PRT111 NPRM 2020

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Federal Register / Vol. 85, No. 109 / Friday, June 5, 2020 / Proposed Rules

DEPARTMENT OF HOMELAND
SECURITY
U.S. Customs and Border Protection
19 CFR Parts 24 and 111
[Docket No. USCBP–2020–0009]
RIN 1651–AB16

Modernization of the Customs Brokers
Regulations
AGENCY: U.S. Customs and Border

Protection, DHS.
ACTION: Notice of proposed rulemaking.

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SUMMARY: This document proposes to

amend the U.S. Customs and Border
Protection (CBP) regulations by
modernizing the customs brokers
regulations to coincide with the
development of CBP trade initiatives
including, the Automated Commercial
Environment (ACE) and the Centers of
Excellence and Expertise (Centers).
Specifically, CBP proposes to transition
all brokers to national permits and to
eliminate broker districts and district
permits. CBP is also proposing, among
other changes, to update the responsible
supervision and control oversight
framework, ensure that customs
business is conducted within the United
States, and require that the customs
broker have direct communication with
the importer. Additionally, CBP
proposes to raise the broker license
application fees to recover some of the
costs associated with reviewing the
customs broker license application and
conducting the necessary vetting for
individuals and business entities (i.e.,
corporations, partnerships, and
associations). The Department of the
Treasury retains authority over CBP
regulations relating to customs revenue
in accordance with the Homeland
Security Act of 2002. Accordingly, CBP
is publishing a concurrent notice of
proposed rulemaking to eliminate all
references to customs broker district
permit fees (See ‘‘Removal of References
to Customs Broker District Permit Fee’’
RIN 1515–AE43).
DATES: Comments must be received on
or before August 4, 2020.
ADDRESSES: You may submit comments,
identified by docket number, by one of
the following methods:
• Federal eRulemaking Portal at
http://www.regulations.gov. Follow the
instructions for submitting comments
via Docket No. USCBP–2020–0009.
• Mail: Trade and Commercial
Regulations Branch, Regulations and
Rulings, Office of Trade, U.S. Customs
and Border Protection, 90 K Street NE,

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10th Floor, Washington, DC 20229–
1177.
Instructions: All submissions received
must include the agency name and
docket number for this rulemaking. All
comments received will be posted
without change to http://
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 http://
www.regulations.gov. Submitted
comments may be inspected during
regular business days between the hours
of 9 a.m. and 4:30 p.m. at the Trade and
Commercial Regulations Branch,
Regulations and Rulings, Office of
Trade, U.S. Customs and Border
Protection, 90 K Street NE, 10th Floor,
Washington, DC. Arrangements to
inspect submitted comments should be
made in advance by calling Ms. Cammy
Canedo at (202) 325–0439.
FOR FURTHER INFORMATION CONTACT:
Melba Hubbard, Chief, Broker
Management Branch, (202) 863–6986,
[email protected].
SUPPLEMENTARY INFORMATION:
Public Participation
Interested persons are invited to
participate in this rulemaking by
submitting written data, views, or
arguments on all aspects of this
proposed rule. U.S. Customs and Border
Protection (CBP) also invites comments
that relate to the economic,
environmental, or federalism effects that
might result from this regulatory
change. Comments that will provide the
most assistance to CBP will reference a
specific portion of the rule, explain the
reason for any recommended change,
and include data, information or
authority that support such
recommended change.
Background
Section 641 of the Tariff Act of 1930,
as amended (19 U.S.C. 1641), provides
that individuals and business entities
must hold a valid customs broker’s
license and permit to transact customs
business on behalf of others. The statute
also sets forth standards for the issuance
of broker licenses and permits; provides
for disciplinary action against brokers in
the form of suspension or revocation of
such licenses and permits or assessment
of monetary penalties; and, provides for
the assessment of monetary penalties

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against other persons for conducting
customs business without the required
broker’s license. Section 641 authorizes
the Secretary of the Treasury to
prescribe rules and regulations relating
to the customs business of brokers as
may be necessary to protect the public
and the revenue of the United States
and to carry out the provisions of
section 641.
The regulations issued under the
authority of section 641 are set forth in
part 111 of title 19 of the Code of
Federal Regulations (CFR) (19 CFR part
111) and provide for, among other
things, the rules for license and permit
requirements; recordkeeping and other
duties and responsibilities of brokers;
the grounds and procedures for the
revocation or suspension of broker
licenses and permits; the grounds for
the assessment of monetary penalties;
and fee payment requirements
applicable to brokers under section 641
and 19 U.S.C. 58c(a)(7).
Customs brokers are private
individuals and/or business entities
(partnerships, associations or
corporations) that are licensed and
regulated by CBP to assist importers in
conducting customs business. Customs
brokers have an enormous responsibility
to their clients and to CBP that requires
them to properly prepare importation
documentation, file these documents
timely and accurately, classify and
value goods properly, pay duties, taxes,
and fees, safeguard their clients’
information, and protect their licenses
from misuse.
The current broker regulations are
based on the district system in which
entry, entry summary, and postsummary activity are all handled by the
ports within a district, for which a
broker district permit is required. As a
general rule, all merchandise imported
into the United States is required to be
entered, unless specficially excepted.
The act of entering merchandise
consists of the filing of paper or
electronic documents with CBP
containing sufficient information to
enable CBP to determine whether
imported merchandise may be released
from CBP custody. See 19 CFR
141.0a(a). Additionally, entry summary
refers to documentation that enables
CBP to assess duties, and collect
statistics on imported merchandise, and
determine whether other requirements
of law or regulation are met. See 19 CFR
141.0a(b). Pursuant to the regulations,
customs business also refers to postsummary activity, including the refund,
rebate, or drawback of duties, taxes, or
other charges. A district is the
geographic area covered by a customs
broker permit other than a national

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permit. Brokers are required to maintain
a physical presence within the district
so that the broker is physically close to
the port of entry to file any paperwork
associated with an entry, entry
summary, or post-summary activity.
The Impact of the Centers of Excellence
and Expertise and the Automated
Commercial Environment on Brokers
Two major developments, the
establishment of the Centers of
Excellence and Expertise (Centers) and
the creation of the Automated
Commercial Environment (ACE), have
fundamentally changed the traditional
ways that customs brokers and CBP
interact. Beginning in 2012, CBP
developed a test to incrementally
transition the operational trade
functions that traditionally reside with
ports of entry and port directors to the
Centers and Center directors. The
Centers were established in strategic
locations around the country to focus
CBP’s trade expertise on industryspecific issues and provide tailored
support for importers. CBP established
these Centers to facilitate trade, reduce
transaction costs, increase compliance
with applicable import laws, and
achieve uniformity of treatment at the
ports of entry for the identified
industries. On December 20, 2016, CBP
published an interim final rule in the
Federal Register (81 FR 92978) which
codified the role of the Centers. This
interim final rule transferred to the
Centers and Center directors a variety of
post-release trade functions that were
handled by port directors, including
decisions and processing related to
entry summaries; decisions and
processing related to all types of
protests; suspension and extension of
liquidations; decisions and processing
concerning free trade agreements and
duty preference programs; decisions
concerning warehouse withdrawals
wherein the goods are entered into the
commerce of the United States; all
functions and decisions concerning
country of origin marking issues;
functions concerning informal entries;
and classification and appraisement of
merchandise.
With the transfer of trade functions to
the Centers, a significant portion of
these activities, including entry
summary and post-summary, are now
handled directly by the Centers. The
Center structure is based on subject
matter expertise, as opposed to
geographic location, placing them
outside of the district system as it
currently exists. The current broker
regulations based on the district system
do not fully reflect how trade functions
are being processed by CBP.

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to operate through a single, national
permit. The amendments proposed in
this NPRM incorporate the feedback
received from the broker community, as
well as recommendations made by the
COAC, and aim to reflect the modern
CBP operating environment, the
importance of electronic mail (email) as
a means of communication, and the
electronic processes available for the
acceptance of broker information which
should alleviate some burden on the
ports, brokers, and importers.
CBP proposes to modernize the
customs broker regulations contained in
19 CFR part 111 to align with the
development of CBP trade initiatives,
including ACE and the Centers.
Specifically, this document proposes to
transition all brokers to national permits
and expand the scope of the national
permit authority to allow national
permit holders to conduct all customs
business throughout the customs
territory of the United States. To
accomplish this, CBP proposes to
eliminate broker districts, district
permits, district permit waivers, and the
requirement for brokers to maintain
district offices. Upon adoption of a final
rule, CBP will provide guidance to those
brokers with only a district permit(s)
explaining the process to transition their
district permit(s) to a national permit.
CBP is also proposing, among other
changes, to update the responsible
supervision and control oversight
framework, ensure that customs
business is conducted within the United
States, and require that the customs
broker have direct communication with
the importer. The proposed changes are
designed to enable customs brokers to
meet the challenges of the modern
operating environment while
maintaining a high level of service in
customs business.
Currently, the broker license
application fee is $200. 19 CFR
111.12(a); 111.96(a). In conducting a
study on the costs associated with the
broker license application, CBP
determined that fees of $463 for
individuals and $815 for business
Discussion of Proposed Amendments
entities (i.e., corporations, partnerships,
Proposed Major Changes to How Brokers and associations) would be necessary to
May Operate
recover the costs associated with
Over the past several years CBP has
reviewing the customs broker license
conducted outreach to the broker
application and conducting the
community through webinars, port
necessary vetting for individuals and
meetings, and broker association
business entities. However, in an effort
meetings, to solicit feedback on the role to minimize the financial burden to
of the broker in this updated business
prospective customs brokers while also
environment. In addition, in light of the recovering some of the increasing costs
changes to CBP’s operational structure
associated with reviewing the customs
and electronic capabilities, the
broker license application and
conducting the necessary vetting, CBP is
Commercial Customs Operations
proposing to increase the customs
Advisory Committee (COAC)
broker license application fee to only
recommended that CBP enable brokers
The other relevant major development
was the creation of ACE. In an effort to
modernize the business processes
essential to securing U.S. borders,
facilitating the flow of legitimate
shipments, and targeting illicit goods
pursuant to the Customs Modernization
Act (Mod Act) (passed as part of the
North American Free Trade Agreement
Implementation Act (NAFTA), Pub. L.
103–182 § 623 (1993)), and the Security
and Accountability for Every (SAFE)
Port Act of 2006 (Pub. L. 109–347, 120
Stat. 1884), CBP developed ACE to
eventually replace the Automated
Commercial System (ACS) as the CBPauthorized electronic data interchange
(EDI) system.
On October 13, 2015, CBP published
an interim final rule in the Federal
Register (80 FR 61278) that designated
ACE as a CBP-authorized EDI system.
The designation of ACE as a CBPauthorized EDI system was effective
November 1, 2015. In the interim final
rule, CBP stated that ACS would be
phased out and anticipated that ACS
would no longer be supported for
electronic entry and entry summary
filing. Filers were encouraged to adjust
their business practices so that they
would be prepared when ACS was
decommissioned.
ACE now offers the operational
capabilities necessary to enable users to
transmit a harmonized set of import
data elements, via a ‘‘single window,’’ to
obtain the release and clearance of
goods. As a result, the International
Trade Data System (ITDS) eliminates
redundant reporting requirements and
facilitates the transition from paperbased reporting and other procedures to
faster and more cost-effective electronic
submissions to, and communication
among, government agencies. These
electronic capabilities that allow brokers
to file entry information in ACE reduce
the need for brokers to be physically
close to the ports of entry, as currently
required under the district permit
regulations.

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Federal Register / Vol. 85, No. 109 / Friday, June 5, 2020 / Proposed Rules

$300 for individuals and $500 for
business entities. While CBP is
proposing to raise the application fees,
there will be several cost savings as a
result of eliminating the district permit
requirement and other proposed
changes to the broker regulations. The
current application fee for a district or
national permit is $100 per permit. 19
CFR 111.19(a); 111.96(b). In addition, a
customs broker must pay an annual
customs broker permit user fee of
$147.89 for each district and national
permit that they hold. 19 CFR 24.22(h).
The annual customs broker permit user
fee is subject to adjustment each fiscal
year in accordance with the Fixing
America’s Surface Transportation Act
(FAST Act). 19 CFR 24.22(k). 84 FR
37902 (August 2, 2019). For a complete
discussion of the cost/benefit analysis
for adjusting the fees, see the ‘‘Executive
Orders 13563, 12866, and 13771’’
section below.
A summary of the specific proposed
changes to 19 CFR part 111 is set forth
below.

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Part 111
As discussed in the Background
section above, CBP published an interim
final rule that transferred certain trade
functions from the port director to the
Center director. Similarly, certain broker
management functions previously
performed by the port director will be
transferred to the Centers as part of this
proposed rule. As a result, CBP
proposes replacing references in part
111 to the ‘‘ports’’ and ‘‘port directors’’
with references to ‘‘the Centers’’ and
‘‘directors of the designated Centers’’
(discussed further below). Specifically,
CBP proposes amendments to sections
111.1, 111.2, 111.12, 111.14, 111.15,
111.16, 111.19, 111.21, 111.28, 111.30,
111.45, 111.56, 111.57, 111.59, 111.60,
111.61, 111.62, 111.63, 111.64, 111.67,
111.72, 111.78, and 111.96. (19 CFR
111.1, 111.2, 111.12, 111.14, 111.15,
111.16, 111.19, 111.21, 111.28, 111.30,
111.45, 111.56, 111.57, 111.59, 111.60,
111.61, 111.62, 111.63, 111.64, 111.67,
111.72, 111.78, 111.96). In addition,
CBP proposes to add a definition of a
new term, ‘‘designated Center,’’
discussed under Subpart A below.
Subpart A, General Provisions
Definitions for terms used throughout
part 111 are found in § 111.1. CBP
proposes to add three new terms:
‘‘appropriate Executive Director, Office
of Trade’’, ‘‘broker’s office of record’’
and ‘‘designated Center.’’
The term ‘‘appropriate Executive
Director, Office of Trade’’ defines the
Executive Director within the Office of
Trade who has been delegated first level

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decision making authority on broker
management related issues. The
appropriate Executive Director, Office of
Trade is the Executive Director
responsible for broker management.
The term ‘‘broker’s office of record’’
defines the office designated by a
customs broker as the broker’s primary
location that oversees the
administration of all activities
conducted under a national permit.
Currently, a broker is required to
maintain a physical office in each
district where he or she is permitted.
See 19 CFR 111.19. Under the proposed
national permit system, the broker will
have the freedom to determine where to
establish his or her office(s) within the
customs territory of the United States. In
order to ensure reliable channels of
communication between CBP and the
broker, CBP proposes that the broker’s
office of record must be provided in the
application for a national permit and
kept up to date. The term ‘‘designated
Center’’ defines the Center of Excellence
and Expertise through which an
individual, partnership, association, or
corporation submits an application for a
broker’s license, or as otherwise
designated by CBP for currently
licensed brokers. Upon adoption of a
final rule, CBP will provide guidance
informing licensed brokers of the
designated Center for license and permit
administration purposes. Currently, an
applicant submits his or her broker
license application to the director of the
port where the applicant intends to do
business. See 19 CFR 111.12. The port
where an applicant submits his or her
license application serves as the
primary point of contact between CBP
and the broker for administrative
purposes. Under the proposed changes,
the designated Center would become the
primary point of contact.
This document also proposes to
remove the definitions for ‘‘district’’ and
‘‘region’’ found in § 111.1. Given that
these two terms relate specifically to
district permits and this document
proposes to eliminate district permits,
these terms will no longer be necessary.
In addition, CBP proposes to amend
three terms found in § 111.1: ‘‘Assistant
Commissioner,’’ ‘‘permit,’’ and
‘‘responsible supervision and control.’’
(19 CFR 111.1). The Trade Facilitation
and Trade Enforcement Act of 2015
(TFTEA) (Pub. L. 114–125), signed into
law on February 24, 2016, changed the
title ‘‘Assistant Commissioner’’ for the
Office of Trade to ‘‘Executive Assistant
Commissioner.’’ TFTEA also changed
the name of the ‘‘Office of International
Trade’’ to the ‘‘Office of Trade.’’ As a
result, CBP proposes to update these
terms in the definition of Assistant

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Commissioner. Corresponding changes
to reflect the name Executive Assistant
Commissioner throughout part 111 are
proposed in §§ 111.1, 111.14, 111.15,
111.16, 111.17, 111.19, 111.28, 111.42,
111.45, 111.51, 111.52, 111.53, 111.55,
111.56, 111.57, 111.61, 111.67, 111.74,
111.76, 111.77, 111.79, and 111.81 (19
CFR 111.1, 111.14, 111.15, 111.16,
111.17, 111.19, 111.28, 111.42, 111.45,
111.51, 111.52, 111.53, 111.55, 111.56,
111.57, 111.61, 111.67, 111.74, 111.76,
111.77, 111.79, 111.81). Corresponding
changes to reflect the name Office of
Trade throughout part 111 are proposed
in §§ 111.1, 111.19 and 111.30. (19 CFR
111.1, 111.19, 111.30).
The current definition of ‘‘permit’’
means any permit issued to a broker
under § 111.19. CBP proposes to change
the word ‘‘any’’ to ‘‘a’’ to account for the
proposed elimination of district permits.
Without district permits, the only
permit available under § 111.19 will be
a national permit.
The current definition of ‘‘responsible
supervision and control’’ in § 111.1
provides a list of factors that CBP will
consider in determining whether a
broker is exercising responsible
supervision and control. CBP has
determined that the factors which CBP
will consider in determining whether a
broker is exercising responsible
supervision and control should be set
forth in revised § 111.28, entitled,
‘‘Responsible supervision.’’ As a result,
this document proposes to amend the
definition of ‘‘responsible supervision
and control’’ by moving the list of
factors from §§ 111.1 through 111.28.
This document proposes to re-order
the definition of ‘‘Department of
Homeland Security’’ so that it appears
in proper alphabetical order between
the existing definition of ‘‘Customs
business’’ and the new definition of
‘‘Designated Center.’’
Elimination of District Rule
The current regulations in § 111.2
require a customs broker to maintain a
license and a district permit. To account
for the increased electronic capability
that the ACE Single Window now
allows, this document proposes
amendments to the customs brokers
permitting framework. Currently, a
district permit is the official document
that allows a licensed customs broker to
conduct customs business on behalf of
others in a particular geographic area
known as a broker district. A district
permit is required when a broker has
been issued a broker license and intends
to conduct customs business in a
particular broker district. If a broker
intends to conduct customs business at
ports within multiple broker districts, a

