[Federal Register Volume 86, Number 173 (Friday, September 10, 2021)]
[Proposed Rules]
[Pages 50794-50827]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19013]
[[Page 50793]]
Vol. 86
Friday,
No. 173
September 10, 2021
Part II
Department of Homeland Security
-----------------------------------------------------------------------
U.S. Customs and Border Protection
-----------------------------------------------------------------------
19 CFR Part 111
Continuing Education for Licensed Customs Brokers; Proposed Rule
Federal Register / Vol. 86, No. 173 / Friday, September 10, 2021 /
Proposed Rules
[[Page 50794]]
-----------------------------------------------------------------------
DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
19 CFR Part 111
[Docket No. USCBP-2021-0030]
RIN 1651-AB03
Continuing Education for Licensed Customs Brokers
AGENCY: U.S. Customs and Border Protection, Department of Homeland
Security.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: This document proposes to amend the U.S. Customs and Border
Protection (CBP) regulations to require continuing education for
individual customs broker license holders (individual brokers) and to
create a framework for administering this requirement. By requiring
individual brokers to remain knowledgeable about recent developments in
customs and related laws as well as international trade and supply
chains, CBP's proposed framework would enhance professionalism and
competency within the customs broker community. CBP has determined that
the proposed framework would contribute to increased trade compliance
and better protection of the revenue of the United States.
DATES: Comments must be received on or before November 9, 2021.
ADDRESSES: You may submit comments, identified by docket number, by one
of the following methods:
Federal eRulemaking Portal at https://www.regulations.gov.
Follow the instructions for submitting comments via Docket No. USCBP
2021-0030.
Mail: Due to COVID-19-related restrictions, CBP has
temporarily suspended its ability to receive public comments by mail.
Instructions: All submissions received must include the agency name
and docket number for this rulemaking. All comments received will be
posted without change to https://www.regulations.gov, including any
personal information provided. 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 https://www.regulations.gov. Due to the
relevant COVID-19-related restrictions, CBP has temporarily suspended
its on-site public inspections of the public comments.
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]; and, Melba Hubbard, Chief,
Broker Management Branch, Trade Policy and Programs, Office of Trade,
U.S. Customs and Border Protection, at (202) 325-6986,
[email protected].
SUPPLEMENTARY INFORMATION:
I. Public Participation
Interested persons are invited to participate in this rulemaking by
submitting written data, views, or arguments on all aspects of the
proposed rule. CBP also invites comments that relate to the economic,
environmental, or federalism effects that might result from this
proposed rulemaking. Comments that will provide the most assistance to
CBP will reference a specific portion of the proposed rulemaking,
explain the reason for any recommended change, and include data,
information, or authority that support such recommended change. See
ADDRESSES above for information on how to submit comments.
II. Executive Summary
This notice of proposed rulemaking (NPRM) proposes to amend the
U.S. Customs and Border Protection (CBP) regulations to require
individual customs broker license holders (individual brokers) to
participate in continuing education activities (hereinafter, referred
to as the ``continuing broker education requirement'') and to create a
framework for administering this requirement. This section provides a
brief summary of the proposed framework. A more detailed description of
the proposed framework is contained in section IV of this NPRM.
This NPRM proposes to require individual brokers to complete at
least 36 continuing education credits per triennial period, with
limited exceptions. Individual brokers reentering the profession
following a period of voluntary suspension would be subject to a
prorated requirement of one continuing education credit for each
complete remaining month until the end of the triennial period. The
proposed framework also exempts two groups of individual brokers from
the continuing broker education requirement--namely, individual brokers
who have voluntarily suspended their license in accordance with Sec.
111.52 of title 19 of the Code of Federal Regulations (19 CFR 111.52),
and individual brokers who have not held their license for an entire
triennial period at the time of the submission of the status report as
required under 19 CFR 111.30(d).
Under the proposed framework, individual brokers could earn
continuing education credits for a variety of training or educational
activities, whether in-person or online, including the completion of
coursework, seminars, workshops, symposia, or conventions, and, subject
to certain limitations and requirements, the preparation and
presentation of subject matter as an instructor, discussion leader, or
speaker. Individual brokers would report and certify their compliance
with the continuing broker education requirement upon the submission of
the status report required under 19 CFR 111.30(d), which is due on a
triennial basis.
In order to ensure compliance with the continuing broker education
requirement, this NPRM also proposes regulatory provisions authorizing
CBP to take disciplinary actions, if an individual broker submits a
triennial report but fails to report and certify his or her compliance
with the continuing broker education requirement on the triennial
report. The proposed framework also includes provisions addressing
other aspects of the administration of the continuing broker education
requirement, such as accreditation and the selection of accreditors.
III. Background
A. Authority for Continuing Broker Education Requirement
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 customs 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 U.S. Department of the
Treasury (Treasury) to prescribe rules and regulations relating to the
customs
[[Page 50795]]
business of brokers as may be necessary to protect importers and the
revenue of the United States and to carry out the other provisions of
section 641. See 19 U.S.C. 1641(f). That authority was transferred to
the Secretary of the U.S. Department of Homeland Security (DHS) as a
result of the enactment of the Homeland Security Act of 2002 (Pub. L.
107-296, 116 Stat. 2142). The Homeland Security Act of 2002 generally
transferred the functions of the former U.S. Customs Service from the
Secretary of the Treasury to the Secretary of DHS, and provided that
the Secretary of the Treasury retains authority over customs revenue
functions, unless specifically delegated to the Secretary of DHS. See 6
U.S.C. 212(a)(1). Paragraph 1(a)(i) of Treasury Department Order No.
100-16 contains a list of subject matters over which the Secretary of
the Treasury retained authority. See appendix to 19 CFR part 0. The
other functions of the former U.S. Customs Service not expressly listed
in paragraph 1(a)(i) of Treasury Department Order No. 100-16 were
transferred from the Secretary of the Treasury to the Secretary of DHS.
As paragraph 1(a)(i) of Treasury Department Order No. 100-16 does not
list the regulation of customs brokers, the Secretary of the Treasury
did not retain authority over this subject matter. Accordingly, the
Secretary of DHS is authorized 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 other provisions of section 641. See 19 U.S.C. 1641(f).
19 U.S.C. 1641(b)(4) imposes upon customs brokers the duty to
exercise responsible supervision and control over the broker's
employees and control over the customs business that is conducted. The
statute also permits the Secretary of DHS to test persons for their
knowledge of customs and related laws prior to issuing a license.
Furthermore, based upon 19 U.S.C. 1641, CBP has promulgated regulations
setting forth additional obligations of customs brokers pertinent to
the conduct of their customs business. CBP believes that maintaining
current knowledge of customs laws and procedures is essential for
customs brokers to meet their legal duties. CBP proposes that requiring
a customs broker to fulfill a continuing education requirement is the
most effective means to ensure that the customs broker keeps up with an
ever-changing customs practice after passing the broker exam and
subsequent receipt of the license. CBP believes that 19 U.S.C. 1641
provides authority to require, by regulation, continuing education for
individual brokers.
To enhance professionalism and competency within the customs broker
community, CBP proposes to promulgate regulations to require continuing
education for individual brokers and to create a framework for
administering this requirement. CBP believes that requiring individual
brokers to participate in continuing education activities would enhance
the credibility and value of a customs broker's license and improve a
broker's skills, performance, and productivity. This in turn would
increase client service and compliance with customs laws, which would
better protect the revenue of the United States.
B. Overview of Licensing Requirements for Individual Customs Brokers
CBP is responsible for administering the licensing requirements for
customs brokers. See 19 CFR part 111, subpart B. A prospective customs
broker must pass a broker exam administered 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 the
broker's clientele.
After an applicant passes the customs broker exam, CBP will
investigate whether the 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, then 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 filing of reports and notifications to CBP as set forth
in 19 CFR 111.30. Pursuant to 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. See also 19 CFR
111.1 and 111.28(a). A customs broker also has other legal obligations,
to CBP and to the broker's clientele, including, but not limited to,
the exercising of due diligence in making financial settlements,
answering correspondence, and preparing paperwork or filings related to
customs business. See 19 CFR 111.29(a).
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
(hereinafter, referred to as ``customs matters''), the broker exam is,
by necessity, limited in scope. The broker exam only assesses a
person's knowledge of the state of the customs and related laws at a
certain point in time. The broker exam does not test for knowledge of
any of the requirements of the more than 40 Partner Government Agencies
(PGAs) \1\ involved in regulating imports. The complex nature of trade
and the ever-changing and expanding requirements to comply with U.S.
and international law requires that a customs broker maintain a high
level of functional and accessible knowledge to ensure that a broker's
clients remain compliant with the applicable laws over time. CBP
proposes that requiring a customs broker to fulfill a continuing
education requirement is the most effective way to ensure that
individual customs brokers keep abreast of changes in customs and
related laws, which is especially important because of the constant
evolution of international trade and supply chains. CBP is proposing
that, once individuals become licensed customs brokers, they must
maintain sufficient knowledge of customs and related laws necessary to
render valuable service to importers and drawback claimants through the
completion of continuing education. CBP believes this will result in
more competent licensed customs brokers who are well educated in
customs law, regulations, and critical subject matter. A more competent
customs broker community will prevent costly errors for their clients,
potentially saving importers and drawback claimants from unwanted
problems and relieving CBP from expending valuable examination and
collection resources. The proposed regulations will create a framework
for continuing broker education that would contribute to increased
trade compliance and better protection of the revenue of the United
States.
---------------------------------------------------------------------------
\1\ CBP enforces over 400 laws on behalf of over 40 other U.S.
Government agencies, which are commonly referred to as Partner
Government Agencies (PGAs).
---------------------------------------------------------------------------
C. Assessment of Compliance Risks Managed by Customs Brokers in the
Complex and Evolving Realm of International Trade
Recent developments have demonstrated the need for key parties
involved in importing and claiming drawback to keep up-to-date on
training and continuously build and maintain their knowledge of current
[[Page 50796]]
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 involved in international trade--particularly, customs brokers
serving as the fiduciary agents of the affected importers and drawback
claimants--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 is fully
manufactured or produced.
The past several years, in particular, have posed challenges for
both CBP and entities involved in international trade, requiring quick
adaption to new requirements that compelled changes to operational
processes. Low-value shipments (19 U.S.C. 1321(a)(2)(C)), the volume of
which has exploded with the increase in the de minimis limit from $200
to $800 as a result of section 901(c) of TFTEA and the online shopping
revolution, have created multiple levels of issues for international
trade that implicate security, health, safety, information collection,
timely clearance, and duty evasion. The 2020 statutory 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. See United States-
Mexico-Canada Agreement Implementation Act, Public Law 116-113, 134
Stat. 11 (19 U.S.C. Chapter 29). The ongoing COVID-19 pandemic created
an unprecedented impact on supply chains and international trade
processes.
The customs broker is at the heart of the aforementioned
challenges, as the agent of the importer/drawback claimant who works
with CBP to resolve problems and facilitate the safe and secure
movement of legitimate cargo. CBP believes that the complex and
evolving nature of international trade requires a mandatory continuing
education framework for individual brokers involved in these trade
processes. Simply relying on self-initiated efforts to maintain current
knowledge is insufficient to ensure compliance with the wide array of
applicable and evolving laws that is necessary to protect the revenue
of the United States. Brokers who were assessed penalties by CBP
between 2017 and 2020 have held their individual broker license for, on
average, 37 years. In contrast, the average individual customs broker
license has been held for just 24 years. This suggests that as more
time passes since the passing of the customs broker exam, more errors
are made. Additionally, as addressed in greater detail in section V.A.
of this NPRM, which pertains to the requirements of Executive Orders
13563 and 12866, CBP has seen a recent increase in penalties while data
indicates that companies employing individual brokers who voluntarily
pursue continuing education in the form of industry certifications
generally commit fewer errors.
Regular continuing education is a professional requirement for many
dynamic professions, such as in the accounting, legal, and medical
industries. The Internal Revenue Service (IRS), for example, has
regulations covering tax professionals that include both an examination
and a continuing education requirement. See 31 CFR part 10. These
regulations were based, in part, on the Return Preparer Review report
(January 4, 2010), which recommended continuing education for tax
preparers to ``better leverage the tax return preparer community with
the twin goals of increasing taxpayer compliance and ensuring uniform
and high ethical standards of conduct for tax preparers.'' \2\ The IRS
serves as the primary revenue collector of the U.S. Government and has
a responsibility for protecting the revenue of the United States.
Similarly, CBP is the second largest collector of revenue in the
federal government, in the form of duties, taxes, and fees for imported
merchandise, and likewise has a responsibility for protecting the
revenue of the United States.
---------------------------------------------------------------------------
\2\ Internal Revenue Service, U.S. Department of the Treasury,
Return Preparer Review, IRS Publication No. 4832 (January 4, 2010),
available at https://www.irs.gov/pub/irs-news/fs-10-01.pdf.
---------------------------------------------------------------------------
As CBP licenses customs brokers to conduct customs business, it is
in the best interests of CBP and the PGAs to have a well-educated
customs broker community. A customs broker's involvement in import and/
or drawback transactions eases the burden of the government; the
customs broker takes on a large part of the role of educating importers
and drawback claimants on the technical requirements of filing in the
Automated Broker Interface (ABI) \3\ and informing them of regulatory
requirements for the customs transactions in which they are involved.
While there are some self-filers, the vast majority of entries of
imported merchandise are filed by customs brokers on behalf of the
importers of record. This dynamic generally allows CBP to target a
smaller group of individuals when managing trade compliance for revised
or new filing requirements. Thus, a customs broker community that
continues to stay abreast of changes in the customs practice helps
support CBP's crucial work. As the quality of such brokerage services
suffers, this would cause CBP to expend additional resources to assist
entities involved in international trade with navigating complex import
and drawback requirements, which diverts limited resources away from
other critical aspects of CBP's trade mission. To ameliorate that
consequence, CBP proposes to require customs brokers to maintain their
knowledge and skills through the completion of continuing customs
broker education.
---------------------------------------------------------------------------
\3\ The Automated Broker Interface (ABI) is an electronic data
interchange that allows brokers and entry filers (self-filers) to
transmit immediate delivery, entry, and entry summary data
electronically to, and receive electronic messaging from, CBP in the
Automated Commercial Environment (ACE). See 19 CFR 143.1 and
143.32(a).
---------------------------------------------------------------------------
Importers and drawback claimants also benefit from well-educated
customs brokers who are aware of current requirements in the complex
and evolving realm of international trade. When an importer or drawback
claimant 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 or drawback claimant does
not know with certainty that the customs broker is in fact
knowledgeable of all newly emerging requirements. The continuing broker
education requirement would provide importers and drawback claimants
with greater assurance that their agents are knowledgeable of customs
laws and regulations, familiar with operational processes, and can
properly exercise a broker's fiduciary duties.
In recent years, the need for continuing broker education has also
attracted the attention of international intergovernmental
organizations, such as the World Customs Organization
[[Page 50797]]
(WCO). In 2018, the WCO published the WCO Customs Brokers Guidelines,
which is a guidance document wherein the WCO recognizes the need for
mandatory continuing education for customs brokers.\4\ In the guidance
document, the WCO notes that the passing of an initial broker exam does
not ensure that customs brokers stay abreast of changes in customs and
related laws and recommends that, on their own or in partnership with
other governmental, private, or non-profit organizations, customs
administrations should take on an active role in educating the customs
broker community about changes in customs and related laws and
reinforcing existing knowledge.\5\ Additionally, in the guidance
document, the WCO notes that some countries already require customs
brokers to complete continuing education.\6\ Accordingly, in proposing
to require individual brokers to complete continuing education, this
NPRM is generally in line with the WCO's recommendations on best
practices for customs administrations.
---------------------------------------------------------------------------
\4\ World Customs Organization, WCO Customs Brokers Guidelines,
at 28 (June 2018), available at http://www.wcoomd.org/en/topics/facilitation/instrument-and-tools/tools/wco-customs-brokers-guidelines.aspx.
\5\ Id.
\6\ Id.
---------------------------------------------------------------------------
D. Development of the Proposed Continuing Broker Education Requirement
In recent years, the importance of continuing broker education has
received attention on a domestic level. In 2013, the predecessor to the
Commercial Customs Operations Advisory Committee (COAC) \7\ recommended
that DHS issue regulations requiring customs brokers to 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),
on the condition that there be no accreditation requirements for such
continuing education.\8\
---------------------------------------------------------------------------
\7\ COAC is jointly appointed by the Secretary of the Treasury
and the Secretary of DHS and advises the Secretary of the Treasury
and the Secretary of Homeland Security on all matters involving the
commercial operations of CBP. Meetings of COAC are presided over
jointly by the Deputy Assistant Secretary for Tax, Trade, and Tariff
Policy of the Department of Treasury and Commissioner of CBP. See
section 109 of TFTEA.
\8\ For a list of COAC recommendations that were considered open
as of April 27, 2016, see Commercial Customs Operations Advisory
Committee, Term to Date Recommendations: Trade Modernization
Subcommittee, Recommendation Nos. 10046-10047 (April 27, 2016),
available at https://www.cbp.gov/sites/default/files/assets/documents/2019-Dec/_COAC%20Recommendations%20To%20Date%20010001%20-%20010412.pdf.
---------------------------------------------------------------------------
In September 2019, CBP formed the Requirements for Customs Broker
Continuing Education Task Force (Task Force), which was placed within
COAC under the Rapid Response Subcommittee. The objective was to
develop a proposed framework for continuing education for individual
brokers. This Task Force was comprised of representatives throughout
CBP and licensed customs brokers from around the country with decades
of experience with international trade. Through this Task Force,
members provided valuable input, advice, and operational perspectives.
In conjunction with the work of the Task Force and a previous COAC
recommendation,\9\ CBP published an advance notice of proposed
rulemaking (ANPRM) in the Federal Register (85 FR 68260) on October 28,
2020. The ANPRM announced that CBP was considering the adoption of a
continuing education requirement for licensed customs brokers. The
ANPRM solicited comments on the tentative framework developed by the
Task Force for purposes of gathering further information and data from
the broader customs broker community. This request for information and
data assisted CBP in considering whether, and if so what type of,
requirements would contribute to increased trade compliance. The ANPRM
solicited comments on the following issues:
---------------------------------------------------------------------------
\9\ See id.
---------------------------------------------------------------------------
The number of hours of continuing education that customs
brokers should be required to complete;
The customs broker license holders who should be required
to complete continuing education (including license holders who should
be exempt from the requirement or required to complete fewer hours of
continuing education);
The types of training, coursework, or other educational
activities that should qualify for continuing education credit;
The manner in which qualifying continuing broker education
should be provided (online or in-person);
Whether subject-matter-specific education requirements
should be imposed;
How compliance with the continuing broker education
requirement should be reported to CBP;
What recordkeeping obligations should exist for the
purpose of the continuing broker education requirement;
What disciplinary actions should be taken if customs
brokers fail to report their compliance with the continuing broker
education requirement to CBP, or, in the alternative, fail to satisfy
the continuing broker education requirement;
What disciplinary actions should result from the
submission of false or misleading information in association with the
continuing broker education requirement;
Whether disciplinary actions should be taken immediately
upon a customs broker's failure to report compliance with the
continuing broker education requirement, or whether customs brokers
should be provided with an opportunity to take corrective actions,
including the length of such period;
Whether there should be an accreditation process to
control the quality of the content of the various educational
activities (including how such an accreditation process should be
administered, how accreditors should be selected, and whether
educational activities offered through certain content providers should
automatically qualify for continuing education credit);
The types of training, coursework, or educational
activities that customs brokers already complete on a regular basis;
How often customs brokers currently participate in
continuing education;
The costs customs brokers would anticipate to incur as a
result of the implementation of a continuing broker education
requirement; and
The benefits customs brokers would anticipate as a result
of the implementation of a continuing broker education requirement.
The ANPRM provided for a 60-day public comment period, which closed
on December 28, 2020. During the 60-day public comment period, CBP
received 29 comments.\10\ Of the 29 submissions, 23 submissions were
generally supportive of the implementation of a continuing education
requirement and 5 submissions were not supportive of the adoption of a
continuing education requirement. One submission consisted of a
question, and, thus, neither expressed the commenter's support of or
opposition to a continuing education requirement.
---------------------------------------------------------------------------
\10\ The public comments can be viewed in their entirety on the
public docket for the ANPRM, Docket No. USCBP 2020-0042, which can
be accessed through https://www.regulations.gov.
---------------------------------------------------------------------------
In developing this NPRM, CBP carefully considered all public
comments submitted in response to the ANPRM. Below are summaries of
comments on topics that received the most attention and short
descriptions of
[[Page 50798]]
how they affected the formulation of the framework proposed in this
NPRM. CBP will provide more detailed descriptions of the comments and
responses to the issues raised therein when responding to the comments
received for this NPRM.
1. Required Number of Hours of Continuing Education
Seven commenters recommended that CBP require customs brokers to
complete, at a maximum, 36 hours of continuing broker education every
three years, rather than the 40 hours of continuing broker education
per triennial period that was considered in the ANPRM. CBP believes
that requiring individual brokers to complete on average one hour of
continuing education per month will make it easier for individual
brokers to plan their continuing education. Continuing education
requirements of one hour of continuing education per month have been
adopted for many other professions.\11\ CBP also believes that
requiring more than 36 hours of continuing broker education per
triennial period could be burdensome for the customs broker community
(especially individual brokers operating as or working for small
businesses) and a lower requirement would be insufficient to ensure
that individual brokers keep abreast of changes in customs and related
laws. Accordingly, CBP has adopted the commenters' suggestion in this
NPRM and is proposing to require that individual brokers complete 36
hours of continuing broker education per triennial period.
