.
    Any individual or organization would be able apply to become an 
approved accreditor during the application process that CBP considers 
opening on a 3-year cycle. Any additional accreditors outside of the 3-
year cycle would not be considered.

    Question 28. Given all the considerations raised above and the 
various questions posed regarding a potential framework for 
continuing education, CBP would like comments on whether continuing 
education should be required at all, and whether there are other 
measures that CBP could take to ensure a high level of integrity and 
expertise in the broker community.

IV. Economic Impacts of Mandating Continuing Education for Licensed 
Customs Brokers

    Executive Orders 13563 and 12866 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This ANPRM is not a ``significant regulatory action,'' 
under section 3(f) of Executive Order 12866, and has not been reviewed 
by the Office of Management and Budget (OMB) under that order.
    A future regulatory framework to implement continuing education 
requirements would affect those customs brokers maintaining active 
licenses so that they may transact customs business, as well as any 
brokers re-activating their licenses after a period of voluntary 
suspension. In addition to attendance at trainings, customs brokers 
would need to track continuing education credits. Providers of customs-
related trainings would also be affected, as they would likely see a 
rise in demand for training and would need to have their offerings 
accredited by an acceptable organization.
    There are currently several accreditors for customs-related 
trainings, although those organizations operate entirely independently 
from CBP and have neither sought, nor received, CBP approval. Should 
continuing education become mandatory, more entities would

[[Page 68267]]

likely seek to become accreditors. Both existing and new accreditors 
would need to go through the CBP accreditor application process, 
described above, in order to provide accreditation and accredited 
training products. Employers of licensed customs brokers likely would 
either provide accredited training by going through the accreditation 
process for in-house trainings, or provide employees with the time and 
resources to fulfill training requirements on their own. Finally, CBP 
would need to provide a process by which organizations may become 
accreditors and track broker reporting to ensure continuing education 
requirements are being met.
    As of January 2020, there are approximately 10,000 individually 
licensed customs brokers. Details are provided in Table 1 below.

   Table 1--Employment Type for Individually Licensed Customs Brokers
------------------------------------------------------------------------
                 Individual broker type                       Number
------------------------------------------------------------------------
Individually Licensed Brokers...........................          10,089
Not transacting customs business........................           5,447
Employee................................................           3,695
Proprietor (individual or organization).................             561
Transact customs business, not as an employee or                     386
 Proprietor.............................................
------------------------------------------------------------------------
Source: Triennial report data as filed in ACE; data current as of
  January 2020.

A. Costs and Benefits of a Future Rule

    The addition of continuing education to the requirements for 
maintaining a customs broker license may produce new costs for some 
brokers, particularly smaller brokerages. However, many customs brokers 
already pursue additional training and continuing education and may 
already be meeting the potential requirements. To determine the net 
cost or benefit of mandatory continuing education, CBP seeks comments 
on the following areas:

    Question 29. To what extent do you as a customs broker or 
employer of brokers already satisfy the potential requirements (40 
hours over 3 years) voluntarily or via company policy? Do you 
believe this is representative of the customs broker industry as a 
whole? Why or why not? Please provide examples of how you already 
fulfill the potential requirements.
    Question 30. What is the number of hours currently spent on 
training in total by you as a customs broker or by customs brokers 
employed by you in an average year?
    Question 31. Of the existing training options for customs 
brokers, how many hours are supplied in-house by employers of 
customs brokers, externally by Federal Government agencies, and by 
third-party providers, in an average year? What types of training 
options are you as a customs broker taking advantage of?
    Question 32. Is the training for customs brokers that you 
provide or consume general, specific to a particular topic, or does 
it vary depending on the current work environment?
    Question 33. Are the trainings for customs brokers that are 
currently provided accredited by some organization? If so, please 
provide the names of the organizations that accredit the trainings.
    Question 34. Do employers and employees find these trainings for 
customs brokers to be beneficial? If yes, can you provide any 
examples of when training may have prevented or mitigated a negative 
outcome in a trade process? If no, can you explain how you as a 
customs broker or employer of customs brokers currently keep abreast 
of the ever-changing and expanding requirements to comply with U.S. 
and international law and other knowledge to stay efficient and 
compliant over time?
    Question 35. If you are an employer of customs brokers, and the 
continuing education requirement were to be put in place, would you 
continue your current approach to education or make changes? If you 
would change, please explain the changes you might make and if you 
would increase or decrease the use of in-house, third-party, or 
Federal Government-produced sources of training?
    Question 36. How often do you as a customs broker or employer of 
customs brokers currently attend events requiring travel, and how 
would a possible continuing education requirement affect the amount 
of travel, for you or your company?
    Question 37. Can you provide information on the benefits and 
efficacy of mandatory continuing education for customs brokers and 
free trainings provided by CBP and other PGAs?
    Question 38. In general, how often do you as a customs broker or 
your customs broker employees take advantage of these government-
provided training resources?
    Question 39. If you are considered a small business, what would 
the impacts be to your company of the potential continuing education 
framework for customs brokers?
    Question 40. Should small businesses that struggle to meet 
continuing education requirements for customs brokers, due to new 
costs, receive accommodations in the form of discounts or 
exemptions?
    Question 41. What types of costs do you or your company incur to 
maintain records of the completion of employee trainings? How high 
are these costs? If you or your company does not currently maintain 
training records, what types of costs would you incur to do so?
    Question 42. If you are an individually-licensed customs broker, 
what would you consider reasonable costs per hour of continuing 
education, if you had to pay out of your own pocket? Would you take 
more trainings if the cost were discounted for small businesses?