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broker must apply for a district permit
for each broker district where the broker
plans to conduct customs business.
Alternatively, a customs broker may
apply for a district permit waiver
limited to the geographical region in
which the broker operates.
In addition to district permits, CBP
regulations provide for a national permit
which allows a broker to conduct only
four activities in all districts: Place an
employee in the facility of a client for
whom the broker is conducting customs
business; file electronic drawback
claims; participate in remote location
filing; and make representations before
Customs on issues arising out of an
entry or concerning merchandise
covered by an entry after the entry
summary has been accepted. See current
19 CFR 111.2(b)(2)(i)(A–D).
This document proposes to eliminate
district permits and allow a national
permit holder to conduct any type of
customs business within the customs
territory of the United States. This
represents a full expansion of the
activities allowed under a national
permit. CBP has determined that brokers
may need to make contact with CBP
personnel across the customs territory
due to the existence of the Centers and
the increasingly automated
environment, so there is no longer a
reason to restrict national permit
holders to the four activities currently
allowed. To achieve these changes, CBP
proposes to amend the title of § 111.2 by
removing the word ‘‘district.’’ CBP also
proposes to replace references to
‘‘Customs’’ with ‘‘CBP’’ and references
to ‘‘the port director’’ with ‘‘the director
of the designated Center’’ which will
allow the agency greater flexibility to
conduct broker management at the
ports, the Centers, or at Headquarters.
The most significant changes proposed
would amend paragraph 111.2(b) by
renaming paragraph (b) as, ‘‘National
Permit.’’ In addition, CBP proposes to
remove the existing text in paragraphs
(b)(1) and (b)(2) and replace them with
a sentence reading, ‘‘A national permit
issued to a broker under § 111.19 of this
part will constitute sufficient permit
authority for the broker to conduct
customs business within the customs
territory of the United States as defined
in § 101.1 of title 19.’’
Customs Business
Section 111.3 is currently reserved.
CBP proposes a new § 111.3 entitled,
‘‘Customs business.’’ The proposed new
section contains two paragraphs.
Proposed paragraph (a) requires that
customs business must be conducted
within the customs territory of the
United States. This is CBP’s current

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practice, and the broker community and
CBP have agreed that this requirement
should be set forth in the regulations.
Proposed paragraph (b) requires each
broker to maintain a current point of
contact for issues related to the
transaction of customs business.
Subpart B, Procedure To Obtain
License or Permit
Once a prospective broker passes the
customs broker examination, he or she
must obtain a license before he or she
is allowed to conduct customs business
on behalf of others. Section 111.12 sets
forth the application requirements to
obtain a license. Paragraph (a) describes
the license application procedures and
fee requirements. Paragraph (b) explains
that notice will be posted at the ports
where applications are received and that
written comments on the applicants are
invited. Paragraph (c) describes the
procedures for the withdrawal of an
application for a broker license.
In paragraph 111.12(a), CBP proposes
to update the place of submission for an
application from the port where the
broker intends to do business to the
Center designated by CBP after the
applicant has passed the brokers exam.
References to port director will become
Center director throughout this
paragraph. CBP also proposes to
eliminate the requirement in paragraph
111.12(a) that an application be
submitted under oath to ease the burden
on applicants. CBP also proposes to
remove the language prescribing the
method by which applicants are
required to submit fingerprints since
they are no longer collected via
fingerprint cards, but rather through
CBP systems. Eliminating restrictions on
the methods for collecting fingerprints
would provide CBP as well as the
applicant with greater flexibility.
Currently, a Center director may reject
an application as improperly filed if it
fails to meet one of the basic
requirements set forth in § 111.11. CBP
proposes to add wording to this section
to allow a Center director to reject an
incomplete application as well.
Currently, an applicant must submit
two copies of the application under oath
with a $200 application fee and
supporting documentation to the port
where he or she intends to do business.
The application fee is currently the
same for both individual and business
license applicants. As part of the review
of part 111, CBP conducted a fee study
and determined that CBP would need to
collect fees of $463 for individuals and
$815 for business entities (i.e.,
corporations, partnerships, and
associations) to recover the costs
associated with reviewing the customs

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34839

broker license application and
conducting the necessary vetting for
individuals and business entities. The
fee study documenting the proposed fee
changes, entitled ‘‘Customs Broker
License Application Fee Study,’’ has
been included in the docket of this
rulemaking (Docket No. USCBP–2020–
0009). If implemented, however, this fee
rate could become an economic
disincentive to those pursuing a career
as a customs broker. In an effort to
minimize the financial burden to
prospective customs brokers while also
recovering some of the increasing costs
associated with reviewing the customs
broker license application and
conducting the necessary vetting, CBP
has decided not to increase the fees to
that level but to limit the increase of the
customs broker license application fee
from $200 to only $300 for an
individual license application, and from
$200 to $500 for a partnership,
association, or corporation license
application.
CBP proposes to not set forth the
specific application fee in § 111.12 but
to cross-reference the relevant fees
provision in part 111 at § 111.96(a). CBP
proposes similarly to streamline the
regulations by removing specific fee
amounts throughout part 111 and
replacing them with references to the
relevant paragraph of the fees provision
found in § 111.96.
CBP proposes to remove paragraph (b)
of § 111.12 on posting notice of
applications because CBP has not found
that this provision provides the agency
with any useable information. Very little
information was received from the
public in response to the posted notice
of applications and the information
obtained through a background
investigation is sufficient for CBP to
make a determination on the broker
license application. In § 111.12(c), CBP
proposes to replace ‘‘port director’’ with
‘‘director of the designated Center’’ and
to remove the specific application fee
amount for the reason discussed above.
Section 111.13 provides details and
procedures for the customs broker
examination for an individual broker’s
license. CBP proposes to remove the
references to the $390 examination fee
amount throughout this section while
retaining the cross-reference to § 111.96
which lists all of the relevant fees in one
section. Paragraph (c) describes the
circumstances under which a special
examination can be requested, including
when a brokerage firm loses the
individual broker who was exercising
responsible supervision and control
over an office in another district. Due to
the proposed elimination of district
permits and the corresponding

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requirement to employ at least one
individual broker to exercise
responsible supervision and control
over the customs business conducted in
each district, CBP proposes to revise the
third sentence in paragraph (c) to reflect
the elimination of district permits.
Paragraph (e) describes exam results
given to the examinee by written notice
and paragraph (f) explains how an
examinee can file a written appeal of a
failing grade. CBP proposes to amend
both paragraphs to allow the use of
written or electronic notice of the exam
results as well as written or electronic
appeal requests and decisions.
Examinees who wish to appeal the
examination results or request review of
the appeal decision should submit those
requests in accordance with the
instructions provided in the results
letter.
Section 111.14 describes the
investigation of a license applicant. CBP
proposes to update the title of § 111.14
to specify that the investigation being
conducted is on the background of the
license applicant. In the past, a
background investigation had been
conducted by an Immigration and
Customs Enforcement (ICE) special
agent in charge. However, because CBP
now uses its own automated systems to
conduct broker background
investigations and no longer refers
applications to an ICE special agent in
charge, CBP proposes to remove
paragraph (a) on referral of applications
for investigation. CBP proposes
redesignating paragraph (b) as paragraph
(a). Currently, § 111.14 states explicitly
that an investigation of the applicant is
based on the application. CBP is
clarifying that the scope of the
background investigation specifically
includes information obtained as part of
the interview. CBP proposes to include
information from the interview in
redesignated paragraph (a)(1) to reflect
that any willful misstatements or
omission of pertinent facts made either
on the application or during the
interview can provide grounds for
denying a broker license. See 19 CFR
111.16. As CBP examines an applicant’s
business integrity, which includes
financial reports as part of the
background investigation, CBP proposes
to add financial responsibility to the
scope of that background investigation
to make clear that it is part of the
background investigation. CBP also
proposes to expand the scope of
background investigation to include any
association with any individuals or
groups that may present a risk to
national security or a risk to the revenue
collection of the United States. This
addition would allow CBP the flexibility

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to deny a broker license to an individual
associated with terrorist groups,
organized crime, or groups advocating
the overthrow of the government.
Current paragraphs (c) and (d) are
redesignated as (b) and (c), respectively,
in § 111.14. In redesignated paragraph
(b), CBP proposes to replace port
director with director of the designated
Center. In addition, CBP proposes to
update the phrase ‘‘report of
investigation’’ to ‘‘supporting
documentation’’ because background
investigations are no longer conducted
by ICE. Redesignated paragraph (c)
currently requires the applicant to
appear in person before one or more
representatives of the Assistant
Commissioner for the purpose of
undergoing further written or oral
inquiry into the applicant’s qualification
for a license. To allow greater flexibility
for both CBP and the applicant, CBP
proposes amendments to redesignated
paragraph (c) to include other approved
methods of communication in addition
to the requirement that the applicant
make an in-person appearance before
the appropriate Executive Director,
Office of Trade. In addition, CBP
proposes to remove the word
investigation in paragraph (c), while
retaining the reference to additional
inquiry, so as not to cause confusion
with the primary background
investigation.
Section 111.16 provides the notice
procedures and grounds for denial of a
license. Paragraph (b) of § 111.16 sets
forth the grounds for denial of a license.
Currently, the grounds for denial of a
license include: (1) Any cause which
would justify suspension or revocation
of the license of a broker; (2) failure to
meet any of the basic requirements for
a license; (3) failure to establish
business integrity and good character;
(4) any willful misstatement of pertinent
facts in the license application; (5) any
conduct which would be deemed unfair
in commercial transactions; or (6) a
reputation or record of criminal,
dishonest, or unethical conduct. CBP
proposes to expand the grounds
sufficient to justify denial of a license to
also include: The failure to establish
financial responsibility; the omission of
pertinent facts in the application or
interview; detrimental commercial
transactions; and any other relevant
information uncovered over the course
of the background investigation.
Section 111.17 sets forth the review
procedures in the event that a license
application is denied.
In paragraph (a), CBP proposes
tightening the language regarding an
applicant’s request to provide additional
information or arguments in support of

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a denied application. In addition, CBP
proposes adding telephone and other
acceptable means to the methods of
communication available by which an
applicant may request to provide further
information to CBP when an application
is denied. This addition would provide
greater flexibility for both CBP and the
applicant.
Section 111.18 governs reapplication
for a license. CBP proposes to add a
requirement that previously denied
applicants address how the deficiencies
in their prior applications have been
remedied. This change ensures that
those applicants filing a reapplication
do not simply file the same application
again.
Elimination of District Permits
Section 111.19 provides the
procedures for obtaining broker permits,
responsible supervision and control
requirements for permits, and review
procedures for the denial of a permit.
Currently, an initial district permit is
issued, with the $100 permit fee waived,
when a broker’s license is granted. A
broker may subsequently apply for
additional district permits and a
national permit. An application fee of
$100 is required for each additional
district permit or for a national permit.
19 CFR 111.19(b) and (f); 111.96(b). In
addition, all permits, district and
national, are subject to an annual
customs broker permit user fee which
has been set at $147.89 for fiscal year
2020. 19 CFR 24.22(h); 111.96(c). 84 FR
37902 (August 2, 2019). Currently,
national permits are issued by the
Broker Management Branch at CBP
Headquarters.
The COAC issued a recommendation
that CBP enable brokers to operate
through a single, national permit. The
full text of the COAC recommendations,
‘‘Commercial Customs Operations
Advisory Committee Term to Date
Recommendations (4/27/16, 7/27/16,
11/17/16, 3/1/17)’’ can be found in
Docket No. USCBP–2020–0009. The
COAC further explained that CBP must
modernize its permitting framework to
align broker permitting with the
challenges and opportunities of 21st
century electronic entry and entry
summary processing. Upon due
consideration of COAC’s
recommendation, and other input
received by CBP from the brokerage
community, this document proposes to
amend CBP’s permit issuing procedures
in § 111.19. CBP proposes to eliminate
district permits to move to a nationalonly permit system and to revise the
heading text to reflect this change.
Specifically, CBP proposes to revise

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paragraph (a) to reflect the general
purpose of a national permit.
Current paragraph (a) provides that
each person granted a broker’s license
will also receive a district permit for the
district of the port where the license
was delivered without paying the
permit application fee. 19 CFR
111.19(a); 111.96(b). Under this
proposal, with the elimination of the
district permit, there will no longer be
a need for a customs broker to have
more than one permit. As a result, CBP
will no longer issue the first permit free
of charge. Instead, any applicant who
obtains a passing grade on the
examination for an individual broker’s
license may apply for a national permit.
The national permit application may be
submitted concurrently with or after the
submission of an application for a
broker’s license.
Current paragraph (b) provides the
procedures for submission of an
application for an initial or additional
district permit. (19 CFR 111.19(b)). CBP
proposes to revise this paragraph to
describe the procedures for application
and issuance of a national permit, taking
much of the content of current
paragraph (f) describing the current
application for a national permit. The
revisions include general procedures
and specific application requirements.
An application for a national permit
must be in the form of a letter or CBPapproved electronic submission to the
director of the designated Center and
must include the following: Broker
license number and date of issuance if
available; the name and title of the
national permit qualifier for
partnership, association, or corporation
applicants; legal status and business
name information for partnership,
association, or corporation applicants;
contact information of the office
designated as the office of record as
defined in § 111.1; contact information
for the licensed broker or
knowledgeable employee responsible
for issues related to the transaction of
customs business; contact information
for each individual broker employed by
partnership, association, or corporation
applicants; a list of all employees, with
required employee information; a plan
for responsible supervision, control and
compliance; location where records will
be maintained; contact information for
the knowledgeable employee
responsible for customs and financial
recordkeeping; and a receipt or other
evidence that all required fees have
been paid. The fees must be paid at the
designated Center or online with
submission of the permit application. In
addition, the proposed amendments set
forth that the national permit applicant

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will exercise responsible supervision
and control over the activities
conducted under the national permit. If
the application is on behalf of a
partnership, association, or corporation,
the applicant is not required to be an
officer of the partnership, association, or
corporation, but must be a licensed
broker employed by the partnership,
association, or corporation.
Current paragraph (c) of § 111.19
describes permit fees. (19 CFR
111.19(c)). As CBP is proposing to
eliminate district permits, CBP proposes
in a concurrent notice of proposed
rulemaking, published elsewhere in this
issue of the Federal Register,
conforming amendments to this section
by removing all references to fees for
district permits. (See ‘‘Removal of
References to Customs Broker District
Permit Fee’’ RIN 1515–AE43.)
Current paragraph (d) discusses
responsible supervision and control
requirements in the district permit
context as well as procedures for
obtaining a district permit waiver in
situations that qualify for exception. (19
CFR 111.19(d)). Under this proposal, the
responsible supervision and control
requirements are provided in § 111.28.
Since CBP proposes to eliminate district
permits, the need to maintain a place of
business at each port where an
application for a district permit has
been filed and to employ at least one
licensed broker in each district where a
permit is held, where those
requirements have not been waived, is
no longer necessary; accordingly, CBP
proposes to remove paragraph (d). The
elimination of these requirements
resulting from the proposal to move to
an expanded national permit system,
would greatly lessen the burden on
affected customs brokers of conducting
customs business throughout the U.S.
customs territory.
Current paragraph (e), describing CBP
action on a permit application and the
maintenance of a list of permitted
brokers, is redesignated as paragraph
(d). In redesignated paragraph (d), CBP
proposes to remove reference to district
permits, to replace port director with
director of the designated Center, and
update cross references within the
paragraph. In addition, the list of
permitted brokers will now be
maintained centrally by CBP as opposed
to by individual port directors. As
discussed above, current paragraph (f) is
revised and the current content has been
revised and included in new paragraph
(b).
Current paragraph (g) is redesignated
as paragraph (e) and CBP proposes
amending the paragraph heading to
insert the word ‘‘national’’ before