---------------------------------------------------------------------------
\11\ See, e.g., Ala. R. Mand. Cont. Legal Ed. Rule 3, available
at https://www.alabar.org/assets/2019/02/MCLE-RULE-BOOK-2017-updated-01-17-2017.pdf (accessed on July 16, 2021); Ark. R. Minimum
Con't Legal Educ. Rule 4, available at https://rules.arcourts.gov/w/ark/rules-for-minimum-continuing-legal-education#!fragment/zoupio-_Toc44590166/BQCwhgziBcwMYgK4DsDWszIQewE4BUBTADwBdoAvbRABwEtsBaAfX2zgBYOBWATgAYAjADZhASgA0ybKUIQAiokK4AntADk6iRDi5sAG30BhJGmgBCZNsJhcCRcrWbrthAGU8pAEJqASgFEAGX8ANQBBADkjfwlSMAAjaFJ2MTEgA (accessed on July 16, 2021);
Conn. Practice Book Sec. 2-27A, available at https://www.jud.ct.gov/Publications/PracticeBook/PB.pdf (accessed on July
16, 2021); Cal Bus & Prof Code Sec. 1275, available at https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1275&lawCode=BPC (accessed on
July 16, 2021).
---------------------------------------------------------------------------
2. Qualifying Continuing Education
Seven commenters suggested that corporate, in-house training should
be eligible for continuing education credit. CBP agrees that corporate,
in-house training can serve as an appropriate continuing education
activity, as it is routinely given to employees to provide them with
knowledge specifically tailored to their job functions and experience
levels. As such, CBP's proposal would allow customs brokers to satisfy
the continuing education requirement through corporate, in-house
training if the training receives the approval of an accreditor. CBP
believes that requiring corporate, in-house training to be approved by
an accreditor will ensure that it meets the objectives of the
continuing education framework proposed in this NPRM.
Three commenters also suggested that any training or educational
activity provided by CBP, or offered by any other U.S. Government
agency that routinely offers training relevant to customs business,
should automatically qualify for continuing education credit, without
the need for accreditation. CBP agrees and believes that these types of
activities should automatically qualify for continuing education
credit, thus limiting the administrative burden and overall costs
associated with the implementation of the proposed rule. Additionally,
CBP's trainings are designed to educate the public about important and
timely issues facing entities involved in international trade, and,
thus, by virtue of their design, meet the objectives of continuing
broker education--that is, to assist individual brokers in maintaining
a sufficient knowledge of customs matters. Accordingly, CBP adopted the
commenters' suggestion in this NPRM.
3. Specific Subject Matter Content Requirements
Five commenters raised concerns pertaining to CBP's proposal to
require customs brokers to complete a specific number of hours of
continuing education on specific subject matter areas (content
requirements). In the ANPRM, CBP solicited public comments on the
adoption of a continuing broker education framework that would have
required the majority (75 percent) of the required continuing education
credits to pertain to laws authorizing CBP operations and processes, as
well as CBP regulations and programs. Under the proposal considered in
the ANPRM, only the remainder (25 percent) would have been available
for education focusing on other areas related to international trade
(such as other U.S. Government agency requirements).
All commenters that addressed specific subject matter areas raised
concerns about the adoption of the ANPRM's stringent content
requirement. These commenters noted that such a content requirement
would discourage individual brokers from participating in continuing
education specifically tailored to their job functions and their
experience levels, and, therefore, would inhibit professionalism and
competency within the customs broker community. In light of the
commenters' concerns, CBP is not proposing to require individual
brokers to complete a specific number of hours of continuing education
on laws authorizing CBP operations and processes, and CBP regulations
and programs. CBP recognizes that the educational needs of individual
brokers differ greatly based on each individual broker's position,
experience level, and type of employment, and, thus, render content
requirements impractical. Additionally, CBP believes that, as CBP and
the PGAs offer a sufficient number of free, online-based trainings for
an individual broker to meet the required number of continued education
credits, there is little risk that an individual broker would opt to
complete the same training or educational activity multiple times
solely for the purpose of earning the required minimum number of
continuing education credits.
4. Recordkeeping Requirements
Four commenters agreed with CBP's suggestion that although
individual brokers should maintain records documenting their compliance
with the continuing broker education requirement (including specific
information), they should not be required to maintain records in any
specific format (i.e., electronically or in paper). Although the
commenters agreed with this suggestion, several of the commenters
requested that a form be developed in the Automated Commercial
Environment (ACE) where customs brokers could record their credits as
they are earned and accrued. In accordance with the commenters'
suggestions, this NPRM does not propose requiring customs brokers to
maintain records documenting their compliance with the continuing
broker education requirement in any specific form, although the
proposed regulations require such records to include certain
information and documentation, which are discussed in further detail in
section IV.C.4. of this NPRM. CBP appreciates the commenters'
suggestion and will consider developing such a tool in ACE. If
developed, customs brokers would not be required to use the ACE tool,
but it would serve as an option for individuals to track their credits
earned. However, this ACE tool would not be a substitute for
maintaining records documenting compliance with the continuing broker
education requirement.
[[Page 50799]]
5. Economic Impact
Four commenters raised concerns about the costs of requiring
continuing education and the potential impact of a continuing broker
education requirement on small businesses. CBP appreciates these
comments and has developed the proposed framework for continuing broker
education with this concern in mind. In addition to lowering the
originally proposed number of required hours of continuing education,
CBP is also committed to providing free, online content that will
satisfy the continuing broker education requirement. CBP already
provides at least 36 hours of training or informational webinars on an
annual basis, which would allow individual brokers to fully satisfy the
continuing broker education requirement through free, CBP-provided
content. As described in more detail below, CBP is also proposing that,
once accreditation has been obtained for training or educational
activities, the vast majority of continuing education currently
obtained at a broker's expense for various certificate programs offered
by the private sector would qualify for continuing education credit.
6. Effectiveness of Continuing Education
Five commenters were opposed to the introduction of a continuing
education requirement for customs brokers, arguing that this would not
affect compliance and that customs brokers demonstrate their knowledge
of customs business on a transactional basis with their clients. A
number of the commenters also requested that customs brokers who do not
actively file entries should be exempt from the requirement. CBP
disagrees and is proposing that all individual brokers, regardless of
filing status, earn continuing education credit, with the exception of
those individual brokers who have voluntarily suspended their licenses
in accordance with 19 CFR 111.52. Furthermore, CBP continues to believe
that the complex and evolving realm of international trade warrants a
continuing education framework for individual brokers.
IV. Discussion of Proposed Framework for Continuing Education for
Licensed Customs Brokers
CBP is proposing amendments to 19 CFR part 111 to require
continuing education for individual customs broker license holders.
CBP's proposal includes the addition of a new subpart F to 19 CFR part
111, consisting of Sec. Sec. 111.101 through 111.104, which will set
forth the continuing broker education requirement and the framework for
administering this requirement. Proposed Sec. 111.101 sets forth the
scope of proposed subpart F, proposed Sec. 111.102 sets forth the
obligations that individual customs brokers would have in conjunction
with the continuing broker education requirement, proposed Sec.
111.103 contains the requirements that educational activities would be
required to meet in order to satisfy the continuing broker education
requirement and sets forth an accreditation process for certain
training or educational activities, and proposed Sec. 111.104 sets
forth the disciplinary proceedings for the failure to comply with the
continuing broker education requirement.
CBP is also proposing to amend several existing provisions in 19
CFR part 111. CBP is proposing to require individual brokers to certify
and report their compliance with the continuing broker education
requirement as part of the submission of the status report, which is
due on a triennial basis (hereinafter, referred to as ``status report''
or ``triennial report'') by amending Sec. 111.30(d). Additionally, CBP
is proposing to amend Sec. 111.0, which sets forth the scope of part
111, in order to reflect the addition of proposed subpart F, and amend
Sec. 111.1, which is a definitional provision, in order to define
certain terms as they are used in the context of the continuing broker
education requirement. Finally, CBP is proposing to reserve Sec. Sec.
111.97 through 111.100 for future use. The proposed changes are
described in detail below.
A. Modifications to the Scope of 19 CFR Part 111
Section 111.0 sets forth the scope of the provisions contained in
19 CFR part 111, which currently include the licensing of, and granting
of permits to, persons desiring to transact customs business as customs
brokers, the duties and responsibilities of customs brokers, and the
grounds for disciplining customs brokers. CBP is proposing to revise
the second sentence of Sec. 111.0 to reflect the proposed addition of
regulatory provisions requiring individual brokers to satisfy a
continuing education requirement.
B. Definitions for the Proposed Continuing Broker Education Framework
Section 111.1 provides definitions for terms as they appear in 19
CFR part 111. For purposes of the creation of a continuing education
requirement for individual brokers, CBP is proposing the addition of
definitions of four terms--``continuing broker education requirement'',
``continuing education credit'', ``qualifying continuing broker
education'', and ``triennial period''. Although amended Sec. 111.1
would continue to list definitions in alphabetical order, this section
discusses the proposed definitions in logical order, for explanatory
purposes.
The term ``qualifying continuing broker education'' defines any
training or educational activity that is eligible or, if required, has
been approved for continuing education credit, in accordance with
proposed Sec. 111.103. This definition indicates that a wide range of
training or educational activities will meet an individual broker's
obligation to complete continuing education, which must satisfy the
requirements set forth in proposed Sec. 111.103.
The term ``continuing education credit'' defines the unit of
measurement used for meeting the continuing broker education
requirement. The smallest recognized unit is one continuing education
credit, which requires 60 minutes of continuous participation in a
qualifying continuing broker education program, as defined in proposed
Sec. 111.103(a). For qualifying continuing broker education lasting
more than 60 minutes, one continuing education credit may be claimed
for the first 60 minutes of continuous participation, and half of one
continuing education credit may be claimed for every full 30 minutes of
continuous participation thereafter. For example, for a qualifying
continuing broker education program lasting more than 60 minutes but
less than 90 minutes, only one continuing education credit may be
claimed. In contrast, for a qualifying continuing broker education
program lasting 90 minutes, 1.5 continuing education credits may be
claimed.
The term ``continuing broker education requirement'' defines an
individual customs broker license holder's obligation to complete a
certain number of continuing education credits of qualifying continuing
broker education, as set forth in proposed subpart F of part 111, in
order to maintain sufficient knowledge of customs and related laws,
regulations, and procedures, bookkeeping, accounting, and all other
appropriate matters necessary to render valuable service to importers
and drawback claimants.
The term ``triennial period'' defines a period of three years
commencing on February 1, 1985, or on February 1 in
[[Page 50800]]
any third year thereafter.\12\ As explained in further detail below,
CBP is proposing to require individual brokers to report and certify
compliance with the continuing broker education requirement on the
triennial report. Thus, for purposes of clarification, CBP is proposing
a definition for the 3-year period between the due dates of two
consecutive status reports.
---------------------------------------------------------------------------
\12\ February 1, 1985, was the first due date for the triennial
reporting requirement, and, thus, February 1 in any third year
thereafter is the date on which the triennial report becomes due.
See 19 CFR 111.30(d)(1).
---------------------------------------------------------------------------
C. Continuing Education Requirements for Customs Brokers
In addition to requiring individual brokers to participate in
continuing education activities, the proposed framework includes
provisions imposing additional related duties upon individual brokers,
such as reporting and recordkeeping requirements, that promote
compliance and allow for the enforcement of the continuing education
requirement. For these reasons, the proposed framework also contains
provisions authorizing disciplinary actions upon a broker's failure to
comply with these requirements. These requirements are contained in
proposed Sec. Sec. 111.102 and 111.104, which are discussed in detail
below.
1. Customs Broker License Holders Subject to Continuing Broker
Education Requirement
Proposed Sec. 111.102(a) sets forth the customs broker license
holders who will be subject to the continuing broker education
requirement. Specifically, proposed Sec. 111.102(a) provides that only
individual customs broker license holders (individual brokers) will be
required to complete qualifying continuing broker education. Proposed
Sec. 111.102(a) also exempts two groups of individual brokers from
this requirement--namely, individual brokers who have voluntarily
suspended their license in accordance with Sec. 111.52, and individual
customs broker license holders who have not held their license for an
entire triennial period at the time of the submission of the status
report as required under Sec. 111.30(d). CBP does not believe that it
is necessary to require continuing education for individual brokers who
have not held their license for an entire triennial period at the time
that their first triennial report is due, because these individual
brokers have recently demonstrated a sufficient baseline knowledge of
customs matters by passing the customs broker examination.
CBP is proposing to exempt individual brokers who have voluntarily
suspended their license from the continuing broker education
requirement because customs brokers may choose to voluntarily suspend
their licenses for many reasons, including changes in a broker's
personal life or the entry into federal service (which prohibits the
customs broker from concurrently serving as a customs broker to
transact customs business on behalf of clients in dealings with the
federal government). As some of these reasons may prevent a broker from
participating in or attending qualifying continuing broker education
programs, CBP believes that requiring individual brokers to comply with
the continuing broker education requirement during a period of
voluntary suspension would be overly burdensome.
At this time, CBP is not proposing to impose a similar obligation
onto corporation, partnership, or association brokers (hereinafter,
collectively referred to as ``corporate brokers''), because knowledge
is held at the individual level. The reason is because corporate
brokers are comprised of one or more individual brokers and the
individual brokers will be subject to the continuing education
requirement. Furthermore, the training required of the employees of a
customs broker is already taken into consideration when determining
whether the license holder exercises responsible supervision and
control. Pursuant to 19 CFR 111.28(a), every licensed member or officer
of a corporate broker that is an individual broker, as well as every
individual broker operating as a sole proprietor, is obligated to
exercise responsible supervision and control over the transaction of
the customs business of the sole proprietorship, partnership,
association, or corporation.\13\ Therefore, individual brokers who
serve as members or officials of a corporate broker, as well as
individual brokers who operate as sole proprietorships with employees,
are already incentivized to ensure that the employees of the sole
proprietorship, partnership, association, or corporation complete
continuing education. Accordingly, CBP does not believe that it is
necessary to impose a similar obligation on corporate brokers at the
organizational level.
---------------------------------------------------------------------------
\13\ Section 111.1 defines the phrase ``responsible supervision
and control'' and provides, in relevant part, that one of the
factors that CBP will consider in determining whether the customs
broker exercises responsible supervision and control is the training
required of the employees of the broker. However, the determination
of what is necessary to perform and maintain responsible supervision
and control will vary depending upon the circumstances in each
instance. See 19 CFR 111.1.
---------------------------------------------------------------------------
2. Required Minimum Number of Continuing Education Credits
Proposed Sec. 111.102(b) sets forth the number of continuing
education credits that individual brokers, who, pursuant to proposed
Sec. 111.102(a), are subject to the continuing broker education
requirement, must complete. Specifically, proposed Sec. 111.102(b)
provides that these individual brokers are required to complete at
least 36 continuing education credits per triennial period, except upon
the reinstatement of a license following a period of voluntary
suspension as described in Sec. 111.52. Upon consideration of the
public comments received on the ANPRM, CBP is no longer proposing to
require 40 continuing education credits per triennial period, as this
will simplify the proration of continuing education credits for the
purposes discussed below.
When a broker chooses to reactivate his or her license following a
period of voluntary suspension, the broker generally contacts CBP to
begin the reinstatement process. This process determines the precise
date on which the license will be reinstated, which may occur at any
time during the triennial period. Thus, after a period of voluntary
suspension, the completion of the full 36 continuing education credits
within the remainder of the current triennial period could impose an
undue burden upon the individual broker, depending on when during the
triennial period the reinstatement occurs. To address this, proposed
Sec. 111.102(b) provides that, following the reinstatement of a
license after a period of voluntary suspension, the number of
continuing education credits required for the triennial period (that
is, the triennial period during which the reinstatement of the license
occurs) is calculated on a prorated basis, of one continuing education
credit for each complete remaining month until the end of the triennial
period.
For example, if, following a period of voluntary suspension, an
individual broker's license were to be reinstated on March 21, 2028,
the individual broker would only be required to complete 22 continuing
education credits during the triennial period (February 1, 2027, to
February 1, 2030) in which the license was reinstated. Effectively, the
amount of continuing education credits required is prorated for the
number of full months remaining in the triennial period (April 1, 2028,
to February 1,
[[Page 50801]]
2030). As another example, if the individual broker's license were to
be reinstated on February 1, 2027, the individual broker would be
required to complete all 36 continuing education credits during the
triennial period. When, following a period of voluntary suspension, the
individual broker contacts CBP to request the reinstatement of the
license, CBP will assist the broker in determining the prorated number
of continuing education credits that he or she will be required to
complete during the current triennial period.
3. Reporting of Compliance With the Continuing Broker Education
Requirement
Proposed Sec. 111.102(c) provides that individual brokers, who are
required to comply with the continuing broker education requirement,
will be subject to an additional reporting obligation. Specifically,
CBP is proposing to require individual brokers to report and certify
their compliance with the continuing broker education requirement upon
the submission of the status report required under existing Sec.
111.30(d).
Current Sec. 111.30(d)(1) requires both individual and corporate
brokers to file a status report with CBP. The status report is due on
February 1 of each third year after 1985, and will be considered timely
filed as long as the report is received during the month of February.
As part of the submission of the triennial report, customs brokers are
required to pay a fee, which is prescribed in paragraph (d) of Sec.
111.96. Status reports must be addressed to the director of the port
through which the license was delivered to the licensee (see Sec.
111.15), or, since the February 2021 triennial period, can be filed in
the eCBP portal (available at https://e.cbp.dhs.gov/ecbp/#/main). The
information that must be included in a status report submitted by an
individual broker is set forth in current Sec. 111.30(d)(2).
As proposed Sec. 111.102(c) would impose upon individual brokers
the obligation to report and certify their compliance with the
continuing broker education requirement upon the submission of the
status report, CBP is also proposing to amend current Sec.
111.30(d)(2) to reflect this obligation by adding a new paragraph
(d)(2)(iv) to reflect that individual customs brokers must report and
certify their compliance with the continuing broker education
requirement. CBP is also proposing minor grammatical changes to
existing paragraphs (d)(2)(ii) and (iii) of Sec. 111.30 in order to
allow for the addition of proposed paragraph (d)(2)(iv); however, these
changes are not substantive. Individual brokers who file paper-based
triennial reports with CBP would report and certify compliance by
including a written statement in the triennial report that reports and
certifies their compliance with the continuing broker education
requirement.
CBP is proposing to require individual brokers to report and
certify compliance on the triennial report for two reasons. First, as
the status report has been an integral part of maintaining a customs
broker license since 1985, this mechanism is familiar to customs
brokers and will minimize any additional burden that the new reporting
obligation would place upon individual brokers. As individual brokers
are already accustomed to the submission of status reports, individual
brokers would not need to familiarize themselves with a new type of
information collection. Second, aligning the timeframe for continuing
education with the three-year filing timeframe for the status report
will give individual brokers a number of years to earn the required
number of continuing education credits. This will provide them with
flexibility and the opportunity to select qualifying continuing broker
education programs that best meet their individual educational needs.
4. Recordkeeping Requirements for Individual Customs Brokers
In conjunction with the continuing education requirement, CBP is
proposing to require individual brokers to maintain records documenting
their completion of the required number of continuing education
credits. This requirement is set forth in proposed Sec. 111.102(d),
and is intended to enable CBP to verify an individual broker's
compliance with the requirements set forth in paragraphs (a) and (b) of
proposed Sec. 111.102.
Proposed Sec. 111.102(d)(1) provides that, for a period of three
years following the submission of the status report required under
Sec. 111.30(d), an individual broker must retain certain information
and documentation pertaining to the qualifying continuing broker
education completed during the triennial period. Proposed Sec.
111.102(d)(1) contains a list of the type of information and
documentation that must be retained, consisting of: (1) The title of
the qualifying continuing broker education attended; (2) the name of
the provider or host of the qualifying continuing broker education; (3)
the date(s) attended; (4) the number of continuing education credits
accrued; (5) the location of the training or educational activity, if
the training or educational activity is offered in person; and (6) any
documentation received from the provider or host of the qualifying
continuing broker education that evidences the individual broker's
registration for, attendance at, completion of, or other activity
bearing upon the individual broker's participation in and completion of
the qualifying continuing broker education. The last item would include
receipts or confirmations documenting the individual broker's intention
to attend the qualifying continuing broker education program, written
or electronic materials provided as part of the attendance of the
training or educational activity, or certificates of completion or
attendance. An individual broker would only be required to retain such
documentation, if such documentation is made available by the provider
or host of the qualifying continuing broker education to attendees of
the training or educational activity. Unlike the general broker record
retention requirement in current 19 CFR 111.23(b), the recordkeeping
requirement in proposed Sec. 111.102(d)(1) only requires the records
to be retained for a period of three years following the submission of
the triennial report (rather than for a five-year period).
Upon consideration of the comments received in response to the
ANPRM, CBP is not proposing to require individual brokers to maintain
the records in a specific format (i.e., electronically or in paper).
For example, if the individual broker received paper documents in the
mail or in person from an education provider, the individual broker
could retain the information in that form, or could scan and retain it
in electronic form. Based on several public comments to the ANPRM, CBP
will explore building a tool in ACE that would serve as a place to
record and track continuing education credits, but this would not be a
substitute for document retention by the individual broker. Individual
brokers would not be required to access or use this tool; rather, it
would provide a means to record continuing education credits earned
over time if convenient for the individual broker.
Proposed Sec. 111.102(d)(2) provides CBP with authority to request
the information and documentation for a period of three years following
the submission of the status report required under Sec. 111.30(d)(2).