B. Potential Costs of a Future Rule

    With continuing education requirements in place, customs brokers 
would face new costs. Those customs brokers already taking part in a 
continuing education program may see increased costs if they must 
increase the amount of training they participate in, or if they must 
switch to different, more expensive training opportunities because 
their current programs are not accredited. Customs brokers (or their 
employers) would need to pay tuition and fees, and spend time 
registering and preparing for, as well as attending trainings. 
Depending on the type of training, customs brokers (or their employers) 
may pay expenses related to travel and overnight trips including 
hotels, rental cars, and meals. To meet requirements, customs brokers 
would need to track and report completed trainings, which may require 
new systems or software, though most customs brokers would likely use 
existing spreadsheet or database applications. Employers may also 
choose to satisfy requirements by paying to produce training in-house, 
which would need to be accredited by a CBP-approved organization.
    Accrediting organizations would need to go through some type of 
application process to receive CBP approval to accredit trainings. That 
application would require time to prepare and submit. CBP would face 
the costs of creating and providing the accreditor-approval process. 
CBP may also need to increase the number of trainings it offers (though 
as noted above, this is not likely), which would result in increased 
costs. Finally, CBP would face increased costs of enforcement, likely 
in the form of more frequent or more thorough audits of customs 
brokers' records.

    Question 43. Are there any additional qualitative costs, 
monetary costs, or time expenditures of continuing education for 
customs brokers that you would like to provide?

C. Potential Benefits of a Future Rule

    The addition of mandatory continuing education to the requirements 
for maintaining an individual customs broker license would have several 
benefits. A better educated and more informed workforce would be more 
prepared for the dynamic and complex trade environment. The customs 
broker industry as a whole would likely see improvements in 
professionalism and reputation. Customs brokers would likely need to 
spend less time asking questions of CBP and would commit fewer 
unintentional errors and violations. CBP would benefit as well, with 
fewer errors, issues, and violations to address. Importers, exporters, 
and other members of the international trade community would experience 
greater

[[Page 68268]]

professionalism from their customs brokers, need to handle fewer 
mistakes, and likely see increases in efficiency. Accreditors would 
likely see benefits in the form of increased demand for their services 
and the profits thereof.

    Question 44. Are there any additional qualitative benefits, 
monetary cost savings, or time savings of continuing education for 
customs brokers that you would like to provide, in addition to the 
benefits described in the Background section above?

IV. Signature

    The Acting Secretary of Homeland Security, Chad F. Wolf, having 
reviewed and approved this document, has delegated the authority to 
electronically sign this document to Chad R. Mizelle, who is the Senior 
Official Performing the Duties of the General Counsel for DHS, for 
purposes of publication in the Federal Register.

Chad R. Mizelle,
Senior Official Performing the Duties of the General Counsel, 
Department of Homeland Security.
[FR Doc. 2020-22604 Filed 10-27-20; 8:45 am]
BILLING CODE 9111-14-P