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‘‘permit.’’ Current regulations allow for
the presentation of information or
arguments in support of the application
by personal appearance, or in writing, or
both. This allows for, but does not
require, the presentation of additional
information to address any deficiencies
in the original application. Currently in
practice, many applicants appeal
withouth providing additional
information or arguments resulting in a
denial of the appeal. In redesignated
paragraph (e)(1), CBP proposes
tightening the language regarding the
request to clarify that the applicant must
provide additional information or
arguments in support of a denied
application. CBP proposes greater
flexibility for both CBP and the
applicant by allowing the information to
be presented in person, by telephone or
by other acceptable means.
Under the current regulations,
paragraph (d) requires district permit
holders to exercise responsible
supervision and control over activities
conducted under the district permit. As
district permits will be eliminated in
this proposed rule, CBP is proposing to
revise paragraph (f) to make clear that
the individual broker who qualifies the
national permit will exercise
responsible supervision and control
over the activities conducted under that
national permit.
Subpart C, Duties and Responsibilities
of Customs Brokers
Section 111.21 currently provides
requirements for broker records. CBP
proposes adding a new paragraph (b)
and redesignating current paragraphs (b)
and (c) as (c) and (d), respectively.
Proposed paragraph (b) provides that
each broker must provide notification to
his designated Center of any known
breach of electronic or physical records
relating to the broker’s customs
business. Notification to CBP must be
provided within 72 hours of the
discovery of the breach with a list of all
compromised importer identification
numbers. This information will allow
for better targeting analysis which
contributes to CBP’s overall risk
management approach.
In addition, CBP proposes to amend
redesignated paragraph (d) to require
identification of a designated
recordkeeping contact who must be a
knowledgeable employee who will serve
as the party responsible for broker-wide
financial and recordkeeping
requirements. Each broker must
maintain accurate and current contact
information for the designated
recordkeeping contact within a CBPauthorized electronic data interchange
(EDI) system. If a CBP-authorized EDI

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system is not available, the proposed
amendments allow for written
submission to the designated Center as
an alternative. Under a national permit
framework, the maintenance of current
broker points of contact will be essential
to facilitate efficient processing of
entries and entry summaries.
Section 111.23 sets forth the location
in which a broker may retain its records
relating to customs transactions.
Currently, paragraph (a) provides that a
customs broker may retain customs
records at any location within the U.S.
customs territory. (19 CFR 111.23(a)).
CBP proposes to amend paragraph (a) to
require that a customs broker must
maintain customs records, including
any electronic records, within the U.S.
customs territory. In addition, CBP
proposes removing the last sentence of
paragraph (a) dealing with the
examination of records by CBP. CBP
proposes to revise this sentence and
place it in a new paragraph (b) to
§ 111.25 discussed below.
Section 111.24 addresses the
confidentiality of broker records, stating
in part that the broker must not disclose
their contents or any information
connected with the records to any
persons other than the clients to whom
they pertain, the client’s surety on a
particular entry, and to CBP or other
U.S. government officials, except on
subpoena by a court of competent
jurisdiction. CBP interprets the current
provision to provide that, with limited
exceptions, including certain accredited
officers or agents of the United States
and the surety involved in a particular
transaction, brokers may not disclose
client information to third persons
except when ordered to by a court. To
overcome this confidentiality
requirement, a broker needs to merely
request, and receive, a written release
from the client authorizing disclosure of
that client’s information. CBP’s
longstanding position on this matter is
that absent written client consent, a
broker may not share client information.
CBP continues to believe that protection
of the client’s business information
remains a paramount concern. At the
same time, however, CBP recognizes
that the blanket prohibition of the
current regulation is no longer a good fit
for the more modern and efficient
business practices brought about by the
changing structure and environment of
the business community. As a result,
CBP proposes to amend § 111.24 by
providing an exception for information
that properly is available from a source
open to the public. The intent of the
additional language is to permit
disclosure of information that properly
is available from government sources or

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privately controlled sources, whether
via a subscription service or not. CBP
does not condone the disclosure of
information that was not obtained
properly and has been released without
proper authority.
To account for changes in
organizational structure, CBP also
proposes replacing the list of specific
covered government employees to
whom the broker records can be
disclosed with a general reference to
representatives of the Department of
Homeland Security. Finally, CBP
proposes to include court orders and
written authorization by the client in
the exemptions to the confidentiality
requirement.
Section 111.25 provides that a broker
must maintain records in a way that
they are readily available for inspection,
copying, reproduction or other official
use by authorized CBP personnel. This
document proposes to reorganize
§ 111.25 into three paragraphs:
Paragraph (a)—general; paragraph (b)—
examination request; and paragraph
(c)—recordkeeping requirements.
Proposed paragraph (a) contains all but
the last sentence of the current language
found in § 111.25. In addition, CBP
proposes replacing the list of specific
government representatives that may
inspect, copy, reproduce and use broker
records with a general reference to
representatives of the Department of
Homeland Security. Proposed paragraph
(b) contains language found in current
§ 111.23(a) which requires that
requested records be made available at
the broker district that covers the CBP
port to which the records relate. To
account for the proposed elimination of
broker districts, CBP proposes to amend
this language to require that the
recordkeeping contact designated in
§ 111.21(d) make requested records
available at a location specified by
Department of Homeland Security
(DHS) employees within thirty (30)
calendar days. This change would allow
CBP greater flexibility in where it could
examine the records.
Section 111.27 provides for the audit
or inspection of broker records. Due to
the creation of DHS and the subsequent
transfer of the U.S. Customs Service
from the Department of the Treasury to
DHS, CBP proposes to remove the
reference to officials of the Treasury
Department and update it with a
reference to DHS officials to reflect
current practice.
Responsible Supervision and Control
Section 111.28 provides specific
requirements relating to the exercise of
responsible supervision and control.
CBP is modifying the heading text to

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read ‘‘Responsible supervision and
control.’’ As part of its
recommendations to move to only a
national permit framework, the COAC
recommended that the section on
‘‘responsible supervision and control’’
include ‘‘requirements that customs
brokerage firms employ an adequate
number of licensed brokers to ensure
responsible supervision and control
over their customs business.’’ To
address this concern, CBP proposes to
add a sentence to paragraph (a) to read
as follows: ‘‘A sole proprietorship,
partnership, association, or corporation
must employ a sufficient number of
licensed brokers relative to the job
complexity, similarity of subordinate
tasks, physical proximity of
subordinates, abilities and skills of
employees, and abilities and skills of
the managers.’’
As noted above, this document
proposes to move the list of factors CBP
considers when determining whether a
customs broker is exercising responsible
supervision and control from the
definition of ‘‘responsible supervision
and control’’ in § 111.1 to paragraph (a)
of § 111.28 with some modifications and
additions to reflect the changes of
moving to only a national permit
framework. The current list of factors
found in § 111.1 states that CBP will
consider all factors listed. CBP proposes
to amend the introductory sentence of
the list of factors to state that CBP may
consider the relevant factors from
among those listed on a case-by-case
basis.
CBP proposes to retain the ten factors
currently found in § 111.1 with the
following amendments:
(1) CBP proposes to amend the first
factor which currently reads, ‘‘The
training required of employees of the
brokers,’’ to, ‘‘The training provided to
broker employees.’’ These proposed
changes are intended to place the
obligation to provide training of
employees on the broker.
(2) In the second factor which
currently provides for the issuance of
written instructions and guidelines to
employees of the broker, CBP proposes
to remove the word ‘‘written’’ to include
electronic resources.
(3) CBP proposes to amend the fourth
factor covering reject rates by
considering the reject rate relative to the
overall volume of transactions
conducted by the broker. Comparing the
number of rejections with the broker’s
overall volume of entries gives better
context to evaluate the quality of
responsible supervision and control.
(4) CBP proposes to change the word
‘‘maintenance’’ to ‘‘accessibility’’ in the
fifth factor which addresses CBP

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resources available to broker employees.
Simply maintaining current editions of
the relevant laws and regulations does
not indicate responsible supervision
and control, ensuring access to these
documents, whether hard copy or
electronic, is more important in
determining responsible supervision
and control.
(5) CBP proposes to amend the sixth
factor requiring the availability of ‘‘an
individually licensed broker’’ to ‘‘a
sufficient number of individually
licensed brokers’’ for necessary
consultation with broker employees to
better account for the proposed national
permit operating environment. This
change reflects the COAC
recommendation to establish a national
permit framework with the requirement
that brokers employ an adequate
number of licensed brokers to ensure
responsible supervision and control.
Under the current permit framework, a
licensed broker (usually the district
permit qualifier) must be present at the
physical office location in the district to
offer guidance to employees. Under the
proposed national permit framework it
will be crucial that licensed brokers are
readily available to employees, both in
person or virtually.
(6) CBP proposes to remove the
reference to ‘‘district’’ in factor nine
addressing permit qualifier involvement
in brokerage operations to correspond
with the proposed elimination of broker
districts.
Current factors three, seven, eight and
ten remain unchanged.
In addition, CBP proposes to add five
new factors that may be considered:
(1) The timeliness of processing
entries and payment of duty, tax, or
other debt or obligation owing to the
Government for which the broker is
responsible, or for which the broker has
received payment from a client;
(2) communications between CBP and
the broker;
(3) the broker’s responsiveness and
action to communications, direction,
and notices from CBP;
(4) communications between the
broker and its officer(s); and,
(5) the broker’s responsiveness and
action to communications and direction
from its officer(s).
The new factors are being proposed
due to their importance in the modern
brokerage environment and their
importance in evidencing the proper
transaction of customs business. A
broker filing entries late, paying the
government late, or not returning client
communications are all evidence of
failure to exercise responsible
supervision and control. A broker not
communicating well with CBP or the

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broker’s officer(s) (not returning calls or
emails, etc.) also evidences failure of
responsible supervision and control.
Paragraph (b) of § 111.28 describes a
broker’s requirement to report
information regarding its employees to
CBP. CBP proposes to restructure
paragraph (b) with (b)(1) covering
current employees, (b)(2) covering new
employees, and (b)(3) covering
terminated employees. With each of
these paragraphs CBP is proposing that
employee lists be submitted and
updated through a CBP-authorized
electronic data interchange (EDI)
system. If a CBP-authorized EDI system
is not available, the proposed
amendments allow for written
submission to the designated Center as
an alternative. This document also
proposes to provide uniformity for
reporting deadlines across the various
categories of employees. The proposed
changes would allow a broker thirty (30)
calendar days to notify CBP of changes
to any of the information required under
this section regardless of whether the
employee is current, new or terminated.
CBP proposes also to simplify the
employee information that must be
provided to account for the proposed
elimination of districts and moving to a
national permit-only system. The
proposed elements include: Name,
social security number, date and place
of birth, date of hire, and current home
address. This proposed change
represents a reduction in the
information reporting requirements.
Finally, CBP proposes removing the
requirement that the employee lists be
provided in writing to allow for
electronic submission.
Due to the reorganization of paragraph
(b), CBP proposes to redesignate current
paragraph (b)(3) as paragraph (c) and to
update the cross-references in new
paragraph (c) to account for proposed
changes to paragraph (b). In addition,
CBP proposes to redesignate current
paragraphs (c) and (d) as paragraphs (d)
and (e). Redesignated paragraph (d)
covers termination of a broker who is a
qualifying member of a partnership or a
qualifying officer of an association or
corporation. Redesignated paragraph (e)
addresses changes in ownership of a
broker. To account for the proposed
elimination of district permits, CBP
proposes to update the submission
requirement from each port through
which a permit has been granted to the
director of the designated Center in both
redesignated paragraphs.
Section 111.30 provides the
notification requirements for when a
broker changes his or her business
address, organization, name, or location
of business records, as well as

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information concerning the triennial
status report and procedures for the
termination of a brokerage business.
This document proposes changes to the
timing and method by which a broker
must notify CBP of changes in his or her
business address, organization name,
and other updates required by § 111.30.
Paragraph (a) covers change of address.
CBP proposes to revise paragraph (a) to
change the timing requirement from
immediate notification in writing to
notification within ten (10) calendar
days through a CBP-authorized
electronic data interchange (EDI)
system. EDI is the method in which the
trade transmits data electronically to
CBP systems. If a CBP-authorized EDI
system is not available, the proposed
amendments allow for written
submission to the designated Center as
an alternative. These changes are
intended to provide greater flexibility
for both the broker and CBP.
Paragraph (b) of § 111.30 covers
changes in an organization. CBP
proposes to revise the introduction to
paragraph (b) to change the timing
requirement from immediate
notification in writing to the port
director to notification within ten (10)
calendar days in writing to the director
of the designated Center. CBP then
proposes to redesignate current
paragraph (b)(2) as (b)(3) and adding a
new paragraph (b)(2) to require that a
brokerage notify CBP of the date on
which a licensed employee ceases to be
the national permit qualifier for
purposes of § 111.19(a), and the name of
the licensed employee who will succeed
as the permit qualifier. Currently, CBP
requires updated information when
there is a change in a brokerage’s license
qualifier. Under the proposed national
permit system, the licensed member or
officer who qualifies the brokerage for
the license may be different from the
licensed employee who qualifies the
brokerage for the national permit.
Paragraph (c) of § 111.30 covers name
changes. CBP proposes to amend
paragraph (c) to account for the
proposed elimination of district permits.
Paragraph (d) of § 111.30 describes the
requirements of the status report. CBP
proposes to update the paragraph
header to triennial status report to better
reflect industry terminology. In
addition, CBP proposes changes to
allow for electronic filing by allowing
submission of payment or valid proof of
payment with the triennial status report.
CBP also proposes to allow for filing
through a CBP-authorized EDI system
when available. If a CBP-authorized EDI
system is not available, the proposed
amendments allow for written

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submission to the designated Center as
an alternative.
CBP proposes to reorganize paragraph
(d)(2) in order to add a new paragraph
(d)(2)(ii). Specifically, current
paragraphs (d)(2)(i), (ii), and (iii)
become (d)(2)(i)(A), (B) and (C) and a
new paragraph (d)(2)(ii) is added to
read: An individual broker not actively
engaged in transacting business as a
broker must provide CBP his or her
current mailing address, and state
whether or not he or she still meets the
applicable requirements of §§ 111.11
and 111.19 and has not engaged in any
conduct that could constitute grounds
for suspension or revocation under
§ 111.53. This new paragraph is added
to ensure that CBP maintains current
contact information on inactive brokers.
Next, CBP proposes to reorganize
paragraph (d)(3) into paragraph (d)(3)(i)
which requires information on the
broker’s office of record as well as the
license and permit qualifier for the
partnership, association or corporation.
The proposed changes create consistent
use of terminology and reflect the
importance of maintaining current
contacts under the proposed national
permit framework. In addition, CBP
proposes a new paragraph (d)(3)(ii) to
require that a partnership, association or
corporation broker also affirm in their
triennial report that they continue to
meet all applicable requirements. The
proposed new paragraph is consistent
with the triennial reporting
requirements for individual brokers.
In paragraph (d)(4) of § 111.30
regarding failure to file a triennial report
timely, CBP proposes to remove
references to port director as the CBP
officer who transmits a notice of
suspension and update them with
references to CBP to provide the agency
with flexibility as to where CBP broker
management is conducted—at the port,
at a Center of Excellence and Expertise,
or at Headquarters. In addition, when a
broker wishes to have his or license
reinstated CBP proposes to allow a
broker to submit proof of payment of the
required fee within 60 days of the notice
of suspension at the time of the filing of
the required triennial report to allow for
online payment separate from
submission of the report. Finally, CBP
proposes to replace references to
Customs Bulletin with Federal Register
as the means of publishing notice of
broker license revocations to reflect
current practice. Documents published
in the Federal Register are reproduced
in the Customs Bulletin.
Section 111.32 governs false
information. CBP proposes to modify
the section to make clear that a broker
must not give, or solicit or procure the

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giving of, any information or testimony
showing that the broker should have
known that the information is false or
misleading.
In addition, CBP proposes to add a
new sentence requiring a broker to
document and report to CBP when the
broker separates or terminates the
broker’s representation of a client as a
result of the broker determining that the
client is intentionally attempting to
defraud or otherwise commit any
criminal act against the U.S.
Government. Under the current CBP
regulations, when brokers discover that
a client has not complied with the law
or made errors or omissions in
documents, affidavits, or other paper
required by law, the broker must advise
the client promptly of the
noncompliance, error, or omission. See
19 CFR 111.39(b). The proposed new
requirement puts an affirmative duty on
the broker to document and report to
CBP when the broker terminates
representation of a client as a result of
determining that the client is attempting
to defraud or otherwise commit any
criminal act against the U.S.
Government. This requirement covers
situations where a broker advises the
client of a noncompliance, error, or
omission, the client directs the broker to
continue such noncompliance, error, or
omission, and in response the broker
terminates its relationship with the
client. The proposed changes will allow
brokers to act as ‘‘force multipliers’’ in
combating fraud and other schemes
against the government.
Section 111.36 addresses broker
relations with unlicensed persons,
including freight forwarders. The
regulation sets forth conditions under
which a broker may compensate a
freight forwarder for referring brokerage
business. One of the conditions is that
the freight forwarder cannot, in a
compensation agreement, forbid or
prevent direct communication between
the importer or other parties in interest
and the broker. CBP proposes adding
drawback claimants to the persons that
a freight forwarder cannot forbid or
prevent direct communication with by a
broker in a compensation agreement. In
addition, CBP proposes a new
requirement that a broker must not rely
on a customs power of attorney granted
by a freight forwarder, but rather that
the broker must obtain a customs power
of attorney directly from the importer of
record or drawback claimant. This
proposed amendment is intended to
clarify that the freight forwarder cannot
serve as a barrier to communications
between the broker and the importer of
record or drawback claimant and to
address issues of identity theft, supply