CBP can request the information and documentation be made available for
in-person inspection, or be delivered to CBP by either hard-copy or
electronic means, or any combination thereof. Proposed Sec. 111.102(d)
is intended to enable CBP
[[Page 50802]]
to verify an individual broker's compliance with the requirements set
forth in paragraphs (a) and (b) of this proposed section--that is, the
completion of the required number of continuing education credits
during the triennial period.
5. Disciplinary Actions
Proposed Sec. 111.104 authorizes CBP to take disciplinary actions,
if an individual broker, who is required to complete qualifying
continuing broker education, submits a triennial report but fails to
report and certify his or her compliance with the continuing broker
education requirement on the triennial report. These actions take a
path of ``progressive discipline'' by imposing increasingly serious
measures following a reasonable time and opportunity to take corrective
actions. This approach is rooted in CBP's goal to ensure that all
individual brokers participate in continuing education activities, but
not to take disciplinary actions against brokers for mere clerical
errors, such as the failure to report compliance with the continuing
broker education requirement due to a mere oversight.
Proposed Sec. 111.104(a) provides that, if an individual broker,
who is required to complete qualifying continuing broker education,
submits a triennial report but fails to report and certify his or her
compliance with the continuing broker education requirement on the
triennial report, CBP will notify the individual broker of his or her
noncompliance. Pursuant to proposed Sec. 111.104(a), CBP would send
the notification to the address reflected in CBP's records or transmit
it electronically pursuant to any electronic means authorized by CBP
for that purpose. This language would authorize CBP to send such
notification to the mailing address that the individual broker listed
on the status report or via email (if the individual broker's email
address is on file with CBP).
Proposed Sec. 111.104(b) requires the noncompliant individual
broker to take appropriate corrective actions within 30 calendar days
upon the issuance of such notification. During this period, the
individual broker would be provided with an opportunity to take
corrective actions without being subjected to any disciplinary
consequences for his or her noncompliance. As reflected in paragraphs
(b)(1) and (2) of proposed Sec. 111.104, the nature of the required
corrective actions is determined by the reason for the individual
broker's failure to report and certify compliance on the triennial
report. If the individual broker completed the required number of
continuing education credits, but failed to report and certify his or
her compliance with the continuing broker education requirement on the
triennial report, the broker would merely be required to submit a
corrected triennial report that reflects the broker's compliance. If
the individual broker did not report and certify compliance on the
triennial report because the broker did not complete the required
number of continuing education credits, the broker would be required to
complete the required number of continuing education credits and then
submit a corrected triennial report.
Proposed Sec. 111.104(c) provides that, if the noncompliant
individual broker fails to take the required corrective actions within
30 calendar days upon the issuance of the aforementioned notification,
CBP will take actions to suspend the broker's individual license. Upon
the suspension of the individual broker's license and the issuance of
the order of suspension, the individual broker would be provided with
an additional opportunity to take the required corrective actions
before CBP would take more serious disciplinary measures. Specifically,
in paragraph (d), proposed Sec. 111.104 provides that, if following
the suspension of the license the noncompliant individual fails to take
the required corrective actions within 120 calendar days upon the
issuance of the order of suspension, CBP will take actions to revoke
the individual broker's license without prejudice to the filing of an
application for a new license. As proposed Sec. 111.104(d) provides
that the individual broker's license would be revoked without prejudice
to the filing of an application for a new license, the individual
broker would not be prevented from seeking a new individual customs
broker license at a later point in time.
Existing Sec. 111.53(c) provides the relevant basis for the
suspension and/or revocation of a customs broker's license when an
individual broker fails to submit a status report reporting and
certifying his or her compliance with the continuing broker education
requirement. Section 111.53(c), which authorizes CBP to initiate
proceedings for the suspension, for a specific period of time, or
revocation of the license or permit of any broker for any violation of
a statutory provision enforced by CBP or any rule or regulation issued
by CBP, implements 19 U.S.C. 1641(d)(1)(C). Consequently, pursuant to
19 U.S.C. 1641(d)(2)(B), as implemented by subpart D of part 111 (19
CFR part 111, subpart D), CBP would be required to comply with certain
formal procedural requirements in suspending or revoking the individual
broker's license, which would conclude with the issuance of an order of
suspension or revocation. This is reflected in paragraphs (c) and (d)
of proposed Sec. 111.104 through the cross-references to subpart D of
part 111. As such, CBP is not adopting either of the proposals
considered in the ANPRM--that is, to suspend or revoke an individual
broker's license by operation of law.
The provisions of proposed Sec. 111.104 would only apply to cases
in which an individual broker, who is required to complete qualifying
continuing broker education, submits a triennial report but fails to
report and certify his or her compliance with the continuing broker
education requirement on the triennial report. CBP believes that any
other type of misconduct could be sufficiently addressed through
existing regulatory provisions. For example, if an individual broker
were to fail to timely submit a triennial report, or to submit no
triennial report at all, CBP would continue to seek the suspension and/
or revocation of the individual broker's license in accordance with the
provisions of current Sec. 111.30(d)(4). Additionally, current Sec.
111.53(a), which implements 19 U.S.C. 1641(d)(1)(A), authorizes CBP to
initiate proceedings for the suspension, for a specific period of time,
or revocation of the license or permit of a customs broker, if the
broker has, among others, made in any report filed with CBP any
statement which was, at the time and in light of the circumstances
under which it was made, false or misleading with respect to any
material fact, or has omitted to state in any report any material fact
which was required.
In the context of the proposed framework, CBP foresees that
violations of Sec. 111.53(a) could arise from the following
misconduct. First, a violation of Sec. 111.53(a) would occur, if an
individual broker were to falsely report and certify compliance with
the continuing broker education requirement on the triennial report
when, at the time of the submission of the triennial report, the
individual broker had not completed the required number of continuing
education credits. This would include cases in which an individual
broker, who has not yet completed the required number of continuing
education credits, submits a triennial report on which the broker
reports and certifies compliance, but later completes the required
number of continuing education credits. Second, a violation of Sec.
111.53(a) would occur, if, in accordance with proposed Sec.
111.102(d)(2), CBP were to request additional documentation from an
[[Page 50803]]
individual broker to verify the broker's compliance with the continuing
broker education requirement, and the documentation submitted by the
broker were to contain any statement which, at the time and in light of
the circumstances under which it was made, is false or misleading with
respect to any material fact, or omitted a material fact. This would
include the submission of falsified documentation, documentation
containing false or misleading statements of material fact, or
documentation omitting any material fact (such as the title or provider
of a continuing education program, if the training or educational
activity did not meet the requirements for qualifying continuing broker
education). Third, a violation of Sec. 111.53(a) would occur, if, in
accordance with proposed Sec. 111.102(d)(2), CBP were to request
additional documentation from an individual broker to verify the
broker's compliance with the continuing broker education requirement,
and the individual broker were to be unable to submit any documentation
in response to CBP's request.
D. Training and Educational Activities That Qualify as Continuing
Broker Education
Although amended Sec. 111.1 contains a proposed definition of the
term ``qualifying continuing broker education'', this definition also
provides that, in order to constitute qualifying continuing broker
education, a training or educational activity must meet certain
additional requirements. These requirements are set forth in paragraphs
(a) and (b) of proposed Sec. 111.103. Specifically, paragraph (a)(1)
sets forth requirements for categories of educational providers
(including both government and non-government providers), while
paragraph (a)(2) lists the types of training or educational activities
that are recognized for purposes of the continuing broker education
requirement. Paragraph (b) of proposed Sec. 111.103 contains
provisions pertaining to continuing education credits that are earned
as an instructor, discussion leader, and speaker.
1. Categories of Educational Providers
Proposed Sec. 111.103(a)(1) divides training or educational
activities into two categories based on the identity of the content
provider offering the training or educational activity. Pursuant to
proposed paragraph (a)(1)(i), the first category consists of training
or educational activities offered by U.S. Government agencies.
Specifically, paragraph (a)(1)(i) provides that qualifying continuing
broker education constitutes any training or educational activity
offered by CBP, whether online or in-person, and any training or
educational activity offered by another U.S. Government agency, whether
online or in-person, if the content is relevant to customs business.
These types of trainings or educational activities would not require
the approval of a CBP-selected accreditor and would qualify for
continuing education credit automatically.
CBP is proposing that training or educational activities offered by
U.S. Government agencies should automatically qualify for continuing
education credit, without the approval by a CBP-selected accreditor,
because quality control of the content is less of a concern with regard
to this type of content provider. Training or educational activities
offered by CBP are designed to educate the public about important and
timely issues faced by entities involved in international trade. Thus,
CBP believes that, by virtue of their design, these training or
educational activities meet the objectives of the continuing broker
education framework--that is, to assist individual brokers in
maintaining a sufficient knowledge of customs matters. Additionally,
CBP believes that other U.S. Government agencies carefully select
educational content based on timeliness and importance, and accurately
present the content to members of the public.
CBP believes that allowing training or educational activities
offered by CBP, or other U.S. Government agencies, if they provide
educational content that is relevant to customs business, to
automatically qualify for continuing education credit will limit the
administrative burden and costs associated with the implementation of
the proposal. CBP's proposal deliberately provides individual brokers
with wide latitude when determining whether a training or educational
activity offered by an U.S. Government agency other than CBP is
relevant to customs business. This discretion empowers individual
brokers with the ability to select training or educational activities
based on their individual educational needs. CBP also anticipates
making a list of recommended U.S. Government agency provided training
or educational activities publicly available on the CBP website to
allow individual brokers to easily identify activities that are free of
cost and automatically qualify for continuing education credit.
Pursuant to proposed paragraph (a)(1)(ii), the second category of
educational providers consists of training or educational activities
offered by a content provider other than a U.S. Government agency. Any
training or educational activity not offered by a U.S. Government
agency (such as private-sector entities, non-profit organizations, and
foreign government agencies), whether online or in-person, will not be
considered qualifying continuing broker education, unless the training
or educational activity has been approved for continuing education
credit by a CBP-selected accreditor before the training or educational
activity is provided. CBP is proposing to require accreditation for
such training or educational activities to ensure that they offer
educational content that is high-quality, current, relevant, and
accurate, and that it is directly tied to customs business.
As noted previously, CBP is not proposing the adoption of subject-
matter-specific content requirements at this time in order to enable
individual brokers to participate in educational opportunities that
provide them with knowledge directly relevant to their specific
position and experience level. Additionally, to encourage the creation
of low-cost educational opportunities that satisfy the continuing
broker education requirement, CBP's proposal does not differentiate
between educational opportunities that are offered online or in-person.
CBP intends for this to minimize the costs to small businesses and
customs brokers in remote locations so that individual brokers will not
be required to travel to attend qualifying continuing broker education
programs. CBP believes that the opportunity for individual brokers to
earn the required number of continued education credits through free,
online-based trainings would further incentivize individual brokers to
select training or educational activities based on their educational
needs and, thereby, limit the risk that individual brokers complete the
same training or educational activities multiple times solely for the
purpose of earning the required minimum number of continuing education
credits.
Regardless of who provides the training or educational activities,
CBP anticipates that providers will issue certificates to customs
brokers upon completion. CBP will make certificates of attendance
available for all of its training or educational activities to those
participants who want them. For online-based training or educational
activities, CBP will make certificates of attendance available for
download or printing at the conclusion of the presentation. For in-
person activities, such as the Trade Symposium, CBP will make paper
certificates available to
[[Page 50804]]
licensed customs brokers to pick up prior to the end of the conference.
Additionally, because one of the factors to become a CBP-selected
accreditor will be to design and develop certificates for approved
education providers to use as needed, certificates of attendance will
also be available for any qualifying continuing broker education
offered by private, non-profit, or foreign government entities.\14\
---------------------------------------------------------------------------
\14\ As part of the RFP process, applicants will be required to
provide CBP with information how they plan to handle the post-course
certification process for those course providers who apply for
accreditation.
---------------------------------------------------------------------------
CBP will work with its PGAs to make them aware of the new
continuing education requirements, if finalized, so that the PGAs can
consider making available certificates of attendance or completion,
whether in electronic or paper form. However, CBP is unable to require
its PGAs to provide certificates of attendance or completion. Proposed
Sec. 111.102(d)(1)(iv) thus only requires an individual broker to
retain any documentation that the individual broker received from the
provider or host of the qualifying continuing broker education that
evidences the individual broker's registration for, attendance at,
completion of, or other activity bearing upon the individual broker's
participation in and completion of the qualifying continuing broker
education. Therefore, the language in proposed Sec. 111.102(d)(1)(iv)
accounts for the possibility that certificates of attendance or
completion may not be issued for all qualifying training or educational
activities provided by its PGAs.
2. Recognized Training or Educational Activities
CBP is proposing that only certain categories of training or
educational activities may be considered qualifying continuing broker
education. The list of recognized categories of training or educational
activities is contained in paragraphs (a)(2)(i) through (iv) of
proposed Sec. 111.103. Paragraph (a)(2)(i) provides that the first
category consists of coursework, seminars, or workshops, whether online
or in-person, that are conducted by an instructor, discussion leader,
or speaker. This category would include most webinars, in-house
training, university or college courses, or similar educational
programs.
Paragraph (a)(2)(ii) provides that the second category includes
symposia and conventions, whether online or in-person. This category
would include the annual CBP Trade Symposium and similar educational
programs. However, meetings that are conducted in accordance with the
provisions of the Federal Advisory Committee Act, as amended (5 U.S.C.
App.) (FACA), are expressly excluded from this category. As such,
individual brokers would not be permitted to claim continuing education
credit for their participation in committees, subcommittees,
workgroups, and any other group organized under the auspices of the
Commercial Customs Operations Advisory Committee (COAC), as well as
public COAC meetings. CBP is proposing to exclude FACA meetings because
these meetings do not serve an educational purpose. FACA meetings are
intended, instead, to solicit advice from advisory committee members
and to receive input from the public that may later form the basis for
government decisions.
The last two categories of recognized training or educational
activities are set forth in paragraphs (a)(2)(iii) and (iv) which will
permit individual brokers serving as instructors, discussion leaders,
or speakers to receive continuing education credit for the time spent
preparing a subject matter for presentation and presenting a subject
matter (hereinafter, referred to as ``special allowance''). Paragraphs
(a)(2)(iii) and (iv) provide that the subject matter must be presented
as part of a training or educational activity that falls within one of
the first two recognized categories of training or educational
activities (that is, the categories described in paragraphs (a)(2)(i)
and (ii) of proposed Sec. 111.103), and the special allowance for
instructors, discussion leaders, or speakers is subject to the
conditions and limitations set forth in proposed Sec. 111.103(b).
While CBP is proposing to carve out a special allowance for certain
instructors, discussion leaders, or speakers, CBP is not proposing to
permit individual brokers to claim continuing education credit for
authoring articles, books, or other publications. CBP believes that the
learning involved in the authoring of a publication does not
necessarily equate to the knowledge derived from a continuing education
program that is current and developed by an individual or organization
qualified in the relevant subject matter, as the learning does not
necessarily include an interactive component. For this reason, CBP is
also not including credit hours for independently reading articles,
books, or other publications or for paid subscriptions to these types
of materials. If these materials are part of an accredited course, then
the course hours may be eligible for continuing education credit.
3. Special Allowance for Instructors, Discussion Leaders, and Speakers
Proposed Sec. 111.103(b) sets forth additional requirements and
limitations pertaining to the special allowance for instructors,
discussion leaders, and speakers. In proposed paragraph (b)(1), CBP
sets forth that, contingent upon the approval by a CBP-selected
accreditor, an individual broker may claim one continuing education
credit for each full 60 minutes spent presenting subject matter, or
preparing subject matter for presentation, as a discussion leader, or
speaker at a training or educational activity described in paragraphs
(a)(2)(i) and (ii) of this section.
However, the special allowance for instructors, discussion leaders,
and speakers is subject to limitations, which are set forth in proposed
Sec. 111.103(b)(2) and (3). Specifically, proposed Sec.
111.103(b)(2)(i) provides that, for any session of presentation given
at one time, regardless of the duration of that session, an individual
broker may claim, at a maximum, one continuing education credit for the
time spent preparing subject matter for that presentation pursuant to
paragraph (b)(1)(ii). Further, proposed Sec. 111.103(b)(2)(ii) also
imposes a limit on the total number of continuing education credits
that an individual broker can earn based on his or her activities as an
instructor, discussion leader, or speaker. This limit is 12 continuing
education credits per triennial period. CBP is proposing these
limitations to ensure that individual brokers receive education in a
broad variety of subject matters, not just provide instructions,
possibly exclusively on the same subject matter.
As specified in proposed Sec. 111.103(b)(3), any instructor,
discussion leader, or speaker seeking to claim continuing education
credit for the preparation of a subject matter for presentation, or the
presentation of a subject matter, at one of a training or educational
activity described in paragraph (a)(2)(i) or (ii) of proposed Sec.
111.103, must obtain approval by a CBP-selected accreditor, regardless
of whether the training or educational activity is offered by a U.S.
Government agency or another provider. CBP is proposing this
requirement in order to ensure that the effort and quality of the
educational experience derived from the activities as an instructor,
discussion leader, or speaker is commensurate with the award of
continuing education credit.
Like content providers, the means by which an individual broker
claiming continuing education credits under the
[[Page 50805]]
special allowance would be notified of an accreditor's approval would
vary based on the terms of the accreditor's contractual relationship
with CBP, which is discussed in further detail in section IV.E. of this
NPRM. Depending on the terms of the accreditor's contractual
relationship with CBP, the individual broker would be notified of the
accreditor's approval either in writing or electronically, or both. CBP
anticipates that, as part of the selection process for the accreditors,
it will require each accreditor to (1) provide CBP with a running list
of activities that the accreditor approved, and/or (2) publish this
list on its website. A failure to observe the requirements and
limitations set forth in proposed Sec. 111.103(b) would result in a
failure to comply with the continuing broker education requirement for
the triennial period. Thus, if an individual broker were to fail to
observe the requirements and limitations set forth in proposed Sec.
111.103(b) and to report and certify compliance with the continuing
broker education requirement on the triennial report, the individual
broker would falsely report and certify compliance on the triennial
report. As a result, CBP could impose disciplinary actions pursuant to
proposed Sec. 111.104 and existing Sec. 111.53(a).
E. Accreditation of Providers of Continuing Broker Education
CBP believes that it is necessary to implement an accreditation
process for training or educational activities not offered by a U.S.
Government agency, including the special allowance for instructors,
discussion leaders, or speakers, to ensure that such activities meet
the objectives of the continuing broker education requirement. Due to
resource constraints, CBP is not well positioned to administer the
accreditation of training and educational activities. Thus, CBP,
through the Office of Trade, is proposing to select accreditors who
will review and approve or deny such training or educational activities
for continuing education credit. Below is a description of the
selection process, which is outlined in proposed Sec. 111.103(c), and
the accreditation process, which is outlined in paragraphs (d) and (e)
of proposed Sec. 111.103.
1. Selection of Accreditors
As reflected in proposed Sec. 111.103(c), CBP is proposing to
select third-party accreditors using common government contracting
procedures, which would include the issuance of a Request for
Information (RFI) and a Request for Proposal (RFP). CBP would
administer this process through the Office of Trade in accordance with
the requirements of the Federal Acquisition Regulation (48 CFR chapter
1) (the FAR). While selected accreditors would administer the
accreditation of the training or educational activities as part of
their contractual relationship with CBP, selected accreditors would not
receive a monetary award from CBP as a result of this contractual
relationship. However, selected accreditors would be permitted to
charge content providers for their services to recoup their expenses in
reviewing and approving or denying training or educational activities
for continuing education credit, as long as the fees are clearly
displayed on the accreditors' website and materials. The remainder of
this section lays out the basic framework that CBP is proposing for the
review and approval of potential accreditors. The specific obligations
that accreditors under contract with CBP would be required to meet
would be provided in more detail in the RFI, and then in even more
granular detail, in the RFP.
Because this is a new program for both CBP and the customs broker
community, CBP plans to initiate the selection process through the
issuance of an RFI. The RFI would be posted in the System for Award
Management (available at https://sam.gov/SAM/) (SAM).\15\ The RFI would
lay out the basic criteria that CBP believes a future accreditor must
meet in order to successfully review activities for continuing
education credit. Currently, CBP expects to propose the following
criteria:
---------------------------------------------------------------------------
\15\ SAM is a U.S. Government website operated by the General
Services Administration (GSA), 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.
---------------------------------------------------------------------------
At least one key official in the entity must have a
customs broker's license;
A demonstrated knowledge of international trade laws,
customs laws and regulations, and general customs practices for
imported goods and goods subject to drawback;
A demonstrated knowledge of other U.S. 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
a training or educational 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 or deny trainings or educational activities 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; and
An estimate of the charge, if any, for approving/denying
an activity under consideration for accreditation.
Based on these criteria, along with other details that would be
provided in the RFI, CBP would then hold an ``industry day'' with
interested parties. As CBP-selected accreditors would not receive a
monetary award from CBP, CBP anticipates that trade associations and
law firms specializing in customs matters will make up the majority of
parties interested in becoming CBP-selected accreditors. However, CBP
encourages all interested parties to participate in the RFI process as
it will provide interested parties with an opportunity to provide input
that will shape the accreditation process. As part of this industry
day, CBP would present its needs and expectations for the accreditation
process and receive input on its initial proposal from parties that are
potentially interested in providing accreditation services. This
information would then be used to refine the above-listed criteria and
prepare an RFP. CBP would then post the RFP in SAM. Following the
publication of the RFP, interested parties would then respond with
their proposals of how they would administer the accreditation process
based on the criteria set forth in the RFP. A party that participated
in the RFI process would be under no obligation to put forth a response
to the RFP. Conversely, if a party interested in applying to become an
accreditor did not respond to the RFI or participate in the industry
day process, that party would not be precluded from responding to the
RFP. CBP is not proposing an ``application fee'' for interested parties
to submit a response to the RFP (fees to submit responses to RFPs are
not permitted under the FAR).
[[Page 50806]]
In addition to the publication of the RFI and RFP in SAM, CBP is
proposing to announce the availability of the RFI and RFP through the
publication of notices in the Federal Register by the Executive
Assistant Commissioner, Office of Trade. This would ensure that the
requests reach as wide an audience as possible, including parties that
do not traditionally contract with the U.S. Government. In accordance
with the provisions of proposed Sec. 111.103(c), these Federal
Register notices would contain information pertaining to the criteria
that the Office of Trade will use to select an accreditor and the
period during which CBP will accept applications by potential
accreditors.
Following the issuance and publication of the RFP, CBP would review
the proposals received and rate them based on the factors provided in
the relevant section of the RFP. Based on these ratings, CBP would then
select the accreditors approved for that cycle. Parties not selected
for the cycle would have the opportunity to protest CBP's decision in
accordance with the procedures set forth in the FAR. Following the
selection of the approved accreditors, the Office of Trade will notify
the approved accreditors of their award, and the Executive Assistant
Commissioner, Office of Trade, will publish a notice in the Federal
Register to inform the public and the customs broker community of the
parties approved to provide accreditation services. In accordance with
the provisions of proposed Sec. 111.103(c), this Federal Register
notice would contain information pertaining to the selected
accreditors' period of award.
CBP is not proposing to set a target or a limit on the number of
accreditors. Rather, the number will be determined by the strength of
the proposals received and CBP's needs at the time of the RFP. CBP is
proposing to introduce a period of award of three years, subject to
renewal. This will provide CBP-selected accreditors with sufficient
time to establish their accreditation programs and to begin with the
accreditation of educational content while not creating a long period
of time during which new interested parties would have to wait for the
next selection cycle. In accordance with the provisions of the FAR,
either party to the contract--whether the accreditor or CBP--would be
permitted to terminate the contract with 30-days' notice. If an
accreditor were to leave the program, the Executive Assistant
Commissioner, Office of Trade, would publish a notice in the Federal
Register announcing the departure.
Once awards have been made for the first cycle of accreditors, CBP
envisions working closely with them--as a group and as individual
parties--to provide directions and instructions, set expectations,
develop due dates and milestones, and create a public outreach campaign
to inform the affected customs broker community of the new program and
opportunities. Once the program has been fully implemented, the Broker
Management Branch within the Office of Trade will meet with the
accreditors periodically to identify and exchange best practices,
address areas of concern, and develop program metrics that can be
shared with COAC and other members of the public as needed. Following
the first 3-year cycle, CBP will announce the opening of a new
application cycle through posts in SAM, and the Executive Assistant
Commissioner, Office of Trade, will publish a notice in the Federal
Register to the same effect.
CBP believes the approach outlined above will meet the following
objectives, which CBP believes to be key to the program's success:
1. Multiple approved accreditors, which will 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, such as law firms that
specialize in customs law, and non-profit organizations, such as trade
associations, to become approved accreditors.
2. Accreditation Process
Proposed Sec. 111.103(d) and (e) pertain to the administration of
the accreditation process, including the responsibilities of CBP-
selected accreditors. Proposed Sec. 111.103(d) reflects that CBP-
selected accreditors will administer the accreditation of training or
educational activities offered by an entity other than a U.S.
Government agency, including the special allowance for instructors,
discussion leaders, and speakers, by reviewing and approving or denying
training or educational activities for continuing education credit. The
accreditation process may vary slightly among CBP-selected accreditors
(e.g., fees, timeframe for the review and issuance of an accreditation
decision, address to which paper-based accreditation requests must be
submitted, and the documents that must be submitted as part of the
accreditation request); however, each accreditor will be required to
administer the accreditation process within the bounds of a defined set
of parameters. These parameters will be defined as part of the RFP. For
example, CBP is expecting that, as a result of this process, CBP-
selected accreditors will be required to: (1) Provide an electronic
means for a content provider to submit the details of an activity under
consideration; (2) state the average or typical processing time for an
accreditation request; and (3) clearly state any charges for the review
and approval or denial of an accreditation request.
Although the accreditation process will be defined in more detail
as part of the selection process, paragraphs (d) and (e) of proposed
Sec. 111.103 contain two requirements. First, in order to ensure that
qualifying continuing broker education programs present educational
content that is current and relevant, proposed Sec. 111.103(d)
provides that an accreditor's approval of a training or educational
activity for continuing education credit is only valid for one year,
but can be renewed through any CBP-selected accreditor. As CBP's
proposal does not require individual brokers to complete a specific
number of hours of continuing education on specific subject matter
areas, CBP has chosen to propose to limit the validity of
accreditations to one year. CBP believes that this limitation would
ensure that content providers regularly update educational content,
and, thereby, ensure that qualifying continuing broker education offers
educational content that is current and relevant. Second, while a CBP-
selected accreditor could approve a training or educational activity
offered by one of its officials or members for continuing education
credit, proposed Sec. 111.103(e) provides a CBP-selected accreditor
may not approve its own trainings or educational activities for
continuing education credit. This will require CBP-selected accreditors
who are also content providers to seek another CBP-selected
accreditor's approval in order for educational content to be eligible
for continuing education credit. CBP is proposing this limitation to
curb the risk of conflicts of interest and self-dealings.
In order to promote transparency and the accreditors' compliance
with their contractual obligations, CBP also intends to provide content
providers and instructors, discussion leaders, and speakers seeking to
claim continuing education credits under the special allowance with an
opportunity to submit complaints and comments to the Office of Trade at
the Headquarters of U.S. Customs and Border Protection, Attn: Broker
Management Branch, electronically. CBP intends to publish additional
information on how to submit complaints and comments concerning
specific CBP-selected
[[Page 50807]]
accreditors, including the email address to which such electronic
correspondences should be submitted, on its website. CBP plans to
request that content providers (and instructors, discussion leaders,
and speakers seeking to claim continuing education credits under the
special allowance) who submit a complaint pertaining to the denial of a
specific accreditation adhere to the following procedures. First, the
content provider (and instructors, discussion leaders, and speakers
seeking to claim continuing education credits under the special
allowance) should contact the CBP-selected accreditor to request a
detailed explanation as to the denial of the accreditation request.
Second, if following the receipt of the detailed explanation, the
content provider (and instructors, discussion leaders, and speakers
seeking to claim continuing education credits under the special
allowance) continues to believe that the denial was in error, the
content provider should submit a complaint to CBP, including (1) a copy
of all materials that were submitted to the accreditor for
consideration, (2) any materials received from the accreditor that
explain why the activity was rejected, and (3) a detailed explanation
as to why the content provider believes the denial decision to be
erroneous.
In order to ensure the successful implementation of the proposed
continuing education requirement, CBP will also welcome any other type
of feedback, such as feedback on accreditor performance and customer
experience, positive interactions, and areas for improvement. CBP plans
to compile and share such feedback during the sessions that CBP intends
to hold with the accreditors on a periodic basis.
F. Timeframe for the Implementation of the Proposed Changes
This NPRM provides for a public comment period of 60 days. Upon the
review of the comments and further consideration, CBP will prepare a
final rule. The final rule will adopt the current proposal as final,
with or without changes based on consideration of the public comments,
and will provide the date on which the changes will become effective.
In addition to the 30-day delayed effective date required under the
Administrative Procedure Act (5 U.S.C. 553(c)), CBP anticipates that
there will be an additional delay between the publication of the final
rule and the effective date to allow for proper implementation of the
continuing education framework.
As CBP's proposal requires some training and educational activities
to be approved for continuing education credit by a CBP-selected
accreditor, a delayed effective date will be needed in order to permit
for sufficient time for the selection of qualified accreditors, for
CBP-selected accreditors to set up their processes for reviewing
accreditation requests, and for content providers to obtain
accreditation for their training or educational activities. CBP will
ensure that there will be adequate time for compliance by individual
brokers if the proposed rule is adopted. For example, in addition to a
delayed effective date, CBP may also select an effective date for the
final rule that coincides with the beginning of a new triennial period
or prorate the number of continuing education credits individual
brokers must complete by the end of the triennial period during which
the final rule becomes effective.
V. Statutory and Regulatory Requirements
A. Executive Orders 12866 and 13563
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 proposed rule is not a ``significant regulatory
action,'' under section 3(f) of Executive Order 12866. Accordingly, the
Office of Management and Budget (OMB) has not reviewed this regulation.
CBP has prepared the following analysis to help inform stakeholders of
the impacts of this proposed rule.
1. Purpose of Rule
The proposed rule, if implemented, would require active \16\
individual customs broker license holders (brokers) to complete 36
hours of continuing education every three years. A continuing education
requirement would increase the knowledge base from which brokers work,
educate them on changing customs requirements, regulations, and laws,
and reduce the number of errors in filings and resultant penalties. CBP
believes that requiring continuing education would enhance the
credibility and value of an individual customs broker license and
improve a broker's skills, performance, and productivity. Furthermore,
CBP believes that mandating continuing education would increase the
quality of service for brokers' clients and importers' compliance with
customs laws, which would protect the revenue of the United States and
aid in maintaining a high standard of professionalism in the customs
broker community.
---------------------------------------------------------------------------
\16\ The term ``active'' refers to a license that has not been
suspended.
---------------------------------------------------------------------------
2. Background
On October 28, 2020, CBP published an ANPRM, entitled ``Continuing
Education for Licensed Customs Brokers'', in the Federal Register (85
FR 68260). The ANPRM presented a basic outline for a continuing
education requirement for licensed customs brokers and posed questions
pertaining to the potential costs and benefits of such a requirement.
Some of the public comments that CBP received in response to the ANPRM
addressed the questions pertaining to the potential costs and benefits
of such a requirement, although very few contained specific information
or data. Any information that was provided on these issues was taken
into account in formulating this analysis. In this NPRM, CBP is
proposing a continuing education requirement for individual brokers.
i. Customs Brokers
A customs broker assists clients with the importation of goods into
the United States, and also with the filing of drawback claims. Customs
brokers can be individuals, partnerships, associations, or corporations
and must be licensed by CBP. Brokers are responsible for helping
clients to meet all relevant requirements for importing and submitting
drawback claims, submitting information and payments to CBP on their
client's behalf, and exercising responsible supervision and control
over their employees and customs business.\17\ Only licensed customs
brokers may perform customs business.\18\ Brokers may have expertise
[[Page 50808]]
in any number of trade-related areas, including entry, admissibility,
classification, valuation, and duty rates for imported goods. Some
brokers specialize in a specific area of customs business, like
drawback or valuation, while others are more general practitioners. As
of 2021, there are 13,822 active individual brokers in the United
States.\19\
---------------------------------------------------------------------------
\17\ For more details on responsible supervision and control,
see 19 U.S.C. 1641(b)(4), as well as 19 CFR 111.1 and 111.28.
\18\ Customs business is defined as: those activities involving
transactions with U.S. Customs and Border Protection concerning the
entry and admissibility of merchandise, its classification and
valuation, the payment of duties, taxes, or other charges assessed
or collected by U.S. Customs and Border Protection upon merchandise
by reason of its importation, or the refund, rebate, or drawback
thereof. It also includes the preparation of documents or forms in
any format and the electronic transmission of documents, invoices,
bills, or parts thereof, intended to be filed with U.S. Customs and
Border Protection in furtherance of such activities, whether or not
signed or filed by the preparer, or activities relating to such
preparation, but does not include the mere electronic transmission
of data received for transmission to CBP. See 19 U.S.C. 1641(a)(2).
\19\ A customs broker may voluntarily suspend his or her license
for a number of reasons and may re-activate the license at a later
time. A broker's license may also be suspended as part of a penalty.
For more information, see 19 CFR 111.52.
---------------------------------------------------------------------------
To become a licensed customs broker, an eligible individual \20\
must pass the Customs Broker License Examination, submit a broker
license application and appropriate fees to CBP, and be approved by
CBP.\21\ Once applicants have passed the broker exam, they may apply
for an individual, corporate, partnership, or association license. To
maintain the license, the individual broker or the licensed entity (for
corporations, partnership, or associations) must submit a triennial
report and requisite fees. The triennial report and fees are due on
February 28, every three years, since 1985.\22\ Once an individual has
been approved as a licensed customs broker, the primary ongoing
requirement for maintaining the license under current regulations is
the submission of the triennial report and appropriate fee in 3-year
cycles. Given the established 3-year cycle of triennial reporting, CBP
employs a 6-year period of analysis to calculate costs and benefits
that result from this proposed rule, accounting for two triennial
cycles.
---------------------------------------------------------------------------
\20\ To be eligible, an individual must be a United States
citizen at least 21 years of age, in possession of good moral
character, and not be an employee of the U.S. Government. For more
information, see U.S. Customs and Border Protection, Becoming a
Customs Broker (Dec. 12, 2018), available at https://www.cbp.gov/trade/programs-administration/customs-brokers/becoming-customs-broker.
\21\ To be approved, a broker who has passed the broker exam
must also pass an investigation of his or her relevant background.
See section III.B. of this NPRM.
\22\ 19 CFR 111.30(d). For more information on the triennial
report, see U.S. Customs and Border Protection, 2021 Customs Broker
Triennial Status Report FAQs (Feb. 26, 2021), available at https://help.cbp.gov/s/article/Article-1711?language=en_US.
---------------------------------------------------------------------------
A broker license may be suspended or revoked, or a monetary penalty
assessed, for several violations ranging from falsifying information on
the license application to willfully and intentionally deceiving,
misleading, or threating a client.\23\ CBP generally assesses monetary
penalties for less serious infractions, such as the incorrect filing of
entry forms or the misclassification of goods. However, the majority of
civil monetary penalties assessed against brokers for violations of 19
U.S.C. 1641 involve egregious violations or the failure to take
satisfactory corrective actions following written notice and a
reasonable opportunity to remedy the deficiency as the penalties
process provides noncompliant brokers with several opportunities to
avoid or mitigate penalty liability.\24\ Monetary penalties may not
exceed $30,000 per violation and averaged $22,697 from 2017-2020.\25\
---------------------------------------------------------------------------
\23\ See, e.g., 19 U.S.C. 1641(d)(1) and (g)(2).
\24\ In the case of non-egregious violations, CBP will first
attempt to work with the broker through the informed compliance
process of communication and education. See U.S. Customs and Border
Protection, Electronic Invoice Program (EIP) and Remote Location
Filing (RLF) Handbook (May 2013), p. 22, available at https://www.cbp.gov/sites/default/files/assets/documents/2016-Dec/Revised_eip_rlf_handbook_12-15_16.pdf. This is an attempt to improve
the broker's performance, and precedes the issuance of a pre-penalty
notice, which is a written notice that advises the broker of the
allegations or complaints against the broker. See id.; 19 CFR
111.92(a). If this process fails to remedy the deficiencies, or in
case of egregious violations, CBP will issue a pre-penalty notice to
the broker, which, inter alia, explains that the broker has the
right to respond to the allegations or complaints. See 19 CFR
111.92(a). If the broker files a timely response to the pre-penalty
notice, CBP will either cancel the case, issue a penalty notice in
an amount lower than that provided in the pre-penalty notice, or
issue a penalty notice in the same amount as the pre-penalty notice.
See 19 CFR 111.92(b). Upon the issuance of the penalty notice, the
broker is afforded the opportunity to file a petition for relief in
accordance with the provisions of 19 CFR part 171, which may result
in the cancellation or mitigation of the penalty, and subsequently a
supplemental petition for relief. See 19 CFR 111.93 and 111.95.
\25\ 19 U.S.C. 1641(d)(2)(B). Penalty information comes from
CBP's Seized Currency and Asset Tracking System (SEACATS). Although
the average value of assessed penalty is $22,697, CBP allows brokers
to mitigate penalties, such that the amount collected is often
significantly less, averaging $2,664 from 2017-2020.
---------------------------------------------------------------------------
In the fiscal years from 2017 to 2020, CBP assessed an average of
66 penalties to brokers per year.\26\ However, in FY 2017 and FY 2018,
CBP assessed 20 and 21 penalties, respectively, while in FY 2019 and FY
2020, CBP assessed over 100 penalties each year (see Table 1). The
significant increase in penalties from 2018 to 2019 and into 2020 is
likely due to rapid changes in the international trade environment in
those years. During that time, CBP began enforcing several significant
changes in the realm of international trade, including new antidumping
and countervailing duties (AD/CVD) and the tariffs imposed by the Trump
Administration under section 201 of the Trade Act of 1974 (19 U.S.C.
2251), as amended, section 232 of the Trade Expansion Act of 1962 (19
U.S.C. 1862), as amended, and sections 301 through 310 of the Trade Act
of 1974 (19 U.S.C. 2411 et seq.), as amended.\27\ These changes
affected a significant number of imported goods. CBP provided many
opportunities for individual brokers to learn about the changes,
including webinars, Question and Answer sessions, public forums, and
Federal Register notices. External organizations, like regional broker
associations, also provided information regarding these changes to the
customs laws, which would have led to greater understanding for
individual brokers.
---------------------------------------------------------------------------
\26\ SEACATS.
\27\ Trade remedies implemented by CBP include Section 201 trade
remedies on solar cells and panels, and washing machines and parts;
Section 232 trade remedies on aluminum and steel; Section 232 trade
remedies on derivatives; Section 301 trade remedies to be assessed
on certain goods from China; and Section 301 trade remedies to
enforce U.S. rights in the large civil aircraft dispute before the
World Trade Organization. See U.S. Customs and Border Protection,
Trade Remedies, available at https://www.cbp.gov/trade/programs-administration/trade-remedies (last visited on May 11, 2021).
---------------------------------------------------------------------------
Although CBP sought information in the ANPRM on the number of
companies employing brokers who already complete continuing education,
CBP did not receive enough specific information to estimate the
proportion of companies already providing ongoing training. However,
based on information gathered via self-reporting by individual brokers,
CBP is aware of about 300 companies that employ at least one broker who
holds an industry certification that requires annual continuing
education.\28\ In the fiscal years from 2017 to 2019, those companies
were responsible for 54 percent of the entries but only 10 percent of
the penalties.\29\ Overall, these 300 companies filed 73,906,967 of
136,466,361 filed entries between 2017 and 2020, but only account for
26 of 267 total penalties assessed in that period.\30\ For companies
outside of this group, CBP does not know how much continuing education
is currently taken.
---------------------------------------------------------------------------
\28\ Information was provided by the National Customs Broker and
Forwarders Association of America (NCBFAA). Nine companies employ at
least 48 brokers certified by programs provided by the NCBFAA's
Education Institute (NEI), and often employ more. An additional 292
companies employing at least one broker with an NEI certification
were identified via a survey of NEI's students.
\29\ Significant at the 99 percent confidence level.
\30\ Entry data was pulled from ACE, and penalty data from
SEACATS.
[[Page 50809]]
Table 1--Annual Penalties Assessed by CBP
------------------------------------------------------------------------
Number of
FY penalties
------------------------------------------------------------------------
2017.................................................... 20
2018.................................................... 21
2019.................................................... 119
2020.................................................... 106
------------------------------------------------------------------------
ii. Continuing Education
Continuing education refers to the training and learning pursued by
professionals outside of the formal education system, usually as part
of career development. Many licensed professions have some sort of
continuing education requirement for license-holders, including
accountants, medical professionals, and teachers.\31\ Continuing
education is particularly important for professions characterized by
continuously changing rules, standards, and norms. Customs and
international trade is one such profession. Since 2000, the United
States has added two new preferential trade programs and several new
free trade agreements, the most recent being the USMCA, which replaced
the NAFTA.\32\ Additionally, the logistical aspects of customs have
changed significantly over time. For example, CBP introduced the single
window, enabling most CBP forms to be submitted electronically through
the Automated Commercial Environment (ACE), which was fully implemented
in 2016, with added functionalities being deployed on an ongoing basis.
---------------------------------------------------------------------------
\31\ The number of hours of continuing education required for
many professions varies by state as the state is the licensing
authority.
\32\ In October 2000, the United States implemented the
Caribbean Basin Trade Partnership Act, which will expire in 2030
(https://www.cbp.gov/trade/priority-issues/trade-agreements/special-trade-legislation/caribbean-basin-initiative/cbtpa). The African
Growth and Opportunity Act was also enacted in 2000 (https://ustr.gov/issue-areas/trade-development/preference-programs/african-growth-and-opportunity-act-agoa). See https://www.state.gov/trade-agreements/outcomes-of-current-u-s-trade-agreements/ for a list of
free trade agreements currently in force.
---------------------------------------------------------------------------
There have been several other significant changes to the customs
environment, including the implementation of TFTEA, changes in duty
rates and tariffs, and the modernization of the drawback
requirements.\33\ Customs brokers must maintain awareness of and adapt
to these changes to provide quality service to clients. However, aside
from the broker exam at the beginning of their careers, brokers do not
currently have any requirements ensuring they maintain up-to-date
knowledge of customs rules, regulations, and practices. As stated
above, CBP believes that the vigorous pace and expanding scope of
international trade require a more stringent continuing education
framework for individual brokers who provide guidance to importers and
drawback claimants.
---------------------------------------------------------------------------
\33\ See section III.C. of this NPRM.