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chain security, fee transparency, and to
help ensure that unlicensed persons are
not benefitting from the customs
business conducted. This proposed
change is also consistent with a COAC
recommendation that CBP require that
brokers obtain a power of attorney
directly from the importer of record.
The COAC recommended further that
nothing should prevent the broker from
communicating directly with the
importer of record.
Section 111.39 describes the
requirements for brokers giving advice
to clients. Currently, paragraph (a)
requires a broker not to withhold from
or provide false information to a client.
CBP proposes moving part of the second
sentence from paragraph (a) to a new
paragraph (b) titled ‘‘Due diligence’’
and, in that paragraph, adding language
to specify that a broker must practice
due diligence in providing advice on the
proper payment of any duty, tax, or
other debt or obligation owing to the
U.S. Government.
CBP next proposes redesignating
current paragraphs (b) and (c) as a new
paragraphs (c) and (d). Current
paragraph (b) concerns what a broker
should do when the broker is aware that
a client has not complied with the law
or has made an error in or omission
from any document, affidavit, or other
paper which the law requires the client
to execute. That paragraph is proposed
to be updated by removing the word
‘‘paper’’ and replacing it with ‘‘record’’
so as to include any electronic records.
Finally, CBP proposes adding a new
sentence to the end of new paragraph (c)
to require that the broker must advise
the client on the proper corrective
actions required and retain a record of
the broker’s communication with the
client in accordance with 19 CFR
111.23. The proposed new language
adds an affirmative duty to document
the broker’s communication with the
client. This clarifies the brokers’ role as
‘‘force multipliers’’ by contributing to
the informed compliance of their
clients. There are no proposed changes
to redesignated paragraph (d).
Section 111.45 provides for
revocation of a broker’s license and/or
permit by operation of law, the
corresponding notification requirements
for CBP, and the continuing obligations
of the broker at issue. Paragraph (a)
describes revocation of a license. CBP
proposes to revise paragraph (a) to add
that the national permit for a
partnership, association, or corporation
will also be revoked if the partnership,
association, or corporation fails to
employ a licensed customs broker who
qualifies the national permit for any
continuous period of 180 days. In

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addition, CBP proposes to add a new
sentence to the end of paragraph (a) to
provide that if the license of a
partnership, association, or corporation
is revoked by operation of law, CBP will
notify the organization of the
revocation.
Paragraph (b) of § 111.45 describes
revocation of a permit. To account for
the proposed elimination of district
permits, CBP proposes to amend the
heading to read ‘‘Annual broker permit
fee,’’ to remove the current language
referring to requirements specific to
district permits, and to replace it with
language providing that: If a broker fails
to pay the annual permit user fee
pursuant to § 111.96(c), the permit is
revoked by operation of law. In
addition, the director of the designated
Center will notify the broker in writing
of the failure to pay and revocation of
the permit.
Current paragraph (c) of § 111.45
describes the notification of revocation
procedures. Since CBP proposes to
address notice in paragraphs (a) and (b),
it is proposed to rename paragraph (c)
‘‘Publication’’ and revise the provision
to provide that notice of any revocation
under this section will be published in
the Federal Register to reflect current
practice.
Paragraph (d) of § 111.45 provides
that even if a broker’s license or permit
is revoked by law, other sanctions may
still be applicable. CBP proposes to
update the second cross-reference to
reflect other proposed changes to this
section.
Subpart D, Cancellation, Suspension, or
Revocation of License or Permit, and
Monetary Penalty in Lieu of Suspension
or Revocation
Section 111.53 provides the grounds
for suspension or revocation of a license
or permit. CBP proposes to redesignate
current paragraph (g) as paragraph (h) in
order to add a new paragraph (g).
Proposed paragraph (g) will cover
convictions of committing or conspiring
to commit an act of terrorism as
described in section 2332b of title 18,
United States Code. (See 19 U.S.C.
1641(d)(1)(G)).
Section 111.55 covers the
investigation of complaints. This section
currently provides that every
disciplinary complaint or charge against
a broker will be forwarded for
investigation to the special agent in
charge. CBP does not refer all
complaints or charges to a special agent
in charge. To better reflect the current
practice, CBP proposes to replace
references to the special agent in charge
with references to the appropriate
investigative authority within DHS. In

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addition, CBP proposes to change the
word ‘‘will’’ to ‘‘may’’ to allow for
agency discretion in pursing civil or
administrative investigation of
disciplinary complaints against a
broker.
Section 111.56 provides for the
review of the investigation report. This
provision currently references the report
of investigation which is a term specific
to the process involving investigation by
the special agent in charge. Because CBP
no longer refers all complaints or
charges to the special agent in charge,
this document proposes to replace
‘‘report of investigation’’ with ‘‘report
on the investigation of complaints, or if
there is no report on the investigation of
complaints, other documentary
evidence,’’ to better reflect current
practice.
Section 111.62 describes the content
requirements for a notice of charges.
CBP proposes to amend paragraph (d) to
remove the 10-day notice of the time
and place of a hearing. CBP will
continue to provide notice of the time
and place of a hearing as provided for
in paragraph 111.64(a). In addition,
paragraph (e) states that the broker may
file verified answers to any charges
prior to the hearing. Currently, the
broker is required to file his or her
verified answers in duplicate. CBP
proposes to remove the requirement to
file in duplicate to better reflect the
current electronic business
environment.
Section 111.63 covers service of
notice and statement of charges.
Paragraph (a) covers individual brokers.
CBP proposes to amend paragraph (a)(2)
by removing the requirement that the
return card be signed solely by the
addressee. In practice, this is unlikely to
happen and amending the paragraph to
allow for certified mail, return receipt
requested, addressed to the broker’s
office of record brings the requirement
in to line with paragraph (c) on certified
mail and evidence of service. In
addition, CBP proposes to amend
paragraph (c) by removing the word
‘‘duly’’ and by adding reference to the
broker’s office of record. This change
will permit CBP to rely upon mailing to
the addresses provided to CBP by the
broker.
Section 111.67 provides for
information relating to the hearing.
Current paragraph (e) provides that the
Assistant Commissioner will designate
the government representative. CBP
proposes to remove paragraph (e) to
better reflect current practice as
attorneys from the Office of Chief
Counsel represent the government at all
broker hearings and work with the

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client offices to determine the necessary
witnesses and representatives.
Section 111.74 describes the decision
and notice of suspension, revocation or
a monetary penalty. CBP proposes to
remove the reference to publication in
the Customs Bulletin because
documents published in the Federal
Register are reproduced in the Customs
Bulletin.
Section 111.76 provides for
procedures by which a broker may
apply to CBP to reopen a case if an
appeal is not filed. Paragraph (a)
describes the grounds for reopening the
case. Currently paragraph (a) provides
that a broker may make written
application in duplicate to reopen the
case to have the order set aside or
modified. CBP proposes to remove the
requirement to file in writing and to file
in duplicate, and to allow for electronic
communication and to better reflect the
current electronic business
environment.
Section 111.77 describes how CBP
will provide notice of a vacated or
modified order. CBP proposes to remove
the reference to publication in the
Customs Bulletin because documents
published in the Federal Register are
reproduced in the Customs Bulletin.
Section 111.81 covers settlement and
compromise. CBP proposes to remove
the language regarding approval of the
Secretary of Homeland Security, or his
designee, as the authority to settle and
compromise has been delegated from
the Secretary of Homeland Security to
the Commissioner of U.S. Customs and
Border Protection and subsequently to
the Executive Assistant Commissioner,
as discussed in detail below, making
such approval no longer necessary.
Subpart E, Monetary Penalty and
Payment of Fees
Section 111.91 provides the grounds
for imposition of a monetary penalty
and sets forth the maximum penalty.
CBP proposes to update the cross
reference to § 111.53 to reflect the
additional grounds for suspension or
revocation of a license or permit
proposed in this document.
Section 111.96 describes fees required
throughout part 111. As discussed
above, CBP has conducted a fee study to
review the license application fee. The
fee study documenting the proposed fee
changes, entitled ‘‘Customs Broker
License Application Fee Study,’’ has
been included in the docket of this
rulemaking (Docket No. USCBP–2020–
0009). Paragraph (a) describes the
license application fee, the examination
fee and the fingerprint fee. The current
license application fee is $200. Based on
the findings of the fee study, CBP

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proposes to increase the license
application fee and charge different fees
for individual license applications and
partnership, association or corporation
license applications. Specifically, CBP
proposes an increase in the license
application fee from $200 to $300 for an
individual license application and from
$200 to $500 for a partnership,
association, or corporation license
application.
Paragraph (b) of § 111.96 describes the
permit application fee. CBP proposes to
revise the paragraph to reflect the
proposed elimination of district permits.
Paragraph (c) of § 111.96 describes the
permit user fee. To reflect the proposed
elimination of district permits, CBP is
proposing in a concurrent notice of
proposed rulemaking, published
elsewhere in this issue of the Federal
Register, conforming amendments to
eliminate all references to customs
broker district permit fees, including
proposed amendments to paragraph (c)
of § 111.96 (See ‘‘Removal of References
to Customs Broker District Permit Fee’’
RIN 1515–AE43).
Paragraph (d) of § 111.96 describes the
status report fee. CBP proposes to
amend the paragraph header to read
triennial status report fee which
matches industry terminology. In
addition, CBP proposes to explain that
the triennial status report must be filed
through the CBP-authorized EDI system,
if available. If a CBP-authorized EDI
system is not available, the triennial
status report must be filed with the
director of the designated Center.

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Delegation of Authority
The Secretary of Homeland Security
and CBP officials are empowered to
delegate authority. Changes made in the
proposed regulations reflect areas where
the Secretary of Homeland Security and
CBP officials have, or might, delegate
certain decision-making authority. DHS
Delegation Number 7108 (May 5, 2015)
delegates the authority regarding the
denial, revocation, suspension, or
cancellation of customs brokers’
licenses and permits as well as
settlements and penalties from the
Secretary of Homeland Security to the
Commissioner of Customs and Border
Protection. Additional delegations of
authority that have been made within
CBP are reflected in the proposed
regulatory text. CBP proposes changes to
reflect these delegations in §§ 111.13,

111.14, 111.15, 111.16, 111.17, 111.19,
111.28, 111.30, 111.51, 111.52, 111.53,
111.55, 111.56, 111.57, 111.61, 111.66,
111.69, 111.70, 111.71, 111.72, 111.74,
111.75, 111.76, 111.77, 111.79, and
111.81. (19 CFR 111.13, 111.14, 111.15,
111.16, 111.17, 111.19, 111.28, 111.30,
111.51, 111.52, 111.53, 111.55, 111.56,
111.57, 111.61, 111.66, 111.69, 111.70,
111.71, 111.72, 111.74, 111.75, 111.76,
111.77, 111.79, and 111.81.) The
proposed changes reflect the delegation
orders in place to allow for greater
flexibility in administering brokerrelated decisions within CBP and DHS.
Nomenclature Updates
This document also proposes to
update the nomenclature throughout
part 111. As noted above, to reflect the
establishment of the Centers, CBP
proposes replacing references in part
111 to the ports and port directors with
references to the Centers and directors
of the designated Centers. Also
previously discussed, CBP proposes to
update all instances of Assistant
Commissioner to Executive Assistant
Commissioner and all instances of
Office of International Trade to Office of
Trade. In addition, CBP proposes a
grammatical change to paragraph (a)(1)
of § 111.42, by amending the word
‘‘Customs’’ to be in the lower case. (19
CFR 111.42). Finally, due to the
renaming of U.S. Customs to Customs
and Border Protection (CBP) this
document proposes to replace
references to Customs with CBP in
§§ 111.2, 111.12, 111.21, 111.25, 111.28,
111.30, 111.53, 111.91, 111.92, 111.94,
and 111.96. (19 CFR 111.2, 111.12,
111.21, 111.25, 111.28, 111.30, 111.53,
111.91, 111.92, 111.94, 111.96).
Other Conforming Amendments
Part 24
Part 24 of title 19 of the CFR (19 CFR
part 24) sets forth the regulations
regarding customs financial and
accounting procedures. Section 24.1
provides for the collection of Customs
duties, taxes, fees, interest, and other
charges. To reflect the proposed
elimination of the district permit, this
document proposes conforming
amendments to § 24.1(a)(3)(i). Section
24.22 describes the customs
Consolidated Omnibus Budget
Reconciliation Act (COBRA) user fees
and limitations for certain services.
Specifically, paragraph (h) of § 24.22

describes the customs broker permit
user fee. In a concurrent notice of
proposed rulemaking, published
elsewhere in this issue of the Federal
Register, CBP proposes conforming
amendments to § 24.22(h) and (i)(9) to
eliminate all references to broker district
permit fees (See ‘‘Removal of References
to Customs Broker District Permit Fee’’
RIN 1515–AE43).
Part 111
The authority for part 111 currently
provides a specific authority citation for
§ 111.3. When the text of § 111.3 was
transferred to § 111.2 in a final rule
published in the Federal Register (65
FR 13880) on March 15, 2000, CBP
inadvertently did not revise the specific
authority citation for either section. CBP
proposes to correct this by revising the
specific authority citation for § 111.2 by
adding that this section is also issued
under 19 U.S.C. 1484 and 4798, and by
removing the specific authority citation
for § 111.3.
Executive Orders 13563, 12866, and
13771
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. Executive
Order 13771 (‘‘Reducing Regulation and
Controlling Regulatory Costs’’) directs
agencies to reduce regulation and
control regulatory costs and provides
that ‘‘for every one new regulation
issued, at least two prior regulations be
identified for elimination, and that the
cost of planned regulations be prudently
managed and controlled through a
budgeting process.’’
This rule is not a ‘‘significant
regulatory action,’’ under section 3(f) of
Executive Order 12866. Accordingly,
OMB has not reviewed this regulation.
This proposed rule is expected to be an
E.O. 13771 deregulatory action. CBP has
prepared the following analysis to help
inform stakeholders of the impacts of
this proposed rule.

TABLE 1—SUMMARY OF CHANGES AS A RESULT OF THE RULE
Provision

Section

111.1 ................................

Subpart A ..

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Change

Cost/benefit

Update/eliminate definitions; change
point of contact to designated Center.

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primary

Neutral—changes reflect current practice and
statutory changes.

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TABLE 1—SUMMARY OF CHANGES AS A RESULT OF THE RULE—Continued
Provision

Section

Change

Cost/benefit

111.2 ................................

Subpart A ..

$40,000 annualized net benefit. See section 3.14.

111.3 ................................

Subpart A ..

111.11 ..............................

Subpart A ..

111.12(a) ..........................

Subpart B ..

111.12(b) ..........................

Subpart B ..

111.13 ..............................

Subpart B ..

111.14 ..............................

Subpart B ..

111.16 ..............................

Subpart B ..

111.17 ..............................

Subpart B ..

111.18 ..............................

Subpart B ..

Eliminate district permits and require national
permits.
Requires customs business to be conducted
within the customs territory of the US; brokers
must maintain a point of contact.
Adds that Center director may reject an incomplete application.
Updates the place of submission for applications;
removes requirement that applications are submitted under oath.
Remove requirement to post notice of applications.
Revisions to reflect new national permit system;
written and electronic notification of examination results.
Clarifies that CBP may use information from the
interview in background investigation.
Expansion of the grounds to justify the denial of
a license.
Adds new method to communicate further information to CBP for appeal of an application denial.
Requires applicants to provide new or corrected
information when re-applying.

111.19 ..............................
111.19(b) ..........................

Subpart B ..
Subpart B ..

111.19(c) ..........................

Subpart B ..

111.19(d) ..........................

Subpart B ..

111.19(e) ..........................

Subpart B ..

111.19(g) ..........................

Subpart B ..

111.21 ..............................

Subpart C ..

111.23 ..............................

Subpart C ..

111.24 ..............................
111.25 ..............................

Subpart C ..
Subpart C ..

111.27 ..............................

Subpart C ..

111.28 ..............................

Subpart C ..

111.30 ..............................

Subpart C ..

111.32 ..............................

Subpart C ..

111.36 ..............................

Subpart C ..

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Replacing district permits with national permits ....
Revision of the procedures to apply for a permit
to account for the switch from district to national permits.
Revision of permit fees .........................................
Elimination of the requirement to maintain a
place of business in each port where a district
permit is held.
Language updates to reflect the change to national permits and designated Centers.
Clarifies applicants must provide additional information or arguments in support of a denied application; allows information to be provided
through various communication methods.
Requires brokers to notify CBP of any electronic
records breach and to provide CBP a designated point of contact for recordkeeping in
addition to the current contact provided for financial queries.
Requires that electronic records be stored within
the customs territory of the U.S.
Clarifies disclosure rules .......................................
Revises guidelines for CBP inspection of broker
records with the elimination of broker districts.
Update of language to reflect the transition of responsibilities from Treasury to DHS following
the creation of DHS.
Clarifying requirements in relation to responsible
supervision and control and allows for electronic submission of employee lists.
Modification to the timing requirement for when a
broker notifies CBP of information changes, including a new requirement for inactive brokers
to provide CBP with up-to-date contact information.
Places an affirmative burden on the broker to report to CBP when a broker terminates a client
relationship as a result of determining that the
client is attempting to defraud the U.S. government.
Modifies the requirements for brokers when dealing with freight forwarders.

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Neutral—clarifies current regulations and reflects
current practice.
Benefit—increases effeciency.
Benefit—increases efficiency and reduces the
burden on applicants.
Benefit—reduces the burden on CBP.
Neutral—the costs of the new fee system are addressed in section 3.14.
Neutral—reflects current practice.
Benefit—increases professionalism.
Benefit—greater flexibility.