---------------------------------------------------------------------------
The effects of continuing education programs are not easily
measured and not often the subject of research.\34\ Some studies show
that various licensed professions do see a mild increase in positive
perception of their industry, performance, and professionalism after
the implementation of continuing education requirements.\35\ Studies
have also demonstrated a positive link between continuing education for
teachers and student outcomes as well as between continuing medical
education and patient outcomes.\36\ Additionally, one study found that
continuing professional education was correlated to an improvement in
financial outcomes for accounting firms, particularly large firms.\37\
Finally, a study of IRS-certified tax preparers found that mandatory
continuing education was potentially linked to reduced civil penalties,
a decrease in non-compliance, and increased accuracy of tax
returns.\38\
---------------------------------------------------------------------------
\34\ ``Evaluation of Current Customs Broker Continuing Education
Practices and Literature Review of Continuing Education in Other
Professions.'' Report for CBP prepared by International Economics,
Inc. (IEc) on June 30, 2014. This document is included in the docket
for this NPRM, which is posted on Regulations.gov.
\35\ See Bradley, S., Drapeau, M. and DeStefano, J. (2012), The
relationship between continuing education and perceived competence,
professional support, and professional value among clinical
psychologists. J. Contin. Educ. Health Prof., 32: 31-38; O'Leary, P.
F., Quinlan, T. J., & Richards, R. L. (2011). Insurance
Professionals' Perceptions of Continuing Education Requirements.
Journal of Insurance Regulation, 30, 101-117; and Wessels, S.
(2007). Accountants' Perceptions of the Effectiveness of Mandatory
Continuing Professional Education. Accounting Education, 16(4), 365-
378.
\36\ Darling-Hammond, L., Hyler, M.E., and Gardner, M. (2017).
Effective Teacher Professional Development. Learning Policy
Institute; Cervero, R. M., & Gaines, J.K. (2014). Effectiveness of
continuing medical education: updated synthesis of systematic
reviews. Accreditation Council for Continuing Medical Education.
\37\ Chen, Y.-S., Chang, B.-G., & Lee, C.-C. (2008). The
association between continuing professional education and financial
performance of public accounting firms. International Journal of
Human Resource Management, 19(9), 1720-1737.
\38\ Diehl, K. A. (2015). Does Requiring Registration, Testing,
and Continuing Professional Education for Paid Tax Preparers Improve
the Compliance and Accuracy of Tax Returns?--US Results. Journal of
Business & Accounting, 8(1), 138-147.
---------------------------------------------------------------------------
Under the terms of the proposed rule, individual brokers would be
required to complete 36 hours of accredited continuing education over
each 3-year reporting period. Qualifying activities would include
attending or presenting at events, such as courses, seminars, symposia,
and conventions.\39\ Brokers would be required to self-attest to the
completion of the required continuing education on each triennial
report and maintain records consisting of certain documentation
received from the provider or host of the qualifying continuing broker
education, if such documentation was made available to the broker, and
containing information pertaining to the dates, titles, providers,
credit hours earned, and location (if applicable) for each training.
The records can be in any format (i.e., electronically or on paper),
and the proposed regulations provide CBP with authority to conduct a
compliance audit and to request such records for a period of three
years following the submission of the status report.
---------------------------------------------------------------------------
\39\ See proposed 19 CFR 111.103(a).
---------------------------------------------------------------------------
iii. Accreditation
To ensure the quality and relevance of continuing education
offerings, they are often accredited by a leading body within the field
in question. For example, the American Medical Association (AMA) is
accredited to provide training by the Accreditation Council for
Continuing Medical Education.\40\ An accreditor is responsible for
reviewing course content and determining the number of credits or hours
to be granted for each course.
---------------------------------------------------------------------------
\40\ See American Medical Association, About the AMA's CME
Accreditation, available at https://edhub.ama-assn.org/pages/ama-cme
(last accessed on May 11, 2021).
---------------------------------------------------------------------------
Under the proposed rule, after an application process (using the
RFP, as described above), CBP would designate entities outside of CBP
to act as accreditors for customs broker continuing education. Every
three years, CBP would release an RFP soliciting applications to become
an accreditor for the customs broker continuing education program.
Every three years following the first cycle, existing accreditors would
also apply for renewal. To apply, potential and existing accreditors
would submit an application to CBP detailing their standards for
accreditation, quality control practices, application process, and
other information. A panel of CBP experts would convene to review and
approve or deny applications. Once approved, accreditors could begin
accepting submissions from courses or companies seeking accreditation.
Note that training or educational activities offered by U.S. Government
agencies, including CBP, automatically qualify for
[[Page 50810]]
continuing education credit, without the approval by a CBP-selected
accreditor.\41\
---------------------------------------------------------------------------
\41\ Per proposed Sec. 111.103(a)(1)(i), a training or
educational activity offered by a U.S. Government agency other than
CBP must be relevant to customs business.
---------------------------------------------------------------------------
iv. Performance Improvement
Once brokers have passed the broker exam, thereby proving their
basic knowledge and competency to perform the duties of a licensed
customs broker at the time of the exam, they are free to practice in
perpetuity unless the license is suspended or revoked. Statute dictates
that while practicing under the auspices of his or her broker license,
a customs broker must maintain responsible supervision and control.\42\
CBP's regulations likewise place additional legal obligations upon
customs brokers, including, but not limited to, the requirement for
exercising due diligence in making financial settlements, answering
correspondence, and preparing or assisting in the preparation and
filing of information relating to customs business.\43\ Staying current
on developments in customs law is needed for customs brokers to comply
with their legal obligations, but presently there are no standards for
how much continuing education is needed.
---------------------------------------------------------------------------
\42\ See 19 U.S.C. 1641(b)(4).
\43\ See 19 CFR 111.29(a), and 19 CFR part 111 generally for
additional obligations.
---------------------------------------------------------------------------
Under baseline conditions, meaning the world as it is now, CBP does
not require brokers to complete any additional training or prove their
ongoing knowledge. The broker exam only attests knowledge of customs
and related laws that are in place at the time of the exam. While the
exam ensures that brokers have a solid base level of knowledge when
they begin practicing, there is no requirement that they keep up the
knowledge, and evidence suggests that as more time passes since brokers
took their exam, the more errors they make. Brokers who were assessed
penalties by CBP between 2017 and 2020 have held their individual
broker license for, on average, 37 years. In contrast, the average
individual broker license is 24 years old. This suggests that as more
time passes since the passing of the customs broker exam, more errors
are made. Furthermore, the exam does not test for any of the
requirements of the more than 40 PGAs involved in regulating imports.
Depending on the brokers' needs, CBP believes that continuing education
should also include courses relating to the PGAs' international trade
requirements, although there is no minimum requirement for certain
subject matters in this proposed rule.
Given the often fast-paced and evolving nature of the international
trade environment, CBP believes that a continuing education requirement
would help to ensure that brokers remain current with their
understanding of international trade laws and continue to expand their
knowledge of customs regulations and practices. A more competent and
educated customs broker community would also prevent costly errors,
potentially saving brokers' clients time and money, as well as
relieving CBP from expending valuable audit and penalty assessment and
collection resources.
3. Overview of Assessment
The proposed rule would result in costs and benefits for customs
brokers, accreditors, providers of continuing education, and CBP. Many
of the costs for brokers come in the form of time spent researching,
registering for, attending, and reporting trainings. Brokers would also
experience some opportunity cost as they forgo time spent on other
tasks in favor of fulfilling a continuing education requirement.
Accreditors must apply to CBP. Though CBP would not charge a fee, the
accreditors would need to spend time in creating their applications.
Similarly, providers of continuing education must apply to accreditors
to have their coursework certified. Finally, CBP must designate
accreditors, and, following the full implementation of the proposed
framework, CBP may audit individual brokers for compliance.
The benefits from the proposed rule would be largely qualitative. A
continuing education requirement would help to professionalize and
improve the reputation of the customs broker community, as well as to
improve customer service and outcomes. Quantitatively, continuing
education would likely lead to a reduction in errors in documentation
and associated penalties assessed by CBP for some infractions and
violations. Not only would individual brokers not need to pay the
associated penalties, but CBP would save the time of identifying,
assessing, and collecting such penalties. Similarly, CBP would likely
see a reduction in regulatory audits of individual brokers.
4. Historical and Projected Populations Affected by the Rule
The proposed rule applies to any individual holding an active
customs broker license.\44\ Brokers who have voluntarily suspended
their licenses are not required to complete continuing education until
they elect to reactivate their license, at which point the requirements
are pro-rated depending upon the timing within the triennial reporting
cycle. Brokers who have not held their license for an entire triennial
period at the time their first triennial report is due are also
exempted from completing training and reporting in their first
triennial report, though are bound by the terms of the proposed rule in
the following years. As of 2021, there are 13,822 active, individual
broker licenses.\45\ Because 2021 is a reporting year and triennial
reports are due in February, those brokers who receive their licenses
in 2021, 2022, and 2023 will only be required to complete continuing
education beginning on February 1, 2024, the next reporting year.\46\
Similarly, brokers who receive licenses in 2024, 2025, and 2026 would
not need to pursue continuing education until after their first report
is due in 2027.
---------------------------------------------------------------------------
\44\ Entities holding corporate, association, or partnership
licenses must employ at least one individual broker, who would be
required to comply with the rule. See 19 CFR 111.11(a) and (b).
\45\ 2021 is triennial reporting year. The CBP Broker Management
Branch anticipates that the number of active, individual customs
brokers could decrease by approximately 600-1,000 in May-July of
2021 as brokers choose not to renew or to voluntarily suspend their
licenses. This number would be partially offset by new, individual
customs brokers applying for licenses after passing the broker exam,
which is held bi-annually.
\46\ Triennial reports are due in February. Therefore, all those
brokers who receive licenses in 2021, 2022, and 2023 will submit
their first triennial reports in February of 2024 and would then
need to complete 36 hours of training before the triennial report is
due in February of 2027.
---------------------------------------------------------------------------
CBP approves approximately 600 new licenses per year, although the
number of licenses added annually has been decreasing since 2015. See
Table 2 for a summary of licensing history for the previous six years.
[[Page 50811]]
Table 2--Licensing History From 2015-2020
----------------------------------------------------------------------------------------------------------------
Total licenses Corporate Individual
Year \47\ licenses licenses
----------------------------------------------------------------------------------------------------------------
2015............................................................ 770 16 754
2016............................................................ 653 21 632
2017............................................................ 580 16 564
2018............................................................ 558 27 531
2019............................................................ 464 15 449
2020 \48\....................................................... 187 7 180
-----------------------------------------------
Total....................................................... 3,212 102 3,110
----------------------------------------------------------------------------------------------------------------
Based on an average rate of decline of 12 percent in the number of
individual licenses issued, CBP would likely issue 1,754 new individual
licenses over a 6-year period of analysis from 2021-2026 (see Table 3),
though not all of those license holders would be required to complete
continuing education during the 6-year period of analysis. Each of
these new individual license holders would need to comply with the
terms of the proposed rule once it is in effect and they have completed
their first triennial report. All 13,822 individual brokers active at
the time the rule is implemented would be required to complete
continuing education from February 1, 2021-February 1, 2024.\49\ In
2024, the 1,045 individual brokers who CBP projects would receive
licenses from 2021-2023 would need to begin complying with the terms of
the proposed rule. Brokers who receive licenses in 2024-2026 would not
need to comply with the proposed rule until after their first triennial
reporting cycle, which would fall outside of the period of analysis. In
total, therefore, CBP estimates that 14,867 brokers would be required
to abide by the rule in the six years from 2021 to 2026.
---------------------------------------------------------------------------
\47\ CBP sometimes issues licenses that are later suspended or
terminated (either voluntarily or as a penalty). This table includes
all licenses issued in these years that remain active as of 2021, as
only holders of an active license would need to abide by the terms
of the rule.
\48\ The number of licenses applied for and issued in 2020 was
significantly lower than in previous years due to the effects of the
COVID-19 pandemic and related closures and delays. CBP excluded this
year from calculations of growth rates due to its anomalous nature.
2021 may also be affected similarly, but CBP cannot predict to what
extent.
\49\ The exact timing of the requirement will vary depending on
when the final rule goes into effect, and the requirement will be
prorated based on the time left until the triennial report is due.
For the purposes of this analysis, we estimate the costs for the
hypothetical period from 2021-2027.
Table 3--Projected Licenses Issued from 2021-2026
----------------------------------------------------------------------------------------------------------------
New licenses
Year Total licenses Corporate Individual affected by
issued licenses licenses the rule
----------------------------------------------------------------------------------------------------------------
2021............................................ 408 13 394 0
2022............................................ 358 12 346 0
2023............................................ 315 10 304 0
2024............................................ 276 9 267 1,045
2025............................................ 243 8 235 0
2026............................................ 213 7 206 0
---------------------------------------------------------------
Total....................................... 1,812 59 1,754 1,045
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
Although the majority of active individual brokers would be
required to complete continuing education under the proposed rule,
feedback from the broker community indicates that many brokers already
complete the amount of continuing education that would satisfy this
requirement.\50\ Many companies that employ brokers provide and require
in-house training and continuing education. Both independent brokers
and brokers employed by brokerages often attend government-sponsored
webinars, as well as trade conferences and symposia, which would
qualify as continuing education under the terms of the proposed rule.
Many brokers also pursue professional certifications like the National
Customs Brokers and Freight Forwarders Association of America's
(NCBFAA) Certified Customs Specialist (CCS) and Certified Export
Specialist (CES).\51\ Under the baseline, or the world as it is now,
these brokers likely would be in compliance with the proposed rule and,
assuming similar activities if a continuing education requirement is
imposed, would not incur new costs under the new requirements, except
for new reporting costs.
---------------------------------------------------------------------------
\50\ Feedback was provided in the form of public comments on the
ANPRM. Additional feedback was provided in various meetings and
discussions between CBP personnel and customs brokers, as well as at
trade conferences and meetings of the Task Force for Continuing
Education for Licensed Customs Brokers, a part of the COAC. See
II.E. Development of the Proposed Continuing Broker Education
Requirement, above.
\51\ We included both brokers qualifying as CCS and CES in our
analysis as the coursework for both has significant overlap and is
relevant to customs business.
---------------------------------------------------------------------------
Overall, CBP estimates that approximately 60 percent of individual
brokers already pursue continuing education and would be in compliance
with the rule.\52\ CBP bases this estimation on several factors. First,
the NCBFAA estimates that approximately 4,456 brokers hold a CCS or CES
in 2020, representing 29 percent of total
[[Page 50812]]
individual brokers.\53\ In order to maintain these professional
certifications, these brokers are required to earn 20 continuing
education credits per year.\54\ Additionally, public comments in
response to the ANPRM, as well as discussions between CBP and various
broker organizations, indicate that most large businesses employing
brokers already provide, and often mandate, internal training and
continuing education. Based on data from the U.S. Census Bureau,
approximately 61 percent of those employed within the Freight
Transportation Arrangement Industry (North American Industry
Classification System (NAICS) code 448510) are not employed by small
businesses. A small business within the Freight Transportation
Arrangement Industry is defined as one whose annual receipts are less
than $16.5 million, regardless of the number of employees.\55\ Table 4
shows the receipts per firm, in millions of dollars, for firms
employing each number of employees.\56\ The average firm within
Categories 7 and 9 has annual receipts of greater than $16.5 million
and is considered a large business. These firms employ 161,463 people,
or approximately 61 percent of the total employees in the industry.
---------------------------------------------------------------------------
\52\ CBP requested information about the proportion of
individual brokers already complying with the rule in the ANPRM.
Although CBP did not receive specific information in the public
comments, several commenters said they would be compliant and
believed that significant numbers of other brokers would be as well.
Many also noted that their companies require their broker employees
to complete continuing education.
\53\ Discussion with officials at the NCBFAA on April 5, 2021.
This includes brokers renewing their certification in 2020, as well
as those becoming certified for the first time. The CCS
certification program requires enough hours of continuing education
to comply with the terms of the proposed rule and the NCBFAA has
expressed interest in becoming an accredited provider.
\54\ See National Customs Brokers & Forwarders Association of
America, Inc., CES FAQs, available at https://www.ncbfaa.org/Scripts/4Disapi.dll/4DCGI/cms/review.html?Action=CMS_Document&DocID=13806&MenuKey=education (last
accessed on July 2, 2021); National Customs Brokers & Forwarders
Association of America, Inc., CCS FAQs, available at https://www.ncbfaa.org/Scripts/4Disapi.dll/4DCGI/cms/review.html?Action=CMS_Document&DocID=13803&MenuKey=education (last
accessed on July 2, 2021).
\55\ Small business size standards are defined in 13 CFR 121.
\56\ United States Census Bureau, ``2017 County Business
Patterns and 2017 Economic Census,'' Released March 6, 2020, https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html.
Accessed March 15, 2021.
\57\ Note that some of the categories are sums of other
categories. For example, Category 8, <500, is a sum of Categories 2,
3, 4, 6, and 7. Thus, Categories 7 and 9 are not consecutive, but
represent all firms employing 100 or more people.
\58\ The Survey of U.S. Businesses (SUSB) from which this data
is taken is conducted in years ending in 2 and 7. Note that
finalized results from the 2017 survey are scheduled for release in
May of 2021.
Table 4--Small Businesses in the Freight Transportation Arrangement Industry
----------------------------------------------------------------------------------------------------------------
Preliminary
Number of receipts (all Receipts per
Employment size \57\ employees firms, firm ($) Small business?
$1,000s) \58\
----------------------------------------------------------------------------------------------------------------
01: Total.............................. 265,192 67,276,572 4,454,222 .......................
02: <5................................. 15,939 6,315,166 708,614 Yes.
03: 5-9................................ 18,025 5,392,992 1,974,732 Yes.
04: 10-19.............................. 20,288 5,870,163 3,851,813 Yes.
05: <20................................ 54,252 17,578,321 1,335,029 Yes.
06: 20-99.............................. 49,477 13,973,780 10,397,158 Yes.
07: 100-499............................ 44,715 10,886,028 30,493,076 No.
08: <500............................... 148,444 42,438,129 2,854,327 Yes.
09: 500+............................... 116,748 24,838,443 105,247,640 No.
----------------------------------------------------------------------------------------------------------------
Given the proportion of brokers working for larger businesses, the
feedback on the ANPRM indicating high rates of compliance, the
proportion of brokers pursing certifications, and input from CBP
subject matter experts who frequently interact with the broker
community, CBP estimates that approximately 60 percent of individual
brokers are already in compliance with the requirements of the proposed
rule and would not face new costs, assuming a continuing level of
similar activity, aside from recordkeeping and reporting, as a result
of the rule's implementation. Based on the likely proportion of brokers
already in compliance, CBP estimates that 5,947 affected brokers, or
approximately 40 percent, would need to come into compliance with the
proposed rule over a 6-year period of analysis (see Table 5). We
request comment on our assumption that 60 percent of brokers already
spend at least 36 hours per 3-year period on continuing education and
that the remaining 40 percent of brokers would need to increase their
training by the full 36 hours triennially to meet the proposed
requirement.
Table 5--Projection of Brokers Affected by the Proposed Rule
----------------------------------------------------------------------------------------------------------------
Total licensed
Year Total licenses Proportion in brokers
compliance (%) affected
----------------------------------------------------------------------------------------------------------------
2021............................................................ 13,822 60 5,529
2022............................................................ 13,822 60 5,529
2023............................................................ 13,822 60 5,529
2024............................................................ 14,867 60 5,947
2025............................................................ 14,867 60 5,947
2026............................................................ 14,867 60 5,947
-----------------------------------------------
Total....................................................... 14,867 .............. 5,947
----------------------------------------------------------------------------------------------------------------
Although individual brokers are the primary party affected by the
terms of the proposed rule, the rule would also have an impact on CBP,
providers of continuing education, and the bodies who accredit
continuing education. Each party would see both costs and benefits
under the proposed rule.
[[Page 50813]]
5. Costs of the Rule
i. To Brokers
The primary cost to individual brokers upon implementation of the
rule would be those costs associated with finding and attending 36
hours of continuing education over a 3-year period. These costs include
time spent researching reputable and relevant trainings, travel and
incidental expenses to attend in-person events like conferences, and
the tuition or fees for the courses themselves. Many brokers might
satisfy the continuing education requirement with training supplied by
their employers. Other brokers, particularly those self-employed or
employed by small businesses, would need to seek external training. For
external training, brokers may attend free webinars, seminars, and
trade events sponsored by CBP, other government agencies, and various
related organizations like local freight forwarder and broker
associations.\59\ Alternatively, brokers might choose paid trainings,
conferences, or symposia, or seek certifications offered by trade
organizations or educational institutions.
---------------------------------------------------------------------------
\59\ For example, the Florida Customs Broker and Forwarders
Association offers both paid and free events. Information on CBP-
hosted webinars can be found at https://www.cbp.gov/trade/stakeholder-engagement/webinars. Many other government agencies also
provide webinars on trade-related topics. For example, in 2020, the
Food and Drug Administration (FDA) hosted a series of webinars on
the importation of medical devices in light of the COVID-19
pandemic. See https://www.fda.gov/medical-devices/workshops-conferences-medical-devices/webinar-series-respirators-and-other-personal-protective-equipment-ppe-health-care-personnel-use.
---------------------------------------------------------------------------
CBP does not know exactly which option each individual broker is
likely to choose. Many brokers already hold certifications, attend
webinars, and fulfill internal training requirements, though they may
need to increase the number of hours completed to comply with the
proposed rule. Therefore, CBP has estimated a range of costs. Some
brokers would fulfill their proposed continuing education requirements
with only free trainings. Others would follow a medium-cost path by
opting for a mix of free, lower-cost, and internal trainings. CBP
further assumes that brokers electing the medium-cost path would travel
to attend one major conference or symposium in-person per year.
Finally, some would meet requirements by completing only paid courses
representing the highest-cost offerings. CBP assumes that brokers
choosing the higher-cost option would travel to attend an average of
two conferences per year.
There are several organizations that provide continuing education
for customs brokers, ranging from regional broker associations to
national entities, such as the American Association of Exporters and
Importers (AAEI). Continuing education that qualifies under the terms
of the proposed rule includes webinars, seminars, and trade
conferences. The hourly cost of such trainings (excluding free events
provided by government agencies and other organizations) usually ranges
from around $25 to $70. Fees are often tiered based on membership of
the hosting organization. Members of an organization may pay $25 while
non-members pay $45. CBP cannot predict which organizations would seek
accreditation for their events, although all free webinars and
trainings hosted by Federal government agencies would be automatically
accredited. Therefore, we assume that the average hourly monetary cost
would range from $0.00 (low) to $30 (medium) to $50 (high). This
assumption is based on current fees charged for various continuing
education certifications, webinars, and trade conferences.\60\
---------------------------------------------------------------------------
\60\ CBP does not have information on the cost for an employer
to provide training internally, although such information was
requested in the ANPRM. CBP believes the cost for internal training
would be closer to that of attending external trainings as a member,
since member fees are likely much closer to base cost of provision
than non-member fees.
---------------------------------------------------------------------------
In addition to fees, individual brokers would need to spend some
time in researching relevant and accredited trainings. CBP assumes that
a broker would spend approximately three hours finding and registering
for continuing education during every triennial period. Many individual
brokers are members of both local and national organizations that
provide continuing education opportunities and would likely be notified
of opportunities via newsletters or listservs. Other individual brokers
would need to spend some time finding and verifying accreditation for
qualifying events. All individual brokers would spend some time
registering for events. Based on an average fully-loaded wage rate of
$31.27, the process of researching and registering for trainings would
cost brokers approximately $2.61 per credit hour.\61\
---------------------------------------------------------------------------
\61\ Wage rate source: U.S. Bureau of Labor Statistics.
Occupational Employment Statistics, ``May 2019 National Occupational
Employment and Wage Estimates, United States.'' Updated March 31,
2020. Available at https://www.bls.gov/oes/2019/may/oes_nat.htm.
Accessed June 12, 2020; U.S. Bureau of Labor Statistics. Employer
Costs for Employee Compensation. Employer Costs for Employee
Compensation Historical Listing March 2004-December 2019, ``Table 3.
Civilian workers, by occupational group: employer costs per hours
worked for employee compensation and costs as a percentage of total
compensation, 2004-2019.'' March 2020. Available at https://www.bls.gov/web/ecec/ececqrtn.pdf. Accessed June 12, 2020. The wages
are in 2019 dollars and CBP assumes an annual growth rate of 0
percent.
---------------------------------------------------------------------------
Many individual brokers also travel to attend trade conferences
each year. CBP assumes that those brokers electing the lower-cost
options would forgo travel and either attend virtually (paying only the
fee) or not attend at all. CBP assumes that brokers in the medium-cost
tier would travel to attend one conference each year, while brokers in
the high-cost tier would travel to attend two conferences.\62\ Tuition
and fees for conferences, broken down into an hourly rate, are already
accounted for in the average costs of $30-$50 per hour. Traveling to
attend a single 3-day conference costs approximately $245 in airfare,
$288 for lodging, and $165 for meals and incidentals, for a total of
$698 for one conference or $1,396 for two conferences (see Table
6).\63\ Spread across 36 hours of training, travel costs account for an
additional $19.39 per hour (medium) or $38.78 per hour (high).
---------------------------------------------------------------------------
\62\ Some individual brokers would pay for their travel out of
pocket, while other would have their travel expenses covered by
their employers.
\63\ CBP bases these costs off the average price of a domestic
flight in 2019 (flight prices in 2020 were not used due to the
disruptions caused by COVID-19 cancellations), and the General
Services Administration's per diem cost for lodging and meals and
incidentals. Source for flight costs: The Bureau of Transportation
Statistics, ``Average Domestic Airline Itinerary Fares,'' https://www.transtats.bts.gov/AverageFare/. Accessed April 13, 2021. Source
for per diem costs: U.S. General Services Administration, ``Per Diem
Rates,'' https://www.gsa.gov/travel/plan-book/per-diem-rates.
Accessed April 13, 2021.
[[Page 50814]]
Table 6--Travel and Incidental Costs To Attend In-Person Events
[2021 U.S. dollars]
----------------------------------------------------------------------------------------------------------------
Cost General cost Low Medium High
----------------------------------------------------------------------------------------------------------------
Transportation.................................. $245 0 $245 $490
Hotel........................................... 288 0 288 576
Meals & Incidentals............................. 165 0 165 330
---------------------------------------------------------------
Total....................................... 698 0 698 1,396
----------------------------------------------------------------------------------------------------------------
Overall, as a result of the rule, a single broker would likely
incur monetary costs ranging from $31.27 (low) to $624 (medium) to
$1,097 (high) per year to complete 36 hours of continuing education in
a 3-year period. Over a 6-year period of analysis, these costs sum to
$188 (low), $3,744 (medium), or $6,580 (high). See Table 7 for a
summary of these costs.
Table 7--Annual Costs for One Broker
[2021 U.S. dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Low Medium High
Year Hours \64\ -----------------------------------------------------------------------------
Costs \65\ Total Costs Total Costs Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021......................................................... 12 $2.61 $31.27 $52 $624 $91 $1,097
2022......................................................... 12 2.61 31.27 52 624 91 1,097
2023......................................................... 12 2.61 31.27 52 624 91 1,097
2024......................................................... 12 2.61 31.27 52 624 91 1,097
2025......................................................... 12 2.61 31.27 52 624 91 1,097
2026......................................................... 12 2.61 31.27 52 624 91 1,097
------------------------------------------------------------------------------------------
Total.................................................... 72 15.64 188 312 3,744 548 6,580
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
There were 13,822 active individual brokers in 2021. CBP
estimates that a total of 5,947 would be required to begin to complete
continuing education under the terms of the rule in the 6-year period
of analysis, based on a current estimated compliance rate of 60 percent
(see Historical and Projected Populations Affected by the Rule, above).
Therefore, CBP estimates that brokers would incur costs related to
searching for training, fees, travel, and incidentals, ranging from
$1,076,537 (low) to $21,480,353 (medium) to $37,752,913 (high) over the
6-year period of analysis. See Table 8.
---------------------------------------------------------------------------
\64\ Individual brokers may complete whatever number of hours
they prefer during each year, so long as it totals 36 hours in 3
years. CBP designates 12 hours per year both for ease of
presentation and to account for pro-rating for individual brokers
who re-activate their licenses within the triennial period.
\65\ Costs include tuition/fees, travel costs, and research time
costs for each level.
Table 8--Annual Training Costs for Individual Broker License Holders
[2021 U.S. dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Low Medium High
Year Brokers \66\ -----------------------------------------------------------------------------------------------
Cost Total Cost Total Cost Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021.................................... 5,529 $31.27 $172,886 $624 $3,449,621 $1,097 $6,062,901
2022.................................... 5,529 31.27 172,886 624 3,449,621 1,097 6,062,901
2023.................................... 5,529 31.27 172,886 624 3,449,621 1,097 6,062,901
2024.................................... 5,947 31.27 185,960 624 3,710,497 1,097 6,521,404
2025.................................... 5,947 31.27 185,960 624 3,710,497 1,097 6,521,404
2026.................................... 5,947 31.27 185,960 624 3,710,497 1,097 6,521,404
---------------------------------------------------------------------------------------------------------------
Total............................... 5,947 188 1,076,537 3,744 21,480,353 6,580 37,752,913
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
[[Page 50815]]
To create a primary estimate, CBP assumes that approximately one
third of individual brokers would elect the lowest cost path, one third
would elect the medium-cost path, and one third would elect the highest
cost path once the rule is in place. Under these conditions, brokers
who begin pursuing continuing education as a result of the rule would
face $20,103,267 in costs related to searching for training, fees,
travel, and incidentals over the 6-year period of analysis. See Table
9.
---------------------------------------------------------------------------
\66\ Only the 40 percent of brokers who do not already complete
continuing education would face these costs. The total number of
brokers affected in the final year of analysis (2026) is the same as
the number of brokers overall because each year represents the same
population with a small amount of growth.
Table 9--Primary Estimate of Costs for Brokers
[2021 U.S. dollars]
----------------------------------------------------------------------------------------------------------------
Brokers
Year Total brokers choosing each Total cost
path
----------------------------------------------------------------------------------------------------------------
2021............................................................ 5,529 1,843 $3,228,469
2022............................................................ 5,529 1,843 3,228,469
2023............................................................ 5,529 1,843 3,228,469
2024............................................................ 5,947 1,982 3,472,620
2025............................................................ 5,947 1,982 3,472,620
2026............................................................ 5,947 1,982 3,472,620
-----------------------------------------------
Total....................................................... 5,947 1,982 20,103,267
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
All individual brokers, including those who already complete
continuing education and would not face new costs for research,
tuition, and travel, would also be required to store records of their
completed continuing education and report their compliance to CBP.\67\
Record storage would require maintaining either paper or digital copies
of any documentation received from the provider or host of the
qualifying continuing broker education and a document of some kind
listing the date, title, provider, number of credit hours, and location
(if applicable) for each training. To report and certify compliance,
individual brokers who file paper-based triennial reports with CBP
would include a written statement in the triennial report, and
individual brokers who file their triennial reports electronically
through the eCBP portal would check a box in the eCBP portal while
filing their triennial report electronically. Brokers would further be
required to produce their records of compliance if requested by CBP,
though CBP would only require brokers to maintain their records for the
three years following the submission of the triennial report.\68\ CBP
estimates that recordkeeping and reporting would take each broker 30
minutes (0.5 hours) per year. After the first triennial reporting
period in which brokers self-attest to completing their training, 10
percent of brokers each year would incur the cost of producing records
to submit to CBP for a compliance audit, which CBP estimates will take
15 minutes (0.25 hours).\69\ Therefore, brokers would see $1,380,538 in
new reporting and recordkeeping costs over the 6-year period of
analysis. See Table 10.
---------------------------------------------------------------------------
\67\ Some brokers would likely face additional time-costs should
they fail to complete and/or report their required continuing
education and need to take corrective action or reapply for their
licenses following revocation (see proposed Sec. 111.104(d) for
details). However, CBP only reports the costs affected populations
would face to maintain compliance with the proposed rule.
\68\ Note that many other records must be maintained for five
years. The 3-year standard applies only to records of continuing
education.
\69\ CBP would randomly select 10 percent of individual brokers
to audit for compliance each year.
Table 10--Reporting Costs for All Brokers
[2021 U.S. dollars]
----------------------------------------------------------------------------------------------------------------
Time (hours)
Year Brokers \70\ Wage Total
----------------------------------------------------------------------------------------------------------------
2021............................................ 13,822 0.5 $31.27 $216,107
2022............................................ 13,822 0.5 31.27 216,107
2023............................................ 13,822 0.5 31.27 216,107
2024............................................ 14,867 0.5-0.75 31.27 244,072
2025............................................ 14,867 0.5-0.75 31.27 244,072
2026............................................ 14,867 0.5-0.75 31.27 244,072
---------------------------------------------------------------
Total....................................... 14,867 3.0-3.75 .............. 1,380,538
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
To comply with the proposed rule, individual brokers who do not
already do so would be required to spend 36 hours over three years
completing continuing education in whatever form they choose.
Additionally, CBP estimates they would spend three hours per 3-year
cycle researching and registering for trainings. Finally, brokers would
need to spend about 30-45 minutes (0.5-0.75 hours) on recordkeeping
during each cycle. Overall, brokers would need to spend about 40.5
hours over a 3-year period,
[[Page 50816]]
or 81 hours over a 6-year period of analysis, to comply with the rule.
---------------------------------------------------------------------------
\70\ Note that only 10 percent of individual brokers would spend
45 minutes per year, while the remaining 90 percent would spend 30
minutes per year. Furthermore, CBP would only begin audits after the
first triennial period during which the rule is in effect.
---------------------------------------------------------------------------
Some brokers would choose to complete their trainings outside of
work hours, while others would complete training as part of their
assigned duties. Brokers would also spend time in researching,
registering for, and maintaining records of their continuing education,
for a total of 12 hours per year of training plus 1.5 to 1.75 hours per
year in research and recordkeeping. Based on the average wage rate for
brokers of $31.27, the opportunity cost of researching, registering
for, attending, and reporting continuing education is approximately
$14,547,191 over the 6-year period of analysis.\71\ See Table 11.
---------------------------------------------------------------------------
\71\ U.S. Bureau of Labor Statistics. Occupational Employment
Statistics, ``May 2019 National Occupational Employment and Wage
Estimates, United States.'' Updated March 31, 2020. Available at
https://www.bls.gov/oes/2019/may/oes_nat.htm. Accessed June 12,
2020; U.S. Bureau of Labor Statistics. Employer Costs for Employee
Compensation. Employer Costs for Employee Compensation Historical
Listing March 2004-December 2019, ``Table 3. Civilian workers, by
occupational group: Employer costs per hours worked for employee
compensation and costs as a percentage of total compensation, 2004-
2019.'' March 2020. Available at https://www.bls.gov/web/ecec/ececqrtn.pdf. Accessed June 12, 2020. The wages are in 2019 dollars
and CBP assumes an annual growth rate of 0 percent.
Table 11--Summary of Opportunity Cost for Brokers
[2021 U.S. dollars]
----------------------------------------------------------------------------------------------------------------
Year Brokers Hours Wage rate Cost
----------------------------------------------------------------------------------------------------------------
2021............................................ 5,529 13.5 $31.27 $2,333,955
2022............................................ 5,529 13.5 31.27 2,333,955
2023............................................ 5,529 13.5 31.27 2,333,955
2024............................................ 5,947 13.5 31.27 2,515,108
2025............................................ 5,947 13.5 31.27 2,515,108
2026............................................ 5,947 13.5 31.27 2,515,108
---------------------------------------------------------------
Total....................................... 5,947 81 187.62 14,547,191
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
Total costs for all individual brokers, including tuition and
travel expenses for those who must begin continuing education regimens
because of the rule as well as opportunity and reporting costs for all
brokers, range from $16,452,050 to $53,128,426. The primary estimate,
which accounts for one third of brokers choosing each cost tier, comes
to $35,478,781 over the 6-year period of analysis. See Table 12.
Table 12--Total Costs for All Brokers
[2021 U.S. dollars]
----------------------------------------------------------------------------------------------------------------
Total cost: Total cost:
Year Total cost: medium Total cost: primary
low estimate estimate high estimate estimate
----------------------------------------------------------------------------------------------------------------
2021............................................ $2,636,505 $5,913,241 $8,526,520 $5,692,089
2022............................................ 2,636,505 5,913,241 8,526,520 5,692,089
2023............................................ 2,636,505 5,913,241 8,526,520 5,692,089
2024............................................ 2,847,512 6,372,048 9,182,956 6,134,172
2025............................................ 2,847,512 6,372,048 9,182,956 6,134,172
2026............................................ 2,847,512 6,372,048 9,182,956 6,134,172
Total....................................... 16,452,050 36,855,867 53,128,426 35,478,781
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
ii. To CBP
To implement the requirements of the proposed rule, CBP would need
to designate entities or companies as approved accreditors of customs
broker continuing education. To do so, CBP would solicit applications
from parties interested in becoming accreditors, or (following the
first application cycle) accreditors seeking renewal of their status,
by publishing a Request for Proposal (RFP).\72\ A panel of CBP experts
would evaluate the applications and select the entities approved or
renewed as accreditors. CBP estimates that the process of developing
and submitting the RFP would take two personnel 10 hours. Application
evaluation would take a further 40 hours and would require four CBP
personnel. The process of designating accreditors would occur before
the continuing education requirements went into effect, to allow
accreditors to be ready for the rule's implementation and ensure equal
footing for all providers.\73\ However, because of uncertainty over
timing of the rule's implementation, we assumed that designation of
accreditors would occur in the first year of the period of analysis.
Regardless of when the rule goes into effect and the designation
process occurs, accreditors and CBP would need to complete the process
two times in a 6-year period. Overall, designation of accreditors would
require six CBP personnel 180 hours total, twice in a 6-year period of
analysis, for a cost to CBP of $26,640 (see Table 13).
---------------------------------------------------------------------------
\72\ See proposed 19 CFR 111.103(c).
\73\ See section IV.E.1. of this NPRM.
[[Page 50817]]
Table 13--Costs to CBP To Designate Accreditors
[2021 U.S. dollars]
----------------------------------------------------------------------------------------------------------------
Personnel for Personnel for
Year RFP evaluation Wage rate Hours Total
----------------------------------------------------------------------------------------------------------------
2021............................ 2 4 $74.00 50 $13,320
2022............................ 0 0 74.00 0 0
2023............................ 0 0 74.00 0 0
2024............................ 2 4 74.00 50 13,320
2025............................ 0 0 74.00 0 0
2026............................ 0 0 74.00 0 0
-------------------------------------------------------------------------------
Total....................... .............. .............. .............. .............. 26,640
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
CBP's Broker Management Branch (BMB) would also face the costs of
auditing for compliance with the continuing education requirement.
Although individual brokers would self-attest to their completion of
the continuing education requirement with each triennial report, CBP
would occasionally conduct compliance audits by randomly selecting a
certain subset of brokers for auditing. To start, CBP would select 10
percent of brokers per year, although the audits would only cover the
continuing education reported for the most recently completed triennial
cycle. A continuing education compliance audit would involve CBP
personnel reviewing the reported coursework of the selected broker and
potentially working with brokers to identify gaps or higher quality
training opportunities. Such an activity would take approximately one
hour, on average; therefore, CBP estimates that each compliance audit
would cost CBP approximately $74.00. For the first three years of the
period of analysis, no compliance audit would take place because
brokers would not yet have reported their training at the end of the
first triennial cycle. Over the next three years, CBP would select 10
percent of active individual brokers to audit.\74\ With about 1,500
compliance audits performed per year, costs to CBP would amount to
$330,054 over the 6-year period of analysis. See Table 14.
---------------------------------------------------------------------------
\74\ Those individual brokers who have not yet completed a
triennial report since taking their broker exam would be exempt from
completing continuing education until after their first triennial
report and, therefore, would also be exempt from continuing
education audits during that time.
Table 14--Compliance Auditing Costs for CBP
[2021 U.S. dollars]
----------------------------------------------------------------------------------------------------------------
Year Audits Cost per audit Total
----------------------------------------------------------------------------------------------------------------
2021............................................................ 0 $74 $0
2022............................................................ 0 74 0
2023............................................................ 0 74 0
2024............................................................ 1,487 74 110,018
2025............................................................ 1,487 74 110,018
2026............................................................ 1,487 74 110,018
-----------------------------------------------
Total....................................................... 4,460 444 330,054
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
iii. To Accreditors
Accrediting bodies interested in becoming designated accreditors
for customs brokers continuing education under the terms of proposed
rule would need to apply to CBP during an open RFP period and then re-
apply to confirm their status every three years. Costs to respond to
the RFP include only the preparation of the application. Overall, CBP
estimates that the preparation of an application to CBP to become an
accreditor would take two employees 40 hours, to be completed two times
in a 6-year period. Although the application for accreditor status
would likely be completed before the proposed rule is officially in
effect, because of uncertainty in the timing, we have used the same
period of analysis.\75\ Regardless of when the rule goes into effect,
accreditor-applicants would need to apply twice in a 6-year period.
Therefore, CBP estimates that CBP-designated accreditors would incur
approximately $11,339 in costs over a 6-year period of analysis. See
Table 15.
---------------------------------------------------------------------------
\75\ When the proposed rule is first implemented, CBP would
allow accreditor-applicants time to apply before the requirement is
officially in place so that they are able to accredit courses as
soon as the rule is in effect, allowing providers equal footing and
giving brokers the largest pool of potential training.
Table 15--Costs to Accreditors
[2021 U.S. dollars]
----------------------------------------------------------------------------------------------------------------
Year Personnel Wage rate Hours Total
----------------------------------------------------------------------------------------------------------------
2021............................................ 2 $70.87 40 $5,670
2022............................................ 0 70.87 0 0
2023............................................ 0 70.87 0 0
[[Page 50818]]
2024............................................ 2 70.87 40 5,670
2025............................................ 0 70.87 0 0
2026............................................ 0 70.87 0 0
---------------------------------------------------------------
Total....................................... .............. .............. .............. 11,339
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
iv. To Providers
Providers of continuing education would also face new costs under
the terms of the proposed rule. Specifically, providers would need to
submit applications to accreditors to have their coursework or events
accredited. Officials at the NCBFAA Education Institute estimate that
they currently approve approximately 1,000 courses per year. With the
proposed rule in place, CBP believes the number of events submitted for
accreditation would increase substantially because companies' internal
trainings and external offerings would need to be accredited.
Therefore, CBP estimated that about 2,000 courses would require
accreditation each year. Providers would likely pay a fee and would
need to renew their accreditation annually to ensure their coursework
remains up to date. The fee for accreditation is likely to vary based
on accreditor, but would likely average $25.\76\ Overall, CBP estimates
that providers of continuing education for customs brokers would face
$300,000 of new costs over a 6-year period of analysis. See Table 16.