Benefit—fewer application appeals will be rejected for lack of new information. Cost—applicants will need to expend time in collecting and
submitting information.
$40,000 annualized net benefit. See section 3.14.
Neutral—the process is very similar, but with a
national permit.
See ‘‘Removal of References to Customs Broker
District Permit Fee’’ RIN 1515–AE43.
Benefit—allows for greater flexibility and efficiency for brokers and CBP.
See above.
Benefit—increases professionalism and decreases time spent by CBP acquiring information. Cost—requires applicants to expend time
in providing additional information.
Benefit—enhances CBP’s risk management approach. See section 3.3/section 3.8.

Benefit—increases security. See section 3.3.
Benefit reduces confusion. See section 3.9.
Neutral—see section 3.4.
Neutral—reflects the current environment.

Benefit—increases flexibility. See section 3.10.

Benefit—increases professionalism, keeps CBP
better informed, and allows greater efficiency
for broker’s changing status. Cost—inactive
brokers will expend time to submit their information.
Cost—$2,907 annually
Benefit—improves CBP’s awareness of potential
illegal activity. See section 3.5.

Neutral—time spent does not change. See section 3.6.

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TABLE 1—SUMMARY OF CHANGES AS A RESULT OF THE RULE—Continued
Provision

Section

Change

Cost/benefit

111.39 ..............................

Subpart C ..

Neutral—reflects current practice See section
3.11.

111.45 ..............................
111.53 ..............................

Subpart C ..
Subpart D ..

111.55 ..............................

Subpart D ..

111.56 ..............................

Subpart D ..

111.62 ..............................

Subpart D ..

111.63 ..............................

Subpart D ..

111.67 ..............................

Subpart D ..

111.74 ..............................

Subpart D ..

111.76 ..............................

Subpart D ..

111.77 ..............................

Subpart D ..

111.81 ..............................

Subpart D ..

111.96 ..............................

Subpart E ..

Guidelines for how brokers may behave with clients; requires brokers to advise clients of corrective actions and maintain communication
records.
Updates to reflect the change to national permits
Adds conviction of committing or conspiring to
commit an act of terrorism to the grounds for
suspension or revocation of a license or permit.
Updates to reflect the current practice of not referring all complaints to a special agent.
Updates to reflect current practice in the investigation of a complaint.
Updates to requirements for notification of
charges to reflect new electronic options.
Removes the requirement that a return card be
signed solely by the addressee; permits CBP
to rely upon the mailing address provided by
the broker.
Updates to reflect the current practice of Office of
Chief Counsel representing the government.
Eliminates the requirement to publish suspension, revocation, or penalty notices in the Customs Bulletin.
Allows for electronic communication when filing
an appeal.
Eliminates the requirement that CBP provide notice of a vacated or modified order in the Customs Bulletin.
Updates to the signing requirement for a settlement to reflect delegation of authorities.
Updates to the user application fee ......................

lotter on DSK9F5VC42PROD with PROPOSALS2

1. Need and Purpose of Rule
The primary purpose of this rule is to
formalize recent changes in the
permiting of licensed customs brokers.
To take advantage of new technologies
and reflect a changing trade
environment, CBP is switching from a
district permit system to a national
permit system. Licensed brokers who
have traditionally been required to
apply for and operate under a permit for
each district in which they do business
may now work under a single, national
permit.
The rule also proposes changes in the
license application fees charged by CBP,
which CBP proposes to increase to cover
a greater portion of the costs CBP has
always faced. Because these costs are
being moved from CBP to brokers, they
are considered a transfer. Finally, the
rule contains several provisions meant
to professionalize the broker industry,
formalize current practices into
regulations, and adapt regulations to
reflect technological advancements. The
majority of brokers already follow many
of these practices, like storing records
electronically within the customs
territory of the United States and
reporting clients they know have
attempted to commit fraud. This rule
provides better and more concrete

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Neutral—specifies national permit.
Benefit—increases professionalism.
Neutral—reflects current practice.
Neutral—reflects current practice.
Neutral—reflects improved technology.
Benefit—increases efficiency.

Neutral—reflects current practice.
Benefit—reduces the burden on CBP.
Benefit—increases efficiency.
Benefit—reduces the burden on CBP.
Neutral—reflects delegation of existing authority.
See above.

guidance in these matters, at little or no
cost to CBP or customs brokers.
Monetized costs for customs brokers
would result from no longer receiving a
first district permit concurrent with a
broker’s license, and the requirement for
brokers to notify CBP when separating
from a client relationship due to
attempted fraud or criminal acts. The
five-year total monetized cost of the rule
ranges from $44,000 discounted at 3
percent to $39,200 discounted at 7
percent. The annualized cost is
approximately $9,600 using both 3 and
7 percent. Customs brokers who do not
concurrently receive their first district
permit with their brokers license would
save the cost of district permit fees.
Additionally, CBP and customs brokers
would save time for applying for and
reviewing district permit applications
and waivers. The five-year total
monetized cost savings from this rule
ranges from $227,100 discounted at 3
percent to $202,100 discounted at 7
percent. The annualized cost savings
ranges from $49,600 using a 3 percent
discount rate to $39,700 using a 7
percent discount rate. The switch to a
national permit and the other changes to
this rule lead to an overall net
monetized total five-year cost savings
ranging from $183,100 discounted at 3
percent to $163,000 discounted at 7

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percent. The net annualized cost savings
ranges from approximately $40,000 to
$39,700 using a 3 and 7 percent
discount rate, respectively.
Customs brokers are private
individuals and/or business entities
(partnerships, associations or
corporations) that are licensed and
regulated by CBP to assist importers in
conducting customs business. Customs
brokers have an enormous responsibility
to their clients and to CBP that requires
them to properly prepare importation
documentation, file these documents
timely and accurately, classify and
value goods properly, pay duties, taxes,
and fees, safeguard their clients’
information, and protect their licenses
from misuse.
In an effort to perform these duties
and responsibilities efficiently, customs
brokers have embraced recent
technological advances such as making
the programming and business process
changes necessary to use the Automated
Commercial Environment (ACE). ACE
provides a single, centralized access
point to connect CBP and the trade
community. Through ACE, manual
processes are streamlined and
automated, and the international trade
community is able to more easily and
efficiently comply with U.S. laws and
regulations. CBP itself has also

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endeavored to embrace these
technological advances, to not only
more efficiently perform its duties of
facilitating legitimate trade while
making sure that proper revenue is
collected, but also to provide more
efficient tools for customs brokers to file
and monitor the information
submissions necessary for a timely and
accurate entry filing. One of the central
developments that will allow CBP to
perform its operational trade functions
more effectively is the transition to the
Centers of Excellence and Expertise
(Centers). Beginning in 2012, CBP
developed a test to incrementally
transition the operational trade
functions that traditionally reside with
port directors to the Centers. The
Centers were established in strategic
locations around the country to focus
CBP’s trade expertise on industryspecific issues and provide tailored
support for importers. CBP established
these Centers to facilitate trade, reduce
transaction costs, increase compliance
with applicable import laws, and
achieve uniformity of treatment at the
ports of entry for the identified
industries. On December 20, 2016, CBP
published an interim final rule in the
Federal Register (81 FR 92978) ending
the Centers test and establishing the
Centers as a permanent organizational
component of CBP. The current broker
regulations are based on the district
system in which entry, entry summary,
and post-summary activity are all
handled by the ports within a permit
district. With the transfer of trade
functions to the Centers, a significant
portion of these activities, including
entry summary and post-summary, are
now handled directly by the Centers.
The Center structure is based on subject
matter expertise, as opposed to
geographic location, placing them
outside of the district system as it
currently exists. With this proposed
rule, CBP proposes to modernize the
regulations governing customs brokers
to better reflect the current work
environment and streamline the
customs broker permitting process.

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2. Background
It is the responsibility of CBP to
ensure that only qualified individuals
and business entities can perform
customs business on behalf of others.
CBP accomplishes this task by only
issuing licenses to individuals and
business entities that meet the below
criteria: 1
Individual customs broker license
requirements:
1 See 19 CFR part 111.

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• Must pass the customs broker
license examination within 3 years of
submitting the license application;
• Must be a U.S. citizen and attain the
age of 21 prior to submitting the license
application;
• Must possess good moral character;
and
• Must pay the requisite fee.
Business entity customs broker
license eligibility:
Partnerships
• Must have at least one member of
the partnership who is a licensed
customs broker; and
• Must pay the requisite fee.
Associations and Corporations
• Must have at least one officer who
is a licensed customs broker;
• Must be empowered under its
articles of association or articles of
incorporation to transact customs
business as a broker; and
• Must pay the requisite fee.
Currently, CBP requires all
prospective brokers, both individuals
and business entities, to submit CBP
Form 3124: Application for Customs
Broker License to the port of entry at
which they intend to conduct customs
business. CBP Form 3124 is used to
verify that prospective customs brokers
satisfy the requirements for receiving a
customs broker’s license. The customs
territory of the United States is divided
into seven customs regions. Within each
region, the customs territory of the
United States is further divided into
districts; there are currently
approximately 40 2 customs districts.3 4
Currently, a district permit is required
for each district in which a customs
broker intends to conduct customs
business. Each district permit requires a
one-time permit fee of $100 and an
annual user fee of $147.89.5 A customs
2 Source: Discussions with the CBP Broker
Management Branch on 3/15/2017.
3 Customs districts are not evenly divided
amongst the seven customs regions (one region may
have more or fewer customs districts than another).
4 In addition to the 40 geographically defined
customs districts, there are three special districts
that are responsible for specific types of imported
merchandise. According to the Broker Management
Branch, these special districts include districts 60,
70 and 80. District 60 refers to entries made by
vessels under their own power. District 70 refers to
shipments with a value under $800. District 80
refers to mail shipments. These three special
districts do not require the use of a licensed broker
with a specific district permit and as a result are
not affected by this provision.
5 19 CFR 24.22(h). The user fee is subject to
adjustment based on inflation. Proposed
amendments to the regulatory provisions regarding
the district permit user fee are found in the
companion Department of the Treasury NPRM
entitled. See ‘‘Removal of References to Customs
Broker District Permit Fee’’ RIN 1515–AE43.

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34849

broker has the option of receiving his/
her first district permit concurrently
with the receipt of the customs broker
license, in which case the $100 permit
fee is waived. Even if this option is
used, the customs broker is still
responsible for the annual user fee of
$147.89.6 However, this option is not
exercised often for individual customs
broker license holders. Currently,
according to a CBP Broker Management
Branch estimate, approximately two (2)
percent of individual customs broker
license holders get their first district
permit concurrently issued with the
receipt of their broker’s license. The
majority of individuals do not take
advantage of this benefit. Most licensed
brokers file exclusively under a
corporate permit and do not need to get
an individual permit, saving them the
annual user fee. On the other hand,
according to CBP’s Broker Management
Branch, 100 percent of current corporate
license holders get their first district
permit concurrently issued with their
customs broker license.
A broker who intends to conduct
customs business at a port within a
district for which the broker does not
have a permit must submit an
application for a district permit in a
letter to the director of the port at which
the broker intends to conduct customs
business. Each application for a district
permit must set forth or attach the
following:
• The applicant’s broker license
number and date of issuance;
• The address where the applicant’s
office will be located within the district
and the email address and telephone
number of that office;
• A copy of a document which
reserves the applicant’s business name
with the State or local government;
• The name, broker license number,
office address(es), telephone number,
and email address of the individual
broker who will exercise responsible
supervision and control over the
customs business transacted in the
district;
• A list of all other districts for which
the applicant has a permit to transact
customs business;
• The place where the applicant’s
brokerage records will be retained and
the name of the applicant’s designated
recordkeeping contact; and
• A list of all persons who the
applicant knows will be employed in
the district with all the required
employee information.
The applicant for the district permit
must have a place of business at the port
6 User fees are addressed in ‘‘Removal of
References to Customs Broker District Permit Fee’’
RIN 1515–AE43.

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lotter on DSK9F5VC42PROD with PROPOSALS2

where the application is filed, or must
have made firm arrangements
satisfactory to the port director to
establish a place of business, and must
exercise responsible supervision and
control of that place of business once
the permit is granted. Instead of a
customs broker getting multiple district
permits, he or she could also apply for
a national permit for the purpose of
transacting customs business in all
districts within the customs territory of
the United States as defined in 19 CFR
part 101. The national permit
application may be submitted
concurrently with or after the
submission of an application for a
broker’s license.
CBP first introduced national permits
in 2000 to allow a broker to conduct a
limited set of activities in districts for
which the broker does not have a
district permit. When it was first
introduced, a national permit allowed
licensed brokers to place an employee
in the facility of a client for whom the
broker is conducting customs business;
file electronic drawback claims;
participate in remote location filing; and
make representations after the entry
summary has been accepted. In the
years since the national permit was
introduced, and with the full
implementation of ACE, almost every
activity performed under a district
permit was added to the national
permit. Only those activities, such as
the filing of paper entries and certain
payment submissions, that require
physical presence at a port currently
require a district permit instead of a
national permit. With the national
permit system, these restrictions will no
longer apply. This proposed rule will
allow a national permit holder to
conduct any type of customs business in
all districts within the customs territory
of the United States. This represents a
full expansion of the activities allowed
under a national permit. CBP has
determined that in the increasingly
automated environment brokers may
need to make contact with CBP
personnel across the customs territory
and there is no longer a reason to
restrict national permit holders.
Currently, an application for a
national permit must be in the form of
a letter submitted to the director of the

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designated Center, and include the
following:
• The applicant’s broker license
number and date of issuance;
• If the applicant is a partnership,
association, or corporation, the name
and title of the national permit qualifier;
• The address, telephone number,
and email address of the office
designated by the applicant as the
broker’s office of record; that office will
be noted in the national permit when
issued;
• A copy of a document which
reserves the applicant’s business name
with the State or local government;
• The name, telephone number, and
email address of the licensed broker or
knowledgeable employee to be available
to CBP to respond to issues related to
the transaction of customs business;
• The name, broker license number (if
designated), office address, telephone
number, and email address of each
individual broker who will exercise
responsible supervision and control
over the customs business of the
applicant under the national permit;
• A supervision plan describing how
the broker will exercise responsible
supervision and control, including
compliance with § 111.28 (see 19 CFR
111.28);
• The place where the applicant’s
brokerage records relating to customs
business conducted under the national
permit will be retained and the name of
the applicant’s designated
recordkeeping contact (see 19 CFR
111.22 and 111.23);
• The name, telephone number, and
email address of the knowledgeable
employee responsible for broker-wide
records maintenance and financial
recordkeeping requirements;
• A list of all employees of the broker,
together with the specific employee
information prescribed in § 111.28(b) for
each of those employees (19 CFR
111.28(b)); and
• A receipt or other evidence showing
that the fees specified in § 111.96(b) and
(c) have been paid (19 CFR 111.96(b)
and (c)).
In an effort to modernize the
permitting process for customs brokers,
this proposed rule would eliminate the
district permitting process and
automatically grant each current district
permit holder a national permit. Upon

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adoption of a final rule, CBP will
provide guidance to those brokers with
only a district permit(s) explaining the
process to transition their district
permit(s) to a national permit.
Currently, customs brokers who do not
have a national permit must maintain an
office and have a separate district
permit for each district in which the
broker wants to conduct customs
business. For some brokers, this means
having many small offices across the
country. This rule removes the
requirement to have a separate local
office in each district in which customs
brokers do business. Since, under a
national permitting structure, customs
brokers are no longer required to have
a representative in each district in
which they conduct customs business,
brokers could organize themselves to
better suit their specific business needs.
Furthermore, brokers that currently
only hold active district permits will be
granted a national permit at no cost.
Upon adoption of a final rule, CBP will
provide guidance to those brokers with
only a district permit(s) explaining the
process to transition their district
permit(s) to a national permit.
According to CBP’s Broker Management
Branch, the customs brokers that will be
transitioned to national permits
represent 6 percent of active brokers.
The remainder either have no permit at
all or already have a national permit.
Projection of Customs Broker Licenses
and Permits
CBP’s Broker Management Branch
provided historical data from 2011–
2016, the full range of quality data
available, The 2,093 permitted brokers
hold a combined total of 3,067 active
district permits.7 This is an average of
approximately 1.5 district permits per
district permit holder. Using this figure,
we can project how many district
permits would have been held by
licensed brokers over the period of the
analysis, from 2017 through 2021 under
the baseline condition (i.e., if this rule
is not promulgated). This is shown in
Exhibit 2 below.
7 1,258 brokers who hold at least 1 district permit
concurrently hold a national permit. Additionally,
13 licensed brokers hold a national permit without
holding any district permits and are unaffected by
this rule.

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EXHIBIT 2—PROJECTION OF NEW INDIVIDUAL AND CORPORATE PERMITS
New
individual
licenses
issued
(10% annual
growth rate)

New
individual
permits
(13% of new
individual
licenses
× 1.5)

New
corporate
licenses
issued
(9% annual
growth rate)

New
corporate
permits
(100% of new
corporate
licenses
× 1.5)

2017 .................................................................................................................
2018 .................................................................................................................
2019 .................................................................................................................
2020 .................................................................................................................
2021 .................................................................................................................

762
839
922
1,015
1,116

149
164
180
198
218

97
106
115
126
137

146
159
173
188
205

Total ..........................................................................................................

4,654

908

581

871

Year

Note: Values may not sum to total due to rounding.