---------------------------------------------------------------------------
\76\ This fee is based on that charged by the NCBFAA. Although
CBP sought information in the ANPRM on how much accreditors might
charge, CBP did not receive specific information.
Table 16--Costs to Providers
[2021 U.S. dollars]
----------------------------------------------------------------------------------------------------------------
Year Courses Fee Total
----------------------------------------------------------------------------------------------------------------
2021............................................................ 2,000 $25.00 $50,000
2022............................................................ 2,000 25.00 50,000
2023............................................................ 2,000 25.00 50,000
2024............................................................ 2,000 25.00 50,000
2025............................................................ 2,000 25.00 50,000
2026............................................................ 2,000 25.00 50,000
-----------------------------------------------
Total....................................................... .............. .............. 300,000
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
Based on the primary estimate, costs total $36,146,814 over the 6-
year period of analysis. Using a three percent discount rate, the
annualized total costs are $6,012,425. See Table 17 for an annual
breakdown and Table 18 for discounting.
Table 17--Total Costs to All Parties
[2021 U.S. dollars]
----------------------------------------------------------------------------------------------------------------
Costs to
brokers-- Costs to Costs to Costs to CBP--
Year primary accreditors providers accrediting Total costs
estimate and auditing
----------------------------------------------------------------------------------------------------------------
2021............................ $5,692,089 $5,670 $50,000 $13,320 $5,761,078
2022............................ 5,692,089 0 50,000 0 5,742,089
2023............................ 5,692,089 0 50,000 0 5,742,089
2024............................ 6,134,172 5,670 50,000 123,338 6,313,179
2025............................ 6,134,172 0 50,000 110,018 6,294,190
2026............................ 6,134,172 0 50,000 110,018 6,294,190
-------------------------------------------------------------------------------
Total....................... 35,478,781 11,339 300,000 356,694 36,146,814
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
[[Page 50819]]
Table 18--Discounted Total Costs
[2021 U.S. dollars]
----------------------------------------------------------------------------------------------------------------
3% 7%
-------------------------------------------------------------------
PV AV PV AV
----------------------------------------------------------------------------------------------------------------
Costs....................................... $32,570,459 $6,012,425 $28,584,851 $5,996,982
----------------------------------------------------------------------------------------------------------------
6. Costs Not Estimated in This Analysis
The parties affected by the proposed rule would also face several,
mostly minor costs that CBP is unable to quantify. To provide
individual brokers who choose to file their triennial report
electronically through the eCBP portal the ability to self-attest to
their continuing education completion, CBP would need to include a
field within the triennial report, which is submitted via the eCBP
portal. The programming to include this field does not add
significantly to the application development budget as CBP constantly
makes small changes to many aspects of CBP's authorized electronic data
interchanges.
Additionally, some potential accreditors may face costs related to
protesting CBP's initial decisions regarding their proposals to become
accreditors.\77\ Accreditor-applicants would have the right to protest
in accordance with procedures set out in the FAR. CBP expects these
costs to be minor and protests to be rare. Brokers' clients may see
slight price increases for broker services. As broker costs increase,
they may pass some of these costs onto their clients in the form of
increased prices. However, CBP believes that the per transaction
increase in prices would be so small as to be insignificant.
---------------------------------------------------------------------------
\77\ See section IV.E.1. of this NPRM.
---------------------------------------------------------------------------
7. Benefits of the Rule
This proposed rule, if finalized, would have many benefits to
brokers, CBP, and the general public. We are able to estimate some of
the benefits of the proposed rule, but many others are qualitative in
nature. Brokers would benefit from improved reputation and a
professionalization of the customs broker community while their clients
would benefit from better performance and improved compliance. The
continuing broker education requirement would provide importers and
drawback claimants with greater assurance that their agents are
knowledgeable of customs laws and regulations, familiar with
operational processes, and can properly exercise a broker's fiduciary
duties. The requirements would also help maintain a measure of
consistency across all customs brokers. Providers would benefit from
increased prestige due to CBP-approved accreditation. Other benefits of
the proposed rule are quantitative.
CBP would benefit from a reduction in regulatory audits of broker
compliance. Both CBP and brokers would benefit from fewer errors
committed by brokers and fewer penalties assessed by CBP. CBP examined
data on broker penalties, regulatory audits, and validation activities
between a group of companies who employ one or more individual brokers
known to voluntarily hold an industry certification that requires
meeting the proposed continuing education requirement and the broader
population of brokers (which includes those who voluntarily complete
continuing education and those who do not). This group of brokers with
continuing education represents about 300 companies, which make up 54
percent of entries filed between 2017 and 2020 and 51 percent of
entries filed between 2015 and 2020. CBP found that at the 99 percent
confidence level, there is a statistically significant difference
between these groups. Those who voluntarily hold this certification and
complete continuing education have significantly lower rates of
penalties, audits, and validation activities. See Table 19.\78\ Brokers
who are not known to have continuing education are assessed 11 times as
many penalties per entry filing, are audited 8 times as often, and have
5 times as many validation activities performed by CBP to investigate
discrepancies when compared to companies that are known to employ
brokers who voluntarily take continuing education.
---------------------------------------------------------------------------
\78\ Source of data of companies with at least one individual
broker with continuing education: Data received from NCBFAA on
companies participating in its broker certification program on April
28, 2021. Data on enforcement actions and the number of entries per
company was obtained from ACE on April 11, 2021.
Table 19--Enforcement Action Rate for Different Groups
----------------------------------------------------------------------------------------------------------------
By 300
By all other companies with
Enforcement action Total companies (%) continuing Ratio
education (%)
----------------------------------------------------------------------------------------------------------------
Penalty......................................... 267 0.00039 0.000035 11 to 1
Regulatory Audit................................ 87 0.000077 0.000011 8 to 1
Validation Activity............................. 311 0.00026 0.000052 5 to 1
----------------------------------------------------------------------------------------------------------------
* Rates are defined as the number of enforcement actions divided by the number of entries filed.
[[Page 50820]]
Aside from penalties, CBP enforcement often takes the form of a
regulatory audit. Regulatory audits usually occur because a CBP Officer
or Import Specialist flags unusual or suspicious activity. CBP then
performs a regulatory audit of the broker's activity, investigating the
potential infraction, as well as the broker's overall compliance with
regulations, rules, and CBP guidance. These audits may lead to a
settlement agreement in which a penalty is assessed, but they more
often lead to discussion between the broker and CBP as to how the
broker can improve compliance and performance. With continuing
education in place, CBP believes that fewer regulatory audits would be
necessary. From 2015 to 2020, CBP performed 84 regulatory audits of
broker compliance, for an average of 14 per year.\79\ The number of
audits holds approximately steady across the 5-year period, so CBP does
not believe it likely that the number of audits would grow in the
period of analysis. Therefore, CBP projects 84 audits would be
performed during the 6-year period of analysis under baseline
conditions, or 14 each year. See Table 20.
---------------------------------------------------------------------------
\79\ Data provided by CBP's Regulatory Audit and Agency Advisory
Services Directorate on April 11, 2021.
Table 20--Projection of Audits and Broker Surveys Under the Baseline
------------------------------------------------------------------------
Year Audits
------------------------------------------------------------------------
2021.................................................... 14
2022.................................................... 14
2023.................................................... 14
2024.................................................... 14
2025.................................................... 14
2026.................................................... 14
---------------
Total............................................... 84
------------------------------------------------------------------------
CBP estimates that a regulatory audit of broker compliance takes
CBP approximately 559 hours, on average. Based on the average wage rate
for a CBP Trade and Revenue employee of $74.00 per hour, we estimate
the average broker audit costs $41,351. Based on a review of outcomes
from the audits completed from 2015-2020, approximately 40 percent
would likely have been avoided had a continuing education requirement
been in place. CBP believes that, had customs brokers been required to
complete continuing education on an individual level, and, therefore,
stayed current on the rules and regulations governing customs business,
they would have made fewer errors and avoided the audits. Over a 6-year
period of analysis under the terms of the rule, CBP would avoid 34
audits, for a cost savings of $1,389,400. See Table 21.
Table 21--CBP Cost Savings From Reduced Regulatory Audit Activities
[2021 U.S. Dollars]
----------------------------------------------------------------------------------------------------------------
Cost savings
Year Audits avoided per audit Total savings
----------------------------------------------------------------------------------------------------------------
2021............................................................ 6 $41,351 $231,567
2022............................................................ 6 41,351 231,567
2023............................................................ 6 41,351 231,567
2024............................................................ 6 41,351 231,567
2025............................................................ 6 41,351 231,567
2026............................................................ 6 41,351 231,567
-----------------------------------------------
Total....................................................... 34 248,107 1,389,400
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
The number of penalties assessed between 2017 and 2020 grew
significantly. In 2017, CBP assessed 20 penalties while in 2020, that
number jumped to 119 (see Table 1, above). Between 2017 and 2020, the
number of penalties issued increased with a compound annual growth rate
(CAGR) of 52 percent. The jump in penalties between 2019 and 2020 is
likely attributable to changes in the AD/CVD environment, and CBP does
not believe that penalties per year would continue to grow at the same
rate. Based on trends before and after the jump, we do not believe that
the number of penalties assessed per year would consistently grow at
any meaningful rate. Based on a 0 percent growth rate, CBP estimates
that over the 6-year period of analysis from 2021 to 2026, CBP would
assess 675 penalties. See Table 22 for an annual count.
Table 22--Projection of Penalties Assessed From 2021-2026 Under the
Baseline
------------------------------------------------------------------------
Year Penalties
------------------------------------------------------------------------
2021.................................................... 113
2022.................................................... 113
2023.................................................... 113
2024.................................................... 113
2025.................................................... 113
2026.................................................... 113
---------------
Total............................................... 675
------------------------------------------------------------------------
When CBP assesses a penalty against a broker for a customs
violation, CBP incurs the cost of detecting and investigating the
violation, as well as determining the appropriate monetary fine and
handling any appeals from the broker. The broker must pay the penalty,
which is capped at $30,000 by statute. CBP also works with brokers
against whom a fine has been assessed to mitigate the penalty,
resulting in the collection of amounts that are usually significantly
lower. From 2017-2020, monetary penalties collected from individual
brokers averaged $2,644. CBP estimates that the entire process of
assessing a penalty against a broker, from detection to working through
mitigation, costs CBP approximately $4,440 per penalty.\80\ With the
proposed rule implemented, CBP believes that brokers would commit
approximately 20 percent fewer penalizable violations.\81\ As a result,
brokers would save approximately $359,640 in fines
[[Page 50821]]
avoided, while CBP would save approximately $599,400 in processing
costs.\82\ See Tables 23 and 24.
---------------------------------------------------------------------------
\80\ CBP bases this estimate on an average of 60 hours worked
per penalty at an average wage of $74.00 per hour for a CBP Trade
and Revenue employee. CBP bases this wage on the FY 2020 salary and
benefits of the national average of CBP Trade and Revenue positions,
which is equal to a GS-13, Step 5. Source: Email correspondence with
CBP's Office of Finance on July 2, 2020.
\81\ Approximately 20 percent of the penalties assessed between
2017 and 2020 were for infractions that CBP believes would have been
avoided had the broker been required to complete continuing
education. The majority of the remaining penalties were for late
filing. Penalty data is taken from SEACATS.
\82\ Penalties are a transfer payment from the broker to CBP
that do not affect total resources available to society.
Accordingly, CBP does not include penalties or penalties avoided in
the final accounting of costs and benefits this rule. In addition,
penalties are an enforcement tool that are intended to bring a
noncompliant party in line with existing requirements. Any costs and
benefits that result from compliance with the underlying requirement
are included in the analysis, but not the enforcement mechanism. In
the same way, if a rule results in the seizure of illegal
merchandise, CBP does not include the cost of the lost merchandise
to the importers.
Table 23--Penalties Avoided by Brokers
[2021 U.S. Dollars]
----------------------------------------------------------------------------------------------------------------
Penalties Fines avoided
Year avoided per penalty Total
----------------------------------------------------------------------------------------------------------------
2021............................................................ 23 $2,664 $59,940
2022............................................................ 23 2,664 59,940
2023............................................................ 23 2,664 59,940
2024............................................................ 23 2,664 59,940
2025............................................................ 23 2,664 59,940
2026............................................................ 23 2,664 59,940
-----------------------------------------------
Total....................................................... 135 15,984 359,640
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
Table 24--Costs Avoided by CBP
[2021 U.S. Dollars]
----------------------------------------------------------------------------------------------------------------
Penalties Cost savings
Year avoided per penalty Total
----------------------------------------------------------------------------------------------------------------
2021............................................................ 23 $4,440 $99,900
2022............................................................ 23 4,440 99,900
2023............................................................ 23 4,440 99,900
2024............................................................ 23 4,440 99,900
2025............................................................ 23 4,440 99,900
2026............................................................ 23 4,440 99,900
-----------------------------------------------
Total....................................................... 135 26,640 599,400
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
8. Net Impact of the Rule
The proposed rule would lead to costs for brokers in the form of
tuition, travel expenses, opportunity cost, and time spent researching,
registering for, keeping records of, and reporting continuing
education. CBP would face the costs of designating accreditors and
auditing broker compliance. Accreditors would incur the costs of
responding to a CBP-issued RFP, and education providers would incur the
costs of drafting applications and fees charged by the accreditors for
reviewing their accreditation requests. CBP would also see cost savings
(benefits) from avoided penalty assessment and avoided regulatory
audits. CBP has found that companies employing one or more brokers who
complete continuing education are statistically less likely to face
enforcement actions. Over a 6-year period of analysis, the primary
estimate of the net costs totals $34,158,014 (see Table 25). Using a
discount rate of three percent, annualized costs total $5,680,959 (see
Table 26).
---------------------------------------------------------------------------
\83\ Note that we only include costs of remaining compliant with
the proposed rule in the net costs. Similarly, we do not include
penalties avoided in the final accounting of benefits.
Table 25--Primary Estimate of Net Costs
[2021 U.S. Dollars]
----------------------------------------------------------------------------------------------------------------
Year Benefits Costs Net costs \83\
----------------------------------------------------------------------------------------------------------------
2021............................................................ $331,467 $5,761,078 $5,429,611
2022............................................................ 331,467 5,742,089 5,410,622
2023............................................................ 331,467 5,742,089 5,410,622
2024............................................................ 331,467 6,313,179 5,981,713
2025............................................................ 331,467 6,294,190 5,962,723
2026............................................................ 331,467 6,294,190 5,962,723
-----------------------------------------------
Total....................................................... 1,988,800 36,146,814 34,158,014
----------------------------------------------------------------------------------------------------------------
[[Page 50822]]
Table 26--Primary Estimate of Net Present and Annualized Costs
[2021 U.S. Dollars]
----------------------------------------------------------------------------------------------------------------
3% 7%
---------------------------------------------------------------
PV AV PV AV
----------------------------------------------------------------------------------------------------------------
Savings......................................... $1,795,619 $331,467 $1,579,949 $331,467
Costs........................................... 32,570,459 6,012,425 28,584,851 5,996,982
---------------------------------------------------------------
Net Costs................................... 30,774,841 5,680,959 27,004,902 5,665,515
----------------------------------------------------------------------------------------------------------------
CBP presents four estimates of the net costs depending on the cost
of training pursued by each individual broker. The low-cost path
assumes the broker would pursue only free trainings and forgo travel.
In the medium-cost path, brokers would pursue a mix of free and paid
trainings and travel to a single conference or in-person event per
year. In the high-cost path, brokers would pursue all paid trainings
and travel to two in-person events or conferences per year. The primary
estimate assumes that one third of brokers would choose each path.
Overall, the quantifiable effects of the proposed rule result in a net,
annualized cost ranging from $2,514,956 to $8,617,817, using a 3
percent discount rate over the 6-year period of analysis. A summary of
net costs under all four estimates presented in the analysis can be
found in Table 27.
Table 27--Summary of Net Costs
[2021 U.S. Dollars]
----------------------------------------------------------------------------------------------------------------
Estimate Value 3% 7%
----------------------------------------------------------------------------------------------------------------
Primary....................................... Net PV.......................... $30,774,841 $27,004,902
Net AV.......................... 5,680,959 5,665,515
Low........................................... Net PV.......................... 13,624,000 11,945,324
Net AV.......................... 2,514,956 2,506,079
Medium........................................ Net PV.......................... 32,016,156 28,094,859
Net AV.......................... 5,910,102 5,894,183
High.......................................... Net PV.......................... 46,684,367 40,974,522
Net AV.......................... 8,617,817 8,596,283
----------------------------------------------------------------------------------------------------------------
As stated before, many benefits of the proposed rule are
qualitative. Brokers would benefit from improved reputation and a
professionalization of the customs broker community while their clients
would benefit from better performance, less non-compliance, and
improved outcomes. Providers would benefit from increased prestige due
to CBP-approved accreditation. CBP believes that the combination of
quantified benefits and unquantified benefits exceed the costs of this
rule. We request comment on this conclusion.
9. Analysis of Alternatives
Alternative 1: 72 hours every three years.
Alternative 1 is the same as the chosen alternative except that the
continuing education requirement would be raised to 72 hours each
triennial cycle instead of 36 hours. This alternative is modeled on the
Internal Revenue Service's (IRS) Enrolled Agent program, which requires
72 hours of continuing education every three years.\84\ An enrolled
agent is an individual who may represent clients in matters before the
IRS and, like a licensed customs broker, must pass a rigorous
examination to prove his or her knowledge and competence, making it a
reasonable analog to the proposed CBP program. Once the agent has
passed the exam, he or she has unlimited practice rights, providing he
or she completes the requisite continuing education.
---------------------------------------------------------------------------
\84\ See Internal Revenue Service, Enrolled Agent Information
(Apr. 6, 2021), available at https://www.irs.gov/tax-professionals/enrolled-agents/enrolled-agent-information.
---------------------------------------------------------------------------
CBP has determined that 72 hours every three years would be
inappropriate for individual brokers. Were CBP to mandate 72 hours of
continuing education every three years, brokers who already voluntarily
pursue continuing education would need to increase the amount of
training they complete, often by 100 percent. Costs incurred by both
brokers who do not already pursue continuing education and those who do
would be much greater. Such a requirement would be too onerous,
particularly for small businesses, which make up a significant
proportion (approximately 39 percent) of the employers of licensed
customs brokers. CBP estimates that such a requirement would cost
brokers up to $113,258,739 over a 6-year period of analysis, or about
$7,618 per broker. See Table 28.
Table 28--Broker Costs Under a 72-Hour Continuing Education Requirement
[2021 U.S. Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Low Medium High
Year Brokers -----------------------------------------------------------------------------------------------
Cost Total Cost Total Cost Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021.................................... 13,822 $62.54 $518,657 $1,248 $10,348,863 $2,193 $18,188,702
2022.................................... 13,822 62.54 518,657 1,248 10,348,863 2,193 18,188,702
[[Page 50823]]
2023.................................... 13,822 62.54 518,657 1,248 10,348,863 2,193 18,188,702
2024.................................... 14,867 62.54 557,880 1,248 11,131,490 2,193 19,564,211
2025.................................... 14,867 62.54 557,880 1,248 11,131,490 2,193 19,564,211
2026.................................... 14,867 62.54 557,880 1,248 11,131,490 2,193 19,564,211
---------------------------------------------------------------------------------------------------------------
Total............................... 14,867 375 3,229,610 7,487 64,441,059 13,159 113,258,739
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
Alternative 2: 36 hours every three years.
Alternative 2 is the chosen alternative.
Alternative 3: CBP list of brokers voluntarily meeting continuing
education standards.
Under Alternative 3, instead of mandating any kind of continuing
education program, CBP would release annually a list of brokerages or
companies employing brokers who voluntarily provide continuing
education to their broker employees. As with Alternative 1, qualifying
events would include internal training, government-sponsored webinars,
trade conferences and events, and other activities. CBP would draft
this list each year by requesting that companies report whether they
provide a continuing education program. CBP might request details from
the company to ensure the training provided meets a certain threshold
for quality and relevance.
Under baseline conditions, CBP estimates that about 60 percent of
brokers already complete continuing education on a voluntary basis. CBP
does not believe that publishing a list of brokerages that provide
continuing education would induce the remaining 40 percent of brokers
to pursue continuing education, though some brokers might do so. Under
Alternative 3, those individual brokers who already complete ongoing
training would continue to do so, while many of those brokers who do
not, would not, absent a mandate, be likely to change. CBP estimates
that an additional five percent of brokers might begin a continuing
education program in order to be included on CBP's list, representing
about 186 additional companies.\85\ While fewer brokers would face the
costs of tuition, travel, and record-keeping, approximately 743 would
face these costs of continuing education over the 6-year period of
analysis. Additionally, CBP would incur the costs of composing the list
each year and companies employing brokers would face the costs of
applying to be included on the list. Assuming two CBP personnel spend
about 40 hours each, annually to compose the list, that one person from
each company spends about 10 hours compiling and submitting information
to CBP annually, and that one third of affected brokers choose each
cost path, Alternative 3 results in costs of $5,636,739 over the 6-year
period of analysis. See Table 29.
---------------------------------------------------------------------------
\85\ CBP assumes that large companies employing more than 100
people already have a continuing education program. Therefore, those
companies that would need to add continuing education in order to be
included on CBP's list would likely be small to medium sized
businesses, meaning there would be a significant number of them,
employing a few brokers each.