3. Proposed Rule Amendments: Costs,
Benefits, and Transfer Payments
In this proposed rule, CBP is
proposing regulatory changes that
include: Increasing fees for the customs
broker license application; eliminating
district permits so each customs broker
only needs one national permit to
conduct customs business; mandating
that each broker must provide
notification to CBP of any known breach
of records within 72 hours of discovery;
requiring that upon request by CBP to
examine records, brokers make all
records available to CBP within thirty
(30) calendar days at the location
specified by CBP; requiring that customs
brokers obtain a customs power of
attorney directly from the importer of
record or drawback claimant, not a
freight forwarder, to transact customs
business for that importer or drawback
claimant; and requiring that a broker
document and report to CBP when the
broker separates from or cancels a client
as a result of the broker’s determining
that the client is intentionally
attempting to use the services of the
broker to defraud or otherwise commit
any criminal act against the U.S.
Government. Finally, this rule would
allow CBP to make numerous nonsubstantive changes and conforming
edits in an effort to modernize the
regulations governing customs brokers
and to clarify existing language in the
regulations to better reflect what is
already occurring. We will now explore
the costs, benefits, and payment
transfers of each provision separately.
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3.1

Broker License Fee

Currently CBP charges $200 fees per
individual or business entity for the
broker license application. These fees
are used to offset the costs associated
with servicing the brokers. Based on a
fee study, entitled ‘‘Customs Broker
License Application Fee Study,’’ CBP

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has determined that these fees are no
longer sufficient to cover its costs.8
The study found that fees of $463 and
$815 are necessary to recover the costs
associated with reviewing the customs
broker license application for
individuals and business entities,
respectively. These fees, however, are
significantly higher than the current fees
and, if implemented, these fee rates
could become an economic disincentive
to those pursuing a career as a customs
broker. Therefore, in an effort to
minimize the financial burden to
prospective customs brokers while also
recovering a larger portion of the costs
associated with reviewing and vetting
the license application, CBP has
decided to limit the increase of the
license application fee to $300 for
individuals and $500 for business
entities; the remainder of the costs
would continue to be covered by
appropriated funds. Although these fee
increases represent an increased
expense for prospective customs
brokers, these fee increases do not
increase overall costs to society as these
costs are already being paid by CBP’s
appropriated funds.
When assessing costs of proposed
rules, agencies must take care to not
include transfer payments in their cost
analysis. As described in OMB Circular
A–4, transfer payments occur when
‘‘. . . monetary payments from one
group [are made] to another [group] that
do not affect total resources available to
society.’’ Examples of transfer payments
include payments for insurance and fees
paid to a government agency for services
that an agency already provides. CBP’s
processing of the customs broker license
application is an established service that
already requires a fee payment. As such,
the fee associated with each service is
considered a transfer payment.
Currently, the shortfall in funding not
8 The fee study is included in the docket of this
rulemaking (docket number USCBP–2020–0009).

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covered by fees is covered by funds
appropriated by CBP. The proposed
increased fees paid by brokers would
replace appropriated funds. CBP
recognizes that the proposed fee
changes may have a distributional
impact on prospective customs brokers.
In order to inform stakeholders of all
potential effects of the proposed rule,
CBP has analyzed the distributional
effects of the proposed rule in section
‘‘3.15 Distributional Impacts.’’
3.2

Permit Application Fee

Currently brokers are required to pay
a $100 permit application fee in
connection with each permit
application by either an individual or
corporation. The applicant has the
option of concurrently receiving its first
district permit with its customs broker’s
license and therefore forgoing the $100
permit application fee for its first
district permit. However, some brokers
do not request an initial district permit
at the time they get their license. When
this is the case and the broker later
applies for a district permit, or if brokers
make a request to obtain a permit for
additional districts, then they must
submit the following information to CBP
as set forth in 19 CFR 111.19(b):
(1) The applicant’s broker license
number and date of issuance;
(2) The address where the applicant’s
office will be located within the district
and the telephone number of that office;
(3) A copy of a document which
reserves the applicant’s business name
with the state or local government;
(4) The name of the individual broker
who will exercise responsible
supervision and control over the
customs business transacted in the
district;
(5) A list of all other districts for
which the applicant has a permit to
transact customs business;
(6) The place where the applicant’s
brokerage records will be retained and

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the name of the applicant’s designated
recordkeeping contact; and
(7) A list of all persons who the
applicant knows will be employed in
the district, together with the specific
employee information for each of those
prospective employees.
As a result of this rule, the options
above pertaining to district permits will
no longer exist and all brokers will have
to get a single national permit to
conduct customs business.
As shown in Exhibit 2 above, absent
this proposed rule there would be 5,235
total (4,654 individual + 581 corporate)
new broker licenses issued over the

period of analysis from 2017 through
2021. Of these 5,235 licenses, 581
would be issued to corporations which
would result in 871 corporate district
permits (as mentioned above, each
customs broker permit holder currently
has 1.5 district permits on average).
Additionally, as mentioned above, 100
percent of corporations exercise the
option of concurrently receiving their
first district permit with their customs
broker’s license, therefore saving the
$100 permit application fee for their
first district permit. This means that,
absent this rule, corporations would get
581 permits for free and would then

have to pay for the remaining 290
permits for a cost of $29,000 ($100
permit application fee * 290 corporate
permits). As a result of this rule, these
581 corporate brokers will each have to
get a single national permit and pay the
$100 permit application fee for each
national permit for a total cost of
$58,100 (581 national permits * $100
permit application fee). This results in
an additional cost to these corporate
brokers of $29,100 ($58,100¥$29,000)
over the period of the analysis from
2017 through 2021. Please see Exhibit 3
below for a breakdown of these costs.

EXHIBIT 3—COSTS FOR CORPORATE PERMIT HOLDERS OVER THE PERIOD OF ANALYSIS ($2018)
Number of
new corporate
broker
licenses
issued

Year

Number of
permits
issued

Costs for
corporate
brokers
without rule
($)

Costs for
corporate
brokers
with rule
($)

Rule’s cost
for corporate
brokers
($)

2017 .....................................................................................
2018 .....................................................................................
2019 .....................................................................................
2020 .....................................................................................
2021 .....................................................................................

97
106
115
126
137

146
159
173
188
205

4,900
5,300
5,800
6,300
6,800

9,700
10,600
11,500
12,600
13,700

4,900
5,300
5,800
6,300
6,800

Total ..............................................................................

581

871

29,000

58,100

29,100

Note: Values may not sum to total due to rounding.

As shown above in Exhibit 2, if this
rule were not in effect there would be
4,654 new individual broker licenses
resulting in 908 new individual permits
over the period of analysis. According to
CBP’s Broker Management Branch,
individual brokers do not get their first
district permit issued concurrently with
their customs broker’s licenses nearly as
often as corporations. Approximately
two (2) percent of individual customs
broker license holders, or 93 of the
estimated 4,654 new brokers, get their
first district permit issued concurrently

with their broker’s license, saving the
$100 permit application fee charged for
the first district permit. Using the
average of 1.5 district permits per
customs broker permit holder, we
estimate that these 93 individual
customs brokers would get 140 district
permits over the period of the analysis
if this rule did not go into effect. Since,
absent this rule, the brokers would get
93 out of the 140 permits for free,
brokers would have to pay for the
remaining 47 permits for a cost of
$4,700 ($100 permit application fee * 47

permits). Under this proposed rule,
these 93 individual brokers would each
need a single national permit for a total
of 93 permits resulting in a total cost of
$9,300 ($100 national permit
application fee * 93 national permits).
As a result of this rule, this two (2)
percent of individual brokers will bear
an additional total cost of $4,600
($9,300¥$4,700) over the period of
analysis. Please see Exhibit 4 below for
a breakdown of these costs.

EXHIBIT 4—COSTS FOR THE TWO (2) PERCENT OF INDIVIDUAL PERMIT HOLDERS OVER THE PERIOD OF ANALYSIS ($2018)
Number of
individual
licenses
issued for
the 2%
of permit
holders

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Year

Number of
permits
issued

Costs for
2% of
individual
brokers
without rule
($)

Costs for
2%
individual
brokers
with rule
($)

Rule’s costs
for 2% of
individual
brokers
($)

2017 .....................................................................................
2018 .....................................................................................
2019 .....................................................................................
2020 .....................................................................................
2021 .....................................................................................

15
17
18
20
23

23
25
28
30
33

800
800
1,000
1,000
1,100

1,500
1,700
1,800
2,000
2,200

800
800
900
1,000
1,100

Total ..............................................................................

93

140

4,700

9,300

4,600

Note: Values may not sum to total due to rounding.

The remaining 98 percent of
individual customs broker permit

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holders do not get their first district
permit concurrently with their broker’s

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license, if they get any permits at all. Of
the 13,624 active licensed brokers,

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approximately 15 percent hold at least
one permit. Because 2 percent of those
are corporate license holders and only 2
percent of individuals get a permit
concurrently with their license, about
11 percent of licensed brokers apply for

and receive a permit after their license
is issued. Under the current permit
system, using an average of 1.5 permits
per broker, 512 individual customs
broker permit holders pay $76,800 for
768 permits, because they pay the $100

fee for every permit. With the national
permit system, these brokers would pay
$51,200 for 512 national permits,
resulting in a savings of $25,600. Please
see Exhibit 5 below for an itemization
of these costs.

EXHIBIT 5—COSTS SAVINGS FOR THE 98 PERCENT OF INDIVIDUAL PERMIT HOLDERS OVER THE PERIOD OF ANALYSIS
($2018)
Number of
individual
licenses
issued for
the 11%
of permit
holders

Year

Number of
permits
issued

Costs for
11% of
individual
brokers
without rule
($)

Costs for
11% of
individual
brokers
with rule
($)

Rule’s cost
savings for
11% of
individual
brokers
($)

2017 .....................................................................................
2018 .....................................................................................
2019 .....................................................................................
2020 .....................................................................................
2021 .....................................................................................

84
92
101
112
123

126
138
152
167
184

12,600
13,800
15,200
16,800
18,400

8,400 10900
9,200
10,100
11,200
12,300

4,200
4,600
5,100
5,600
6,100

Total ..............................................................................

512

768

76,800

51,200

25,600

Note: Values may not sum to total due to rounding.

Any brokers who apply for more than
one permit will experience a time
savings as a result of this rule because
they will only need to apply for a single
permit. Currently brokers spend
approximately three hours to collect and
submit the appropriate documentation
to CBP.9 The rule’s elimination of these
applications will result in time savings
for the brokers as well as CBP. The

estimated number of permits requested
separately from individual licenses for
the entire period of the analysis is taken
from Exhibit 4 and Exhibit 5. Exhibit 4
implies there are 47 permits for which
2% of individual customs brokers
currently pay $100 ($4,700 permit costs
without rule/$100 per permit). Exhibit 5
explicitly shows that 11% of individual
customs brokers currently pay $100 for

768 permits. Summing these two
figures, we find that all individual
customs brokers will pay $100 for 814
permits. Exhibit 6 shows the removal of
the application for these permits will
result in a monetized time savings
worth $75,200. This cost savings is
based on CBP’s estimated fully-loaded
hourly time value for customs brokers of
$30.79.10

EXHIBIT 6—TIME SAVINGS MONETIZED FOR BROKER DISTRICT PERMIT APPLICATIONS SEPARATE FROM LICENSE
APPLICATIONS OVER THE PERIOD OF ANALYSIS ($2018)
Number of
permits
issued
separate
from license

Year

Hourly
time-burden
for permit
application

Rule’s cost
savings for
individual
brokers

2017 .............................................................................................................................................
2018 .............................................................................................................................................
2019 .............................................................................................................................................
2020 .............................................................................................................................................
2021 .............................................................................................................................................

133
147
161
178
195

3
3
3
3
3

$12,300
13,600
14,900
16,400
18,000

Total ......................................................................................................................................

814

3

75,200

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Note: Values may not sum to total due to rounding.

Relatedly, CBP would see cost savings
due to the elimination of the district

permit application review process. CBP
estimates that it takes two hours of CBP

processing, including time to review
and approve an application and create

9 Source: Email correspondence with the CBP
Broker Management Branch on May 16, 2019.
10 CBP bases the $30.79 hourly time value for
customs brokers on the Bureau of Labor Statistics’
(BLS) 2018 median hourly wage rate for Cargo and
Freight Agents ($20.77), which CBP assumes best
represents the wage for brokers, by the ratio of BLS’
average 2018 total compensation to wages and
salaries for Office and Administrative Support
occupations (1.4801), the assumed occupational
group for brokers, to account for non-salary
employee benefits, and rounded. Source of median
wage rate: U.S. Bureau of Labor Statistics.
Occupational Employment Statistics, ‘‘May 2018

National Occupational Employment and Wage
Estimates, United States—Median Hourly Wage by
Occupation Code: 43–5011.’’ Updated April 2,
2019. Available at https://www.bls.gov/oes/2018/
may/oes_nat.htm. Accessed November 20, 2019.
The total compensation to wages and salaries ratio
is equal to the calculated average of the 2018
quarterly estimates (shown under Mar., June, Sep.,
Dec.) of the total compensation cost per hour
worked for Office and Administrative Support
occupations divided by the calculated average of
the 2018 quarterly estimates (shown under Mar.,
June, Sep., Dec.) of wages and salaries cost per hour
worked for the same occupation category. Source of

total compensation to wages and salaries ratio data:
U.S. Bureau of Labor Statistics. Employer Costs for
Employee Compensation. Employer Costs for
Employee Compensation Historical Listing March
2004–December 2018, ‘‘Table 3. Civilian workers,
by occupational group: employer costs per hours
worked for employee compensation and costs as a
percentage of total compensation, 2004–2018 by
Respondent Type: Office and administrative
support occupations.’’ Available at https://
www.bls.gov/web/ecec/ececqrtn.pdf. Accessed June
4, 2019.

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and deliver the permit to the
applicant.11 Exhibit 7 shows CBP’s total

estimated cost savings of $143,200 over
the period of analysis. This is based on

a CBP fully loaded wage rate of $87.94 12
for CBP staff reviewing applications.

EXHIBIT 7—TIME SAVINGS MONETIZED FOR CBPOS REVIEWING DISTRICT PERMIT APPLICATIONS OVER THE PERIOD OF
ANALYSIS ($2018)
Number of
permits
issued
separate
from license

Year

Hourly
time-burden
for permit
application
review

Rule’s cost
savings
for CBP

2017 .............................................................................................................................................
2018 .............................................................................................................................................
2019 .............................................................................................................................................
2020 .............................................................................................................................................
2021 .............................................................................................................................................

133
147
161
178
195

2
2
2
2
2

$23,500
25,800
28,400
31,200
34,400

Total ......................................................................................................................................

814

2

143,200

the request and makes a
recommendation to headquarters.
Headquarters reviews and issues the
decision.13 According to the CBP Broker
Management Branch this process takes
two hours for brokers, including
application processing and mailing
paper documents to CBP. It takes an
hour and a half for CBP to do the waiver
analysis, prepare the recommendation

Lastly, the district permit waiver
described in current § 111.19(d)(2)
would be eliminated with the rule.
Currently requests for a district permit
waiver must be submitted to the port
director and include a description of
responsible supervision and control
procedures and information on the
volume and type of customs business
conducted. The port director reviews

memorandum, and for headquarters to
make the final decision.14 As shown in
Exhibits 8 and 9 there is a total cost
savings of $5,031 ($1,601 + $3,430), as
this entire process is eliminated under
the national permit framework. Waiver
estimates for calendar years 2019 to
2021 are based on compound annual
growth rate from calendar years 2017
and 2018.

EXHIBIT 8—TIME SAVINGS MONETIZED FOR APPLICANTS REQUESTING DISTRICT PERMIT WAIVERS OVER THE PERIOD OF
ANALYSIS ($2018)
Number of
broker
district
permit
waivers

Year

Rule’s
cost-savings
for brokers
requesting
waivers

Hourly
time-burden
for waiver
application

2017 .............................................................................................................................................
2018 .............................................................................................................................................
2019 .............................................................................................................................................
2020 .............................................................................................................................................
2021 .............................................................................................................................................

17
6
2
1
0

2
2
2
2
2

$1,047
369
123
62
0

Total ......................................................................................................................................

26

2

1,601

EXHIBIT 9—TIME SAVINGS MONETIZED FOR CBPOS REVIEWING DISTRICT PERMIT WAIVER APPLICATIONS OVER THE
PERIOD OF ANALYSIS ($2018)
Number of
broker
district
permit
waivers

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Year

Hourly
time-burden
for waiver
application
review

Rule’s
cost-savings
for CBP

2017 .............................................................................................................................................
2018 .............................................................................................................................................
2019 .............................................................................................................................................
2020 .............................................................................................................................................
2021 .............................................................................................................................................

17
6
2
1
0

1.5
1.5
1.5
1.5
1.5

$2,243
791
264
132
0

Total ......................................................................................................................................

26

1.5

3,430

11 Source: Email correspondence with the CBP
Broker Management Branch on May 16, 2019.
12 CBP bases the $87.94 hourly time value for CBP
staff on a median annual loaded wage rate,
including salary and benefits, of $139,034. Dividing

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by 2080 work hours per year gives a median hourly
wage of $66.84. CBP then adds premium pay and
non-salary costs for a median, fully-loaded hourly
wage rate of $87.94. Source of salary and benefit
information: Email correspondence with the U.S.

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Customs and Border Protection, Office of Finance
on June 12, 2019.
13 See 19 CFR 111.19(d)(2).
14 Source: Email correspondence with the CBP
Broker Management Branch on May 16, 2019.

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Exhibit 10 provides a summary of the
costs and cost-savings pertaining to the
removal of the district permit

application and $100 fee over the period
of analysis. Note that a negative number

indicates a savings and a positive
number indicates a cost.

EXHIBIT 10—COSTS AND COST-SAVINGS WITH REMOVAL OF DISTRICT PERMITS FOR CY2017–2021 ($2018)
Costs/
savings for
individuals
Savings
for 11%

Costs for
the 2%

Time
savings

Costs for
corporation

Savings
for
CBP

Time
savings

Review
of permits

Review
waivers

2017 .............................
2018 .............................
2019 .............................
2020 .............................
2021 .............................

¥$4,200
¥$4,600
¥$5,100
¥$5,600
¥$6,100

$800
$800
$900
$1,000
$1,100

¥$12,300
¥$13,600
¥$14,900
¥$16,400
¥$18,000

$4,900
$5,300
$5,800
$6,300
$6,800

¥$1,000
¥$400
¥$100
¥100
$0

¥$23,500
¥$25,800
¥$28,400
¥$31,200
¥$34,400

¥$2,200
¥$800
¥$300
¥100
$0

Total ......................

¥$25,600

$4,600

¥$75,200

$29,000

¥$1600

¥$143,200

¥$3,400

¥$96,200

Net Cost .........

3.3

Record of Transactions

Each broker must keep current, in a
correct and itemized manner, records of
accounts reflecting all his or her
financial transactions as a broker. The
broker must keep and maintain on file
copies of all correspondence and other
records relating to customs business.
With this proposed rule, each broker
must provide notification to the
designated Center of any known breach
of electronic or physical records relating
to customs business. Notification to CBP
must be provided within 72 hours of the
discovery of the breach with a list of all
known compromised importer
identification numbers. Brokers already
compile this information through their
normal course of business and they can
report the information to CBP in any
format they choose. CBP assumes data
breaches are rare, but includes this
requirement as a preventive measure.
CBP assumes this provision has
virtually no cost to the brokers due to
the infrequency of data breaches. CBP
will use this information in its targeting
of imports for inspection, which will
help make imports safer.
3.4

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Costs/
savings for
corporations

Records Availability

Currently, during the period of
retention (5 years after the date of
entry), the broker must maintain its
records in such a manner that they can
be readily examined by CBP when
necessary. Records required to be
maintained under this provision must
be made available upon reasonable
notice for inspection, copying,
reproduction or other official use by
representatives of the Department of
Homeland Security. Additionally,
customs brokers currently have the
option to store records offsite. Under the
proposed rule, upon request by CBP to

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examine records, the designated
recordkeeping contact must make all
records available to CBP within thirty
(30) calendar days, or any longer
timeframe as specified by CBP, at the
location specified by CBP. We are
making this change in the regulations to
make sure brokers continue to give CBP
the requested information and to
specifically state for clarity that brokers
need to keep records in the United
States. As we are only explicitly stating
an existing requirement for the sake of
clarity, this will result in no additional
burden for customs brokers.
3.5 Termination of Client Relationship
In this proposed rule, we will now
require that a broker document and
report to CBP when it separates from a
client relationship as a result of the
broker’s determining that the client is
intentionally attempting to use the
broker’s services to defraud or otherwise
commit any criminal act against the U.S.
Government. This is an entirely new
provision, so we do not have data on
how often clients may use a broker’s
services to defraud or otherwise commit
criminal acts against the U.S.
Government. However, we do not
expect this to happen often based on
stakeholder feedback. CBP’s Broker
Management Branch estimates this to
occur approximately 5 times per year
and each resulting report will take
brokers approximately four (4) hours to
draft. CBP requests comment on these
estimates.
To estimate the time cost spent
writing and submitting this report to
CBP, we must first determine a value of
time for the individuals who would be
preparing and submitting this report.
We expect that, in most cases, this
information will be submitted by
customs brokers employing attorneys to

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$27,500

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draft the report. According to the U.S.
Bureau of Labor Statistics, the 2018
median hourly earnings of an attorney is
$145.33.15 These five (5) reports
represent an additional burden to the
broker and will result in a total annual
cost of $2,907 (4 hours per report * 5
reports * $145.33 annual wage rate for
an attorney) or a total cost of $14,533
over the period of analysis from 2017–
2021.
3.6 Customs Power of Attorney
A customs broker is required to have
a customs power of attorney (POA) prior
to transacting any customs business on
behalf of the importer of record. (See 19
CFR 141.46). Currently, an agent of the
importer of record (IOR), which could
be a freight forwarder that is properly
designated by the IOR, may issue a POA
on behalf of the IOR to a customs
broker. In such instances, the customs
15 CBP bases the $145.33 hourly time value on the
median hourly wage rate for lawyers, SOC 23–1011,
($58.13) multiplied by 2.5 to account for benefits
and other costs of employment. Source: U.S. Bureau
of Labor Statistics. Occupational Employment
Statistics, ‘‘May 2018 National Occupational
Employment and Wage Estimates, United States—
Median Hourly Wage by Occupation Code.’’
Updated April 2, 2019. Available at http://
www.bls.gov/oes/2018/may/oes_nat.htm. Accessed
June 4, 2019.
The DHS ICE ‘‘Safe-Harbor Procedures for
Employers Who Receive a No-Match Letter’’ used
a multiplier of 2.5 to convert in-house attorney
wages to the cost of outsourced attorney based on
information received in public comment to that
rule. We believe the explanation and methodology
used in the Final Small Entity Impact Analysis
remains sound for using 2.5 as a multiplier for
outsourced labor wages in this rule, see page G–4
[Aug. 25, 2008] [http://www.regulations.gov/
#!documentDetail;D=ICEB-2006-0004-0922].
Additionally, this methodology was also utilized in
the analysis for the DHS USCIS final rule
establishing a registration fee requirement for
petitioners seeking to file H–1B petitions on behalf
of cap subject aliens. See 84 FR 60307 (November
8, 2019).

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broker may never have any contact with
the IOR, only its agent (the forwarder).
With this proposed rule, the broker
must get a customs POA directly from
the importer of record or drawback
claimant and not via the freight
forwarder or any other third party agent.
This gives the broker direct access to the
IOR when entering into the POA, which
increases transparency in the
verification process. According to CBP’s
Broker Management Branch, it takes
approximately 1.75 hours for the broker
to get a customs POA from the freight
forwarder. This time estimate will not
change once the intermediary is
removed and the broker must get the
customs POA directly from the importer
of record or drawback claimant, instead
of allowing a freight forwarder or other
third-party to do so on their behalf.
Since brokers are currently required to
get a customs POA, and importers
already provide a POA, this provision
would not result in any additional
burden to brokers. The new provision
only requires direct contact between the
broker and the IOR.

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3.7 Professionalism
We are making a number of changes
in an effort to increase professionalism
and clarify what brokers should already
be doing. We recognized this need as we
routinely field questions about these
topics and we wanted to clarify best
practices for the trade. The next several
sections describe the current process,
and what is changing as a result of this
rule, for new requirements related to
Customs Business, Records
Confidentiality, Responsible
Supervision and Control, and Advice to
Client.
3.8 Customs Business
Currently, customs business must be
conducted within the customs territory
of the United States as it is defined in
§ 101.1 of the CBP regulations.
Furthermore, each broker must
designate a licensed broker or
knowledgeable employee to be available
to CBP to respond to issues related to
the transacting of customs business and
each broker must maintain accurate and
current point of contact information in
a CBP-authorized electronic data
interchange (EDI) system. Under this
proposed rule, these requirements are
not changing; we are just now putting
the language in the regulations requiring
a specific point of contact be maintained
in an EDI. CBP gets questions on this
provision from the public, so adding
this additional language to the
regulation would clarify the provision
for the public. There are no costs to this
provision because it does not change the

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requirement. The public would benefit
as the public now has more clarity
regarding the requirement without
needing to contact CBP.
3.9 Records Confidentiality
Currently, records pertaining to the
clients of the broker are to be considered
confidential and the broker must not
disclose their contents or any
information connected with the records
to any other persons except the relevant
surety, other than specifically described
Government representatives with regard
to a particular entry or due to a
subpoena. This is not changing under
the proposed rule. However, this
description is being clarified to now
state that these records may not be
disclosed to any persons other than the
ones mentioned above and to the
representatives of the Department of
Homeland Security except by court
order, subpoena (as mentioned above),
or when authorized in writing by the
client. This has already been the
practice, but has been the subject of
confusion so we are providing needed
clarification. Finally, the revised
language clarifies that the
confidentiality provision does not apply
to information that is in the public
domain, which has been a point of
confusion for some brokers.
3.10 Responsible Supervision and
Control
Brokers often have employees
working for them who are not licensed
brokers. These employees help with
information collection and submission
of entry documentation to CBP. Each
broker is responsible for exercising
responsible supervision and control
over the transaction of the customs
business done under its broker license.
This requirement is in existence
currently and is not changing as a result
of this rule. However, this rule proposes
to move the list of factors CBP considers
when determining whether a customs
broker is exercising responsible
supervision and control from the
definition of ‘‘responsible supervision
and control’’ in §§ 111.1 through 111.28.
(19 CFR 111.1, 111.28). This list is of a
substantive nature and is more
appropriately located in the section on
responsible supervision and control as
opposed to the definitions section. CBP
has always maintained that the current
factors are not exhaustive and in the
proposed rule, CBP is simply clarifying
existing requirements that brokers, for
the most part, are already complying
with in practice.16 This is not a change
16 Brokers looking for more information beyond
what is stated in CBP regulations can consult the

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of practice as these factors for
responsible supervision already exist
and are just being moved and formally
stated in the regulations to clarify what
already should be occurring.
Additionally, CBP is clarifying some
of the requirements on the reporting of
employee information by brokers, for
consistency. In this rule, CBP is
proposing to remove the requirement for
the broker to report each employee’s last
home address, email address, the name
and address of each former employer,
and if the employee had been employed
by the broker for less than three years,
the dates of employment for the threeyear period preceding current
employment with the broker. The rule
retains the requirement that brokers
report other information, including
employee names, social security
numbers, dates and places of birth,
dates of hire, and current home
addresses. An updated list must be
submitted to the director of the
designated Center and updated in ACE
if any of the information required
changes, including notation of new or
terminated employees. This update
must be submitted within thirty (30)
calendar days of the change. However,
brokers already have an up-to-date list
of their employees’ contact information.
This new requirement amounts to a
routine submission each month in ACE
with data that the brokers already
routinely keep. They are likely to do
this at the same time as making their
other filings or routine reports so
submitting one more existing document
is not an additional measureable burden
on customs brokers.
3.11

Advice to Client

Currently, if a broker knows that a
client has not complied with the law or
has made an error in, or omission from,
any document, affidavit, or other record
which the law requires the client to
execute, the broker must advise the
client promptly of that noncompliance,
error, or omission. In the proposed rule
we are adding that the broker must also
advise the client on the proper
corrective actions required and retain a
record of the broker’s communication
with the client in accordance with
§ 111.23. (19 CFR 111.23). CBP proposes
to add the requirement that the broker
also explain the proper corrective action
CBP website at https://www.cbp.gov/trade/
programs-administration/customs-brokers. The
website is updated more frequently than the
regulations themselves. CBP provides guides on
how to become a broker, broker exam information,
validating the power of attorney, broker
compliance, employing convicted felons, fees,
national permits, and triennial reports, as well as
webinars and informed compliance publications.

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to better advise the client and to clarify
the level of professionalism that is
expected in the broker/importer
relationship. Additionally, we are
adding that the record of this
communication could be reviewed by
CBP on a routine visit to the broker.
Brokers will not have to report any
errors or omissions but in the case that
an error or omission is discovered, this
would help a broker show that it
advised the client on how to correct the
situation. Most brokers are already in
compliance with this requirement, so
this provision will not add a significant
burden to customs brokers.
3.12

who receive their first district permit
concurrently with their broker’s license
will need to pay for their permit and the
costs resulting from the new
requirement that a broker document and
report to CBP when it separates from a
client relationship as a result of
attempted fraud or criminal acts. Exhibit
11 shows the total annual cost of the
rule. Over the 5-year period of analysis,
this rule will cost brokers about $48,200
undiscounted.

Year

Total costs

2020 ......................................
2021 ......................................

10,200
10,900

Total ......................................

48,200

Note: Values may not sum to total due to
rounding.

EXHIBIT 11—TOTAL ANNUAL
Exhibit 12 shows the present value
UNDISCOUNTED COSTS FOR BRO- and annualized costs of the rule over the
KERS ($2018), 2017–2021
period of analysis (2017–2021) at a three

Total Costs

(3) and seven (7) percent discount rate.
Total costs range from $39,200 to
$8,500 $44,000, depending on the discount rate
9,000 used. Annualized costs are about
9,600 $9,600.

Year

The total monetized costs for customs
brokers include a $100 fee that two (2)
percent of individual customs brokers

EXHIBIT 11—TOTAL ANNUAL
UNDISCOUNTED COSTS FOR BROKERS ($2018), 2017–2021—Continued

Total costs

2017 ......................................
2018 ......................................
2019 ......................................

EXHIBIT 12—TOTAL PRESENT VALUE AND ANNUALIZED COSTS, FROM 2017–2021 ($2018)
Total present value costs

Annualized costs

3%

7%

3%

7%

$44,000 ........................................................................................................................................

$39,200

$9,600

$9,600

3.13

Total Benefits

The total annual monetized cost
savings for customs brokers are the
result of monetary savings from
switching from a district permitting
system to a national permitting system.
Namely, there is a time savings and fee
savings of $100 per permit application
for individual customs brokers who do
not concurrently receive their first
district permit with their broker license.
There is also a time savings to CBP due
to the removal of the district permit
waiver application reviews. As shown
in Exhibit 13, total undiscounted
savings over the period of analysis is
$249,100. In addition to these quantified
benefits, there are unquantified benefits
resulting from this rules’ updates. These
benefits include increased
professionalism of the broker industry,

greater clarity for brokers in
understanding the rules and regulations
by which they must abide, greater data
security, and better reporting of
potential fraud to CBP.

EXHIBIT 13—TOTAL ANNUAL
UNDISCOUNTED
COSTS-SAVINGS
FOR BROKERS AND CBP ($2018),
2017–2021
Total
costs-savings

Year
2017 ......................................
2018 ......................................
2019 ......................................
2020 ......................................
2021 ......................................

$43,300
45,100
48,800
53,400
58,500

EXHIBIT 13—TOTAL ANNUAL
UNDISCOUNTED
COSTS-SAVINGS
FOR BROKERS AND CBP ($2018),
2017–2021—Continued
Total
costs-savings

Year
Total ...............................

249,100

Note: Values may not sum to total due to
rounding.

Exhibit 14 shows the present value
and annualized costs-savings of the rule
over the period of analysis (2017–2021)
at a three (3) and seven (7) percent
discount rate. Total costs-savings range
from $202,100 to $227,100, depending
on the discount rate used. Annualized
costs-savings range from $49,301 to
$49,592, depending on the discount rate
used.

EXHIBIT 14—TOTAL PRESENT VALUE AND ANNUALIZED COSTS-SAVINGS, FROM 2017–2021 ($2018)

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Total present value costs-savings

Annualized
costs-savings

3%

7%

3%

7%

$227,100 ......................................................................................................................................

$202,100

$49,592

$49,301

3.14

estimate that 859 brokers will receive
their broker licenses (762 individual
licenses plus 97 corporate licenses). The
adoption of this rule will result in an
average annual net benefit per broker in

Net Benefits

Exhibit 15 summarizes the monetized
costs and benefits of this rule to
individual and business entity customs
brokers. As shown, the total monetized

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present value net benefits of this rule
over a 5 year period of analysis from
2017–2021 ranges from $163,000 to
$183,100 and the annualized net benefit
is approximately $40,000. In 2017, we

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2017 of $47 ($40,000 annualized net
benefits/859 total new brokers for 2017).

EXHIBIT 15—PRESENT VALUE AND ANNUALIZED NET BENEFIT OF RULE ($2018), 2017–2021
3% discount rate
Present value
Total Cost ........................................................................................................
Total Benefit .....................................................................................................
Total Net Benefit ..............................................................................................