Table 29--Total Costs Under Alternative 3
[2021 U.S. Dollars]
----------------------------------------------------------------------------------------------------------------
Brokerage
Year CBP cost costs Broker costs Total
----------------------------------------------------------------------------------------------------------------
2021............................................ $11,840 $267,605 $293,545 $572,990
2022............................................ 11,840 267,605 695,303 974,748
2023............................................ 11,840 267,605 725,822 1,005,267
2024............................................ 11,840 267,605 748,466 1,027,911
2025............................................ 11,840 267,605 748,466 1,027,911
2026............................................ 11,840 267,605 748,466 1,027,911
---------------------------------------------------------------
Total....................................... 71,040 1,605,631 3,960,068 5,636,739
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
If only 5 percent more brokers elect to begin continuing education
under the terms of Alternative 3, fewer non-compliance actions would be
avoided. CBP estimates that only an eighth as many penalties and audits
would be avoided as compared to Alternative 2. Therefore, CBP and
brokers would avoid three penalties and one audit annually, for a total
cost savings of $44,955 per year. However, CBP does not typically
include avoided penalties in the overall accounting of costs and
benefits of a rule. Therefore, over a 6-year period of analysis,
Alternative 3 leads to $248,600 in cost savings.
[[Page 50824]]
Table 30--Total Savings Under Alternative 3
[2021 U.S. Dollars]
----------------------------------------------------------------------------------------------------------------
Savings for Savings for
Year brokers CBP Total savings
----------------------------------------------------------------------------------------------------------------
2021............................................................ $7,493 $41,433 $41,433
2022............................................................ 7,493 41,433 41,433
2023............................................................ 7,493 41,433 41,433
2024............................................................ 7,493 41,433 41,433
2025............................................................ 7,493 41,433 41,433
2026............................................................ 7,493 41,433 41,433
-----------------------------------------------
Total....................................................... 44,955 248,600 248,600
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
One of the primary goals of the proposed rule is to reduce
compliance issues, penalties, and regulatory audits, and CBP does not
believe that a system based on voluntary reporting would do enough to
reach that goal. With only an additional 5 percent of brokers pursuing
continuing education, Alternative 3 would not do enough to further
professionalize the customs broker community, nor would their clients
see an appreciable decline in compliance issues. Additionally, such a
system would still result in a net cost of about $5.4 million over the
6-year period of analysis. Therefore, CBP believes that Alternative 3
is less preferable than the chosen alternative.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.), as amended
by the Small Business Regulatory Enforcement and Fairness Act of 1996,
requires agencies to assess the impact of regulations on small
entities. A small entity may be a small business (defined as any
independently owned and operated business not dominant in its field
that qualifies as a small business concern per the Small Business Act);
a small organization (defined as any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field); or
a small governmental jurisdiction (defined as a locality with fewer
than 50,000 people). A small business within the Freight Transportation
Arrangement Industry, the industry that employs customs brokers, is
defined as one whose annual receipts are less than $16.5 million,
regardless of the number of employees.\86\ Data from the U.S. Census
Bureau shows that approximately 96 percent of businesses in the
Transportation Arrangement Industry (NAICS Code 448510) are small
businesses (see Table 31). All businesses employing brokers under this
NAICS Code are affected by this rule. Additionally, some small
businesses may elect to become accreditors or training providers.
Therefore, CBP concludes that this rule will affect a substantial
number of small entities.
---------------------------------------------------------------------------
\86\ Small business size standards are defined in 13 CFR part
121.
Table 31--Small Businesses in the Freight Transportation Arrangement Industry \87\
----------------------------------------------------------------------------------------------------------------
Preliminary
Number of receipts (all Receipts per
Employment size \88\ employees firms, firm ($) Small business?
$1,000s) \89\
----------------------------------------------------------------------------------------------------------------
01: Total............................ 265,192 $67,276,572 $4,454,222
02: <5............................... 15,939 6,315,166 708,614 Yes.
03: 5-9.............................. 18,025 5,392,992 1,974,732 Yes.
04: 10-19............................ 20,288 5,870,163 3,851,813 Yes.
05: <20.............................. 54,252 17,578,321 1,335,029 Yes.
06: 20-99............................ 49,477 13,973,780 10,397,158 Yes.
07: 100-499.......................... 44,715 10,886,028 30,493,076 No.
08: <500............................. 148,444 42,438,129 2,854,327 Yes.
09: 500+............................. 116,748 24,838,443 105,247,640 No.
----------------------------------------------------------------------------------------------------------------
Some small businesses may choose to apply to CBP to become
accreditors. Those businesses would face the costs of applying to CBP,
the potential costs of any protests they choose to file should they
disagree with CBP's decision regarding their proposals, and the costs
of being an accreditor. Small businesses may also choose to become
training providers and to incur the costs of producing and providing
trainings. However, CBP believes that those costs would be recouped by
tuition and fees. CBP further expects any costs not directly covered by
fees to be minor and included in general business expenses.
---------------------------------------------------------------------------
\87\ United States Census Bureau, ``2017 County Business
Patterns and 2017 Economic Census,'' Released March 6, 2020, https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html.
Accessed March 15, 2021.
\88\ Note that some of the categories are sums of other
categories. For example, Category 8, <500, is a sum of Categories 2,
3, 4, 6, and 7. Thus, Categories 7 and 9 are not consecutive, but
represent all firms employing 100 or more people.
\89\ The Survey of U.S. Businesses (SUSB) from which this data
is taken is conducted in years ending in 2 and 7. Note that
finalized results from the 2017 survey are scheduled for release in
May of 2021.
---------------------------------------------------------------------------
Individual brokers employed by these companies would be required to
attain 36 hours of continuing education every three years under the
terms of the proposed rule. They would also face the opportunity cost
of attending trainings as well as the costs of recordkeeping,
reporting, and participating in any continuing education compliance
audit initiated by CBP. Accordingly, the impacts of the rule to
individual brokers
[[Page 50825]]
and affected businesses will depend on if the broker currently meets
the proposed training requirements. Based on public comments in
response to the ANPRM and discussions between CBP and various broker
organizations, CBP estimates most large businesses employing brokers
already provide, and often mandate, internal training and continuing
education. CBP estimates that these 60 percent of individual brokers
already in compliance would not face new costs aside from recordkeeping
and reporting. CBP estimates the remaining 40 percent of brokers,
mostly at smaller businesses, would need to come into compliance with
the proposed rule. Using the primary estimate under which one third of
brokers selects each cost tier, and assuming a discount rate of 3
percent, the annualized cost of the rule to all affected brokers is
$5,903,336. The rule would affect 5,529 customs brokers in the first
year, for an average annualized cost of $1,068 per broker. The average
annual receipts for small businesses in the Freight Transportation
Arrangement Industry, according to the Census data in Table 28, is
$543,589. The number of brokers employed by each business would vary
among the small businesses in question, but assuming an average of four
brokers per company,\90\ the cost of continuing education for each firm
would be approximately $4,272 annually, or about 0.79 percent of annual
receipts. CBP generally considers effects of less than 1 percent of
annual receipts not to be a significant impact. Accordingly, CBP
certifies that this proposed rule does not have a significant economic
impact on a substantial number of small entities.
---------------------------------------------------------------------------
\90\ Many brokerages are sole proprietorships and many employ
individual brokers who supervise other employees. The average number
of employees per firm is seven. CBP assumes the average firm employs
4 individual brokers and 3 other employees, such as human resource
managers.
---------------------------------------------------------------------------
C. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (Pub. L.
104-13, 44 U.S.C. 3507) an agency may not conduct, and a person is not
required to respond to, a collection of information unless the
collection of information displays a valid control number assigned by
OMB. The collections of information contained in these regulations are
provided for by OMB control number 1651-0034 (CBP Regulations
Pertaining to Customs Brokers).
The proposed rule would require individual brokers to maintain
records of completed continuing education (including, among others, the
date, title, provider, location, and credit hours) and certify the
completion of the required number of continuing education credits on
the triennial report. Based on these changes, CBP estimates a small
increase in the burden hours for information collection related to
customs brokers regulations. CBP would submit to OMB for review the
following adjustments to the previously approved Information Collection
under OMB control number 1651-0034 to account for this proposed rule's
changes. The addition of the self-attestation and submission of records
would add about 30-45 minutes (0.5-0.75 hours) per respondent.
CBP Regulations Pertaining Customs Brokers
Estimated Number of Respondents: 13,822.
Estimated Number of Responses per Respondent: 1.
Estimated Number of Total Annual Responses: 0.333.
Estimated Time per Response: 31.5 minutes (0.525 hours).
Estimated Total Annual Burden Hours: 2,418.85 hours.
D. Signing Authority
This document is being issued in accordance with 19 CFR 0.1(b)(1),
which provides that the Secretary of the Treasury delegated to the
Secretary of DHS authority to prescribe and approve regulations
relating to customs revenue functions on behalf of the Secretary of the
Treasury for when the subject matter is not listed as provided by
Treasury Department Order No. 100-16. Accordingly, this proposed rule
may be signed by the Secretary of DHS (or his or her delegate).
List of Subjects in 19 CFR Part 111
Administrative practice and procedure, Brokers, Penalties,
Reporting and recordkeeping requirements.
Amendments to the Regulations
For the reasons set forth in the preamble, CBP proposes to amend 19
CFR part 111 as set forth below:
PART 111--CUSTOMS BROKERS
0
1. The general authority citation for part 111 continues to read as
follows:
Authority: 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized
Tariff Schedule of the United States), 1624, 1641.
* * * * *
0
2. Revise the second sentence of Sec. 111.0 to read as follows:
Sec. 111.0 Scope.
* * * This part also prescribes the duties and responsibilities of
brokers, the grounds and procedures for disciplining brokers, including
the assessment of monetary penalties, the revocation or suspension of
licenses and permits, and the obligation for individual customs broker
license holders to satisfy a continuing education requirement.
0
3. In Sec. 111.1, add the definitions ``Continuing broker education
requirement'', ``Continuing education credit'', ``Qualifying continuing
broker education'', and ``Triennial period'' in alphabetical order to
read as follows:
Sec. 111.1 Definitions.
* * * * *
Continuing broker education requirement. ``Continuing broker
education requirement'' means an individual customs broker license
holder's obligation to complete a certain number of continuing
education credits of qualifying continuing broker education, as set
forth in subpart F of this part, in order to maintain sufficient
knowledge of customs and related laws, regulations, and procedures,
bookkeeping, accounting, and all other appropriate matters necessary to
render valuable service to importers and drawback claimants.
Continuing education credit. ``Continuing education credit'' means
the unit of measurement used for meeting the continuing broker
education requirement. The smallest recognized unit is one continuing
education credit, which requires 60 minutes of continuous participation
in a qualifying continuing broker education program, as defined in
Sec. 111.103(a). For qualifying continuing broker education lasting
more than 60 minutes, one continuing education credit may be claimed
for the first 60 minutes of continuous participation, and half of one
continuing education credit may be claimed for every full 30 minutes of
continuous participation thereafter. For example, for qualifying
continuing broker education lasting more than 60 minutes but less than
90 minutes, only one continuing education credit may be claimed. In
contrast, for qualifying continuing broker education lasting 90
minutes, 1.5 continuing broker education credits may be claimed.
* * * * *
Qualifying continuing broker education. ``Qualifying continuing
broker education'' means any training or educational activity that is
eligible or, if required, has been approved for continuing education
credit, in accordance with Sec. 111.103.
* * * * *
Triennial period. ``Triennial period'' means a period of three
years
[[Page 50826]]
commencing on February 1, 1985, or on February 1 in any third year
thereafter.
0
4. In Sec. 111.30, revise paragraphs (d)(2)(ii) and (iii) and add
paragraph (d)(2)(iv) to read as follows:
Sec. 111.30 Notification of change of business address, organization,
name, or location of business records; status report; termination of
brokerage business.
* * * * *
(d) * * *
(2) * * *
(ii) State the name and address of his or her employer if he or she
is employed by another broker, unless his or her employer is a
partnership, association, or corporation broker for which he or she is
a qualifying member or officer for purposes of Sec. 111.11(b) or
(c)(2);
(iii) State whether or not he or she still meets the applicable
requirements of Sec. Sec. 111.11 and 111.19 and has not engaged in any
conduct that could constitute grounds for suspension or revocation
under Sec. 111.53; and
(iv) Report and certify the broker's compliance with the continuing
broker education requirement as set forth in Sec. 111.102.
* * * * *
Sec. Sec. 111.97 through 111.100 [Added and Reserved]
0
5. Add reserve Sec. Sec. 111.97 through 111.100.
0
6. Add subpart F, consisting of Sec. Sec. 111.101 through 111.104, to
read as follows:
Subpart F--Continuing Education Requirements for Individual Customs
Broker License Holders
Sec.
111.101 Scope.
111.102 Obligations of individual customs brokers in conjunction
with continuing broker education requirement.
111.103 Accreditation of qualifying continuing broker education.
111.104 Failure to report and certify compliance with continuing
broker education requirement.
Sec. 111.101 Scope.
This subpart sets forth regulations providing for a continuing
education requirement for individual customs broker license holders and
the framework for administering the requirements of this subpart. The
continuing broker education requirement is for individual brokers, in
order to maintain sufficient knowledge of customs and related laws,
regulations, and procedures, bookkeeping, accounting, and all other
appropriate matters necessary to render valuable service to importers
and drawback claimants.
Sec. 111.102 Obligations of individual customs brokers in
conjunction with continuing broker education requirement.
(a) Continuing broker education requirement. All individual customs
broker license holders must complete qualifying continuing broker
education as defined in Sec. 111.103(a), except:
(1) During a period of voluntary suspension as described in Sec.
111.52; or
(2) When individual customs broker license holders have not held
their license for an entire triennial period at the time of the
submission of the status report as required under Sec. 111.30(d).
(b) Required minimum number of continuing education credits. All
individual brokers who are subject to the continuing broker education
requirement must complete at least 36 continuing education credits of
qualifying continuing broker education each triennial period, except
upon the reinstatement of a license following a period of voluntary
suspension as described in Sec. 111.52. Upon the reinstatement of a
license following a period of voluntary suspension as described in
Sec. 111.52, the number of continuing education credits that an
individual broker must complete by the end of the triennial period
during which the reinstatement of the license occurred will be
calculated on a prorated basis of one continuing education credit for
each complete remaining month until the end of the triennial period.
(c) Reporting requirements. Individual brokers who are subject to
the continuing broker education requirement must report and certify
their compliance upon submission of the status report required under
Sec. 111.30(d).
(d) Recordkeeping requirements--(1) General. Individual brokers who
are subject to the continuing broker education requirement must retain
the following information and documentation pertaining to the
qualifying education completed during a triennial period for a period
of three years following the submission of the status report required
under Sec. 111.30(d):
(i) The title of the qualifying continuing broker education
attended;
(ii) The name of the provider or host of the qualifying continuing
broker education;
(iii) The date(s) attended;
(iv) The number of continuing education credits accrued;
(v) The location of the training or educational activity, if the
training or educational activity is offered in person; and
(vi) Any documentation received from the provider or host of the
qualifying continuing broker education that evidences the individual
broker's registration for, attendance at, completion of, or other
activity bearing upon the individual broker's participation in and
completion of the qualifying continuing broker education.
(2) Availability of records. In order to ensure that the individual
broker has met the continuing broker education requirement, upon CBP's
request, the individual broker must make available to CBP the
information and documentation described in paragraph (d)(1) of this
section. CBP can request the information and documentation be made
available for in-person inspection, or be delivered to CBP by either
hard-copy or electronic means, or any combination thereof.
Sec. 111.103 Accreditation of qualifying continuing broker
education.
(a) Qualifying continuing broker education. In order for a training
or educational activity to be considered qualifying continuing broker
education, it must meet the following two requirements:
(1) Providers of qualifying continuing broker education. The
training or educational activity must be offered by one of the
following providers:
(i) Government agencies. Qualifying continuing broker education
constitutes any training or educational activity offered by CBP,
whether online or in-person, and training or educational activity
offered by another U.S. Government agency, whether online or in-person,
but only if the content is relevant to customs business. Accreditation
is not required for trainings or educational activities offered by U.S.
Government agencies.
(ii) Other providers requiring accreditation. Any other training or
educational activity not offered by a U.S. Government agency, whether
online or in-person, will not be considered a qualifying continuing
broker education, unless the training or educational activity has been
approved for continuing education credit by a CBP-selected accreditor
before the training or educational activity is provided.
(2) Recognized trainings or educational activities. The training or
educational activity must constitute one of the following:
(i) Coursework, a seminar, or a workshop, whether online or in-
person, that is conducted by an instructor, discussion leader, or
speaker;
(ii) A symposium or convention, with the exception of the
attendance at a meeting conducted in accordance with the provisions of
the Federal Advisory
[[Page 50827]]
Committee Act, as amended (5 U.S.C. App.), whether online or in-person;
(iii) The preparation of a subject matter for presentation as an
instructor, discussion leader, or speaker at a training or educational
activity described in paragraphs (a)(2)(i) and (ii) of this section,
subject to the requirements set forth in paragraph (b) of this section;
and
(iv) The presentation of a subject matter as an instructor,
discussion leader, or speaker at a training or educational activity
described in paragraph (a)(2)(i) or (ii) of this section, subject to
the requirements set forth in paragraph (b) of this section.
(b) Special allowance for instructors, discussion leaders, and
speakers. (1) Contingent upon the approval by a CBP-selected
accreditor, an individual broker may claim one continuing education
credit for each full 60 minutes spent:
(i) Presenting subject matter as an instructor, discussion leader,
or speaker at a training or educational activity described in paragraph
(a)(2)(i) or (ii) of this section; or
(ii) Preparing subject matter for presentation as an instructor,
discussion leader, or speaker at a training or educational activity
described in paragraph (a)(2)(i) or (ii) of this section.
(2) The special allowance for instructors, discussion leaders, and
speakers is subject to the following limitations:
(i) For any session of presentation given at one time, regardless
of the duration of that session, an individual broker may claim, at a
maximum, one continuing education credit for the time spent preparing
subject matter for that presentation pursuant to paragraph (b)(1)(ii)
of this section.
(ii) Per triennial period, an individual broker may claim, at a
maximum, a combined total of 12 continuing education credits earned in
accordance with paragraphs (b)(1)(i) and (ii) of this section.
(3) Regardless of whether the training or educational activity is
offered by a U.S. Government agency or another provider, any
instructor, discussion leader, or speaker seeking to claim continuing
education credit in accordance with paragraph (b)(1) of this section
must obtain the approval of a CBP-selected accreditor.
(c) Selection of accreditors. The Office of Trade will select
accreditors based on a Request for Information (RFI) and a Request for
Proposal (RFP) announced through the System for Award Management (SAM)
or any other electronic system for award management approved by the
U.S. General Services Administration, in accordance with the Federal
Acquisition Regulation (48 CFR chapter 1), for a specific period of
award, subject to renewal. The Executive Assistant Commissioner, Office
of Trade, will periodically publish notices in the Federal Register
announcing the criteria that CBP will use to select an accreditor, the
period during which CBP will accept applications by potential
accreditors, and the period of award for a CBP-selected accreditor.
(d) Responsibilities of CBP-selected accreditors. CBP-selected
accreditors administer the accreditation of trainings or educational
activities other than those described in paragraph (a)(1) of this
section for the purpose of the continuing broker education requirement
by reviewing and approving or denying such educational content for
continuing education credit. A CBP-selected accreditor's approval of a
training or educational activity for continuing education credit is
valid for one year, and the accreditation may be renewed through any
CBP-selected accreditor.
(e) Prohibition of self-certification by an accreditor. CBP-
selected accreditors may not approve their own trainings or educational
activities for continuing education credit.
Sec. 111.104 Failure to report and certify compliance with
continuing broker education requirement.
(a) Notification by CBP. If an individual broker is subject to the
continuing broker education requirement pursuant to Sec. 111.102 and
submits a status report as required under Sec. 111.30(d)(2), but fails
to report and certify compliance with the continuing broker education
requirement as part of the submission of the status report, then CBP
will notify the individual broker of the broker's failure to report and
certify compliance in accordance with Sec. 111.30(d). The notification
will be sent to the address reflected in CBP's records, or transmitted
electronically pursuant to any electronic means authorized by CBP for
that purpose.
(b) Required response to notice. Upon the issuance of such
notification, the individual broker must within 30 calendar days:
(1) Submit a corrected status report that, in accordance with Sec.
111.30(d), reflects the individual broker's compliance with the
continuing broker education requirement, if the individual broker
completed the required number of continuing education credits but
failed to report and certify compliance with the requirement as part of
the submission of the status report; or
(2) Complete the required number of continuing education credits of
qualifying continuing broker education and submit a corrected status
report that, in accordance with Sec. 111.30(d), reflects the broker's
compliance with the continuing broker education requirement, if the
individual broker had not completed the required number of continuing
education credits at the time the status report was due.
(c) Suspension of license. Unless the individual broker takes the
corrective actions described in paragraph (b)(1) or (2) of this section
within 30 calendar days of the issuance of the notification described
in paragraph (a) of this section, CBP will take actions to suspend the
individual broker's license in accordance with subpart D of this part.
(d) Revocation of license. If the individual broker's license has
been suspended pursuant to paragraph (c) of this section and the
individual broker fails to take the corrective actions described in
paragraph (b)(1) or (2) of this section within 120 calendar days upon
the issuance of the order of suspension, CBP will take actions to
revoke the individual broker's license without prejudice to the filing
of an application for a new license in accordance with subpart D of
this part.
Alejandro N. Mayorkas,
Secretary, Department of Homeland Security.
[FR Doc. 2021-19013 Filed 9-9-21; 8:45 am]
BILLING CODE 9111-14-P