3.15 Distributional Impact
Under the proposed rule, the customs
broker license application will change
from $200 for both individuals and
business entities to $300 for individuals
and $500 for business entities.
Consequently, CBP’s proposed fee
would increase by $100 for individuals
and $300 for business entities. As
discussed in section 2, CBP estimates
that over the next five years, 4,654
individuals and 581 business entities
will be issued a new customs broker
license. Using these estimates and the
proposed fee increases, CBP estimates
that the proposal will result in an
increased transfer payment from brokers
to the government of approximately
$639,700 over the next five years (4,654
individual applications * $100 proposed
fee increase = $465,400; 581 business
entity applications * $300 proposed fee
increase = $174,300; $465,400 +
$174,300 = $639,700). Although the
proposed fee changes will increase costs
for individuals and business entities,
CBP has determined that these proposed
increases are necessary in order to
recover some of the costs of provide the
services necessary to facilitate the
customs broker license application
process.
4. 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

7% discount rate

Annualized

$44,000
227,100
183,100

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 notfor-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).
In an effort to modernize the
regulations governing customs brokers,
CBP is proposing regulatory changes
that include: Eliminating district
permits so each customs broker only
needs one national permit, which
reduces the fees owed; mandating that
each broker must provide notification to
CBP of any known breach of its records
within 72 hours of discovery; requiring
brokers to make all records available to
CBP, upon request within thirty (30)
calendar days at the location specified
by CBP; mandating that customs brokers
now obtain a customs power of attorney
directly from the importer of record or
drawback claimant, not a freight
forwarder, to transact customs business
for that importer or drawback claimant;
and requiring that a broker must
document and report to CBP when it
separates from or terminates
representation of a client as a result of
the broker’s determining the client is
intentionally attempting to use the
services of a broker to defraud or
otherwise commit any criminal act

Present value

$9,600
49,600
40,000

$39,200
202,100
163,000

Annualized
$9,600
49,300
39,700

against the U.S. Government.
Furthermore, CBP is also proposing to
make various non-substantive changes
and conforming edits to clarify the
existing language in the regulations to
better reflect what is already occurring.
The proposed rule would apply to all
customs brokers, regardless of size.
Accordingly, the proposed rule would
affect a substantial number of small
entities. However, as stated above in the
Executive Orders 13563, 12866, and
13771 section, the proposed rule would
result in an average annualized savings
per customs broker of $47. Additionally,
as discussed above, the customs broker
license application fee increase for the
5,235 new customs brokers over the
period of analysis would result in a
distributional impact of $639,700, with
4,654 individual applicants paying an
additional $100 and 581 corporate
applicants paying an additional $300
over a 5-year period. Including
distributional impacts, the rule costs
brokers either $61 or $261 per year, or
less than 1 percent of annual revenue
for brokers of any size. Please see
Exhibit 16 for a breakdown of
brokerages by size. Because the
distributional impact and saving are
relatively small on a per broker basis,
this rule will not have a significant
economic impact on customs brokers.
Accordingly, CBP certifies that this rule
does not have a significant economic
impact on a substantial number of small
entities.

EXHIBIT 16—ANNUAL REVENUE BY FIRM SIZE 17

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Annual revenue
($)

Number
of firms

<100,000 ..................................................................................................................
100,000–499,999 .....................................................................................................
500,000–999,999 .....................................................................................................
1,000,000–2,499,999 ...............................................................................................
2,500,000–4,999,999 ...............................................................................................
5,000,000–7,499,999 ...............................................................................................
17 Source: U.S. Census Bureau, ‘‘2012 SUSB
Annual Data Tables by Establishment Industry,’’
Data by Enterprise Receipt Size, NAICS 4885

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2,195
4,935
2,330
2,429
1,208
540

Freight Transportation Arrangement, Last Revised
July 30, 2019. https://www.census.gov/data/tables/

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Small

Yes ....................................
Yes ....................................
Yes ....................................
Yes ....................................
Yes ....................................
Yes ....................................

Estimated
number of
permitted
brokers
323
727
343
358
178
80

2012/econ/susb/2012-susb-annual.html. Accessed
January 14, 2020.

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34859

EXHIBIT 16—ANNUAL REVENUE BY FIRM SIZE 17—Continued
Annual revenue
($)

Small

Estimated
number of
permitted
brokers

7,500,000–9,999,999 ...............................................................................................
10,000,000–14,999,999 ...........................................................................................
>15,000,000 .............................................................................................................

284
282
815

Yes ....................................
Yes ....................................
No ......................................

42
42
0

Total ..................................................................................................................

15,018

...........................................

2,093

5. 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) and by OMB control number
1651–0076 (Recordkeeping
Requirements). This rule does not
change the burden under these
information collections.
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
Homeland Security the 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 to
amend such regulations may be signed
by the Secretary of Homeland Security
(or his or her delegate).
List of Subjects
19 CFR Part 24
Accounting, Claims, Customs duties
and inspection, Harbors, Reporting and
recordkeeping requirements, Taxes.
19 CFR Part 111
Administrative practice and
procedure, Brokers, Customs duties and
inspection, Penalties, Reporting and
recordkeeping requirements.
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Number
of firms

Proposed Amendments to the CBP
Regulations
For the reasons set forth in the
preamble, parts 24 and 111 of title 19 of
the Code of Federal Regulations (19 CFR
parts 24 and 111) are proposed to be
amended as set forth below.

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PART 24—CUSTOMS FINANCIAL AND
ACCOUNTING PROCEDURE

The additions and revisions read as
follows:

■ 1. The general authority citation for

§ 111.1

part 24 continues to read as follows:

*

Authority: 5 U.S.C. 301; 19 U.S.C. 58a–
58c, 66, 1202 (General Note 3(i), Harmonized
Tariff Schedule of the United States), 1505,
1520, 1624; 26 U.S.C. 4461, 4462; 31 U.S.C.
3717, 9701; Pub. L. 107–296, 116 Stat. 2135
(6 U.S.C. 1 et seq.).

*

*

§ 24.1

*

*

*

[Amended]

■ 2. In § 24.1, paragraph (a)(3)(i) is

amended by removing the phrases ‘‘who
does not have a permit for the district
(see the definition of ‘‘district’’ at
§ 111.1 of this chapter) where the entry
is filed,’’ and ‘‘which is unconditioned
geographically’’ from the third sentence.
PART 111—CUSTOMS BROKERS
■ 3. The authority citation for part 111

is revised to read as follows:
Authority: 19 U.S.C. 66, 1202 (General
Note 3(i), Harmonized Tariff Schedule of the
United States), 1624; 1641.
Section 111.2 also issued under 19 U.S.C.
1484, 1498;
Section 111.96 also issued under 19 U.S.C.
58c, 31 U.S.C. 9701.
■ 4. In § 111.1:
■ a. Add the definition ‘‘Appropriate

Executive Director, Office of Trade’’ in
alphabetical order;
■ b. Remove the definition ‘‘Assistant
Commissioner’’;
■ c. Add the definitions ‘‘Broker’s office
of record’’ and ‘‘Designated Center’’ in
alphabetical order;
■ d. Remove the definition ‘‘District’’;
■ e. Add athe definition ‘‘Executive
Assistant Commissioner’’;
■ f. Amend the definition of ‘‘Permit’’
by removing the word ‘‘any’’ and adding
in its place the word ‘‘a’’;
■ g. Remove the definition ‘‘Region’’;
■ h. Revise the definition ‘‘Responsible
supervision and control’’; and
■ i. Designate the definition
‘‘Department of Homeland Security or
any representative of the Department of
Homeland Security’’ in alphabetical
order.

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Definitions.

*
*
*
*
Appropriate Executive Director, Office
of Trade. ‘‘Appropriate Executive
Director, Office of Trade’’ means the
Executive Director responsible for
broker management.
*
*
*
*
*
Broker’s office of record. ‘‘Broker’s
office of record’’ means the office
designated by a customs broker as the
broker’s primary location that oversees
the administration of the provisions of
this part regarding all activities
conducted under a national permit.
*
*
*
*
*
Designated Center. ‘‘Designated
Center’’ means the Center of Excellence
and Expertise (Center) through which an
individual, partnership, association, or
corporation submits an application for a
broker’s license under § 111.12(a), or to
which an already-licensed broker is
otherwise assigned.
*
*
*
*
*
Executive Assistant Commissioner.
‘‘Executive Assistant Commissioner’’
means the Executive Assistant
Commissioner of the Office of Trade at
the Headquarters of U.S. Customs and
Border Protection.
*
*
*
*
*
Responsible supervision and control.
‘‘Responsible supervision and control’’
means that degree of supervision and
control necessary to ensure the proper
transaction of the customs business of a
broker, including actions necessary to
ensure that an employee of a broker
provides substantially the same quality
of service in handling customs
transactions that the broker is required
to provide. See § 111.28 for a list of
factors which CBP may consider when
evaluating responsible supervision and
control.
*
*
*
*
*
■ 5. In § 111.2:
■ a. Amend the section heading by
removing the word ‘‘district’’;
■ b. Amend paragraph (a)(2)(ii)(A)(1) by
removing ‘‘the port director’’ and

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‘‘Customs’’ and adding in their place the
term ‘‘CBP’’;
■ c. Amend paragraph (a)(2)(ii)(A)(2) by:
■ 1. Removing the word ‘‘port’’ and
adding the words ‘‘of the designated
Center’’ after the word ‘‘director’’; and
■ 2. Removing the last sentence.
■ d. Amend paragraph (a)(2)(ii)(B) by
removing the word ‘‘port’’ wherever it
appears and adding ‘‘of the designated
Center’’ after the word ‘‘director’’
wherever it appears; and
■ e. Revise paragraph (b).
The revision reads as follows:
§ 111.2

License and permit required.

*

*
*
*
*
(b) National permit. A national permit
issued to a broker under § 111.19 will
constitute sufficient permit authority for
the broker to conduct customs business
within the customs territory of the
United States as defined in § 101.1 of
this chapter.
■ 6. Add § 111.3 to read as follows:

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§ 111.3

Customs business.

(a) Location. Customs business must
be conducted within the customs
territory of the United States as defined
in § 101.1 of this chapter.
(b) Point of contact. A licensed
customs broker, or partnership,
association, or corporation, conducting
customs business under a national
permit must designate a knowledgeable
point of contact to be available to CBP
during and outside of normal operating
hours to respond to customs business
issues. The licensed customs broker, or
partnership, association, or corporation,
must maintain accurate and current
point of contact information in a CBPauthorized electronic data interchange
(EDI) system. If a CBP-authorized EDI
system is not available, then the
information must be provided in writing
to the director of the designated Center.
■ 7. In § 111.12:
■ a. Paragraph (a) is revised;
■ b. Paragraph (b) is removed; and
■ c. Redesignate paragraph (c) as
paragraph (b);
■ d. In newly redesignated paragraph
(b):
■ 1. Remove the word ‘‘port’’;
■ 2. Add the words ‘‘of the designated
Center’’ after the word ‘‘director’’ and;
■ 3. Remove the words ‘‘$200
application fee’’ and add in their place
the words ‘‘application fee set forth in
§ 111.96(a)’’.
The revisions read as follows:
§ 111.12

Application for license.

(a) Submission of application and fee.
An application for a broker’s license
must be timely submitted to the director
of the Center identified by CBP after the

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applicant attains a passing grade on the
examination. The application must be
executed on CBP Form 3124. The
application must be accompanied by the
application fee prescribed in § 111.96(a)
and one copy of the appropriate
attachment required by the application
form (Articles of Agreement or an
affidavit signed by all partners, Articles
of Agreement of the association, or the
Articles of Incorporation). If the
applicant proposes to operate under a
trade or fictitious name in one or more
States, evidence of the applicant’s
authority to use the name in each of
those States must accompany the
application. An application for an
individual license must be submitted
within the 3-year period after the
applicant took and passed the
examination referred to in § 111.11(a)(4)
and § 111.13. The Center director may
require an individual applicant to
provide a copy of the notification that
the applicant passed the examination
(see § 111.13(e)) and will require the
applicant to submit fingerprints at the
time of the interview. The Center
director may reject an application as
improperly filed if the application is
incomplete or, if on its face, the
application demonstrates that one or
more of the basic requirements set forth
in § 111.11 has not been met at the time
of filing; in either case the application
and fee will be returned to the filer
without further action.
*
*
*
*
*
§ 111.13

[Amended]

■ 8. In § 111.13:
■ a. Amend paragraph (b) by removing

‘‘$390’’;
■ b. Amend paragraph (c) by
■ 1. Removing the words ‘‘an office in

another district (see § 111.19(d)) and the
permit for that additional district would
be revoked by operation of law under
the provisions of 19 U.S.C. 1641(c)(3)
and § 111.45(b)’’ and adding in their
place the words ‘‘the transaction of
customs business’’; and
■ 2. Removing ‘‘$390’’;
■ c. Amend paragraph (d) by removing
‘‘$390’’;
■ d. Amend paragraph (e) by adding the
words ‘‘or electronic’’ after the word
‘‘written’’; and
■ e. Amend paragraph (f) by:
■ 1. Adding the words ‘‘or electronic’’
between the words ‘‘written’’ and
‘‘appeal’’ and between the words
‘‘written’’ and ‘‘notice’’ in the first
sentence;
■ 2. Adding the words ‘‘or electronic’’
between the words ‘‘written’’ and
‘‘notice’’ in the second sentence; and
■ 3. Removing the word ‘‘writing’’ and
adding in its place the words

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‘‘submitting a written or electronic
request’’ in the third sentence.
■ 4. Removing the words ‘‘Executive
Assistant Commissioner’’ and adding in
their place the words ‘‘appropriate
Executive Director’’;
■ 9. In § 111.14:
■ a. Revise the section heading;.
■ b. Remove paragraph (a);
■ c. Redesignate paragraph (b) as
paragraph (a) and revise the newly
redesignated paragraph;
■ d. Redesginate paragraph (c) as
paragraph (b) and revise the newly
redesignated paragraph; and
■ e. Redesignate paragraph (d) as
paragraph (c) and revise the newly
redesignated paragraph.
The revisions read as follows:
§ 111.14 Background investigation of the
license applicant.

(a) Scope of background investigation.
A background investigation under this
section will ascertain facts relevant to
the question of whether the applicant is
qualified and will cover, but need not be
limited to:
(1) The accuracy of the statements
made in the application and interview;
(2) The business integrity and
financial responsibility of the applicant;
and
(3) When the applicant is an
individual (including a member or a
partnership or an officer of an
association or corporation), the
character and reputation of the
applicant, including any association
with any individuals or groups that may
present a risk to the security or to the
revenue collection of the United States.
(b) Referral to Headquarters. The
director of the designated Center will
forward the application and supporting
documentation to the appropriate
Executive Director Office of Trade. The
Center director will also submit his or
her recommendation for action on the
application.
(c) Additional inquiry. The
appropriate Executive Director, Office of
Trade, may require further inquiry if
additional facts are deemed necessary to
evaluate the application. The
appropriate Executive Director, Office of
Trade, may also require the applicant
(or in the case of a partnership,
association, or corporation, one or more
of its members or officers) to appear in
person or by another approved method
before the appropriate Executive
Director, Office of Trade, or his or her
representatives for the purpose of
undergoing further written or oral
inquiry.
■ 10. Revise § 111.15 to read as follows.

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§ 111.15

Issuance of license.

If the appropriate Executive Director,
Office of Trade, finds that the applicant
is qualified and has paid all applicable
fees prescribed in § 111.96(a), the
Executive Assistant Commissioner will
issue a license. A license for an
individual who is a member of a
partnership or an officer of an
association or corporation will be issued
in the name of the individual licensee
and not in his or her capacity as a
member or officer of the organization
with which he or she is connected. The
license will be forwarded to the director
of the designated Center, who will
deliver it to the licensee.
■ 11. In § 111.16, revise paragraphs (a)
and (b) to read as follows:

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§ 111.16

Denial of a license.

(a) Notice of denial. If the appropriate
Executive Director, Office of Trade,
determines that the application for a
license should be denied for any reason,
notice of denial will be given by him or
her to the applicant and to the director
of the designated Center. The notice of
denial will state the reasons why the
license was not issued.
(b) Grounds for denial. The grounds
sufficient to justify denial of an
application for a license include, but
need not be limited to:
(1) Any cause which would justify
suspension or revocation of the license
of a broker under the provisions of
§ 111.53;
(2) The failure to meet any
requirement set forth in § 111.11;
(3) A failure to establish the business
integrity and financial responsibility of
the applicant;
(4) A failure to establish the good
character and reputation of the
applicant;
(5) Any willful misstatement or
omission of pertinent facts in the
application or interview for the license;
(6) Any conduct which would be
deemed unfair or detrimental in
commercial transactions by accepted
standards;
(7) A reputation imputing to the
applicant criminal, dishonest, or
unethical conduct, or a record of that
conduct; or
(8) Any other relevant information
uncovered over the course of the
background investigation.
■ 12. Revise § 111.17 to read as follows.
§ 111.17

Review of the denial of a license.

(a) By the appropriate Executive
Director, Office of Trade. Upon the
denial of an application for a license,
the applicant may file with the
appropriate Executive Director, Office of
Trade, in writing, additional

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information or arguments in support of
the application and may request to
appear in person, by telephone, or by
other acceptable means of
communication. This filing and request
must be received by the appropriate
Executive Director, Office of Trade
within sixty (60) calendar days of the
denial.
(b) By the Executive Assistant
Commissioner. Upon the decision of the
appropriate Executive Director, Office of
Trade, affirming the denial of an
application for a license, the applicant
may file with the Executive Assistant
Commissioner, in writing, a request for
any additional review that the Executive
Assistant Commissioner, deems
appropriate. This request must be
received by the Executive Assistant
Commissioner within sixty (60)
calendar days of the affirmation by the
appropriate Executive Director, Office of
Trade, of the denial of the application
for a license.
(c) By the Court of International
Trade. Upon a decision of the Executive
Assistant Commissioner affirming the
denial of an application for a license,
the applicant may appeal the decision to
the Court of International Trade,
provided that the appeal action is
commenced within sixty (60) calendar
days after the date of entry of the
Executive Assistant Commissioner’s
decision.
§ 111.18

[Amended]

■ 13. Amend § 111.18 by adding the

phrase ‘‘and addressing how
deficiencies have been remedied’’ after
the term ‘‘§ 111.12’’.
■ 14. In § 111.19:
■ a. Revise the section heading;
■ b. Revise paragraphs (a) and (b);
■ d. Remove paragraph (d);
■ e. Redesignate paragraph (e) as
paragraph (d) and revise the newly
redesignated paragraph;
■ f. Revise paragraph (f); and
■ g. Redesignate paragraph (g) as
paragraph (e) and revise the newly
redesignated paragraph.
The revisions read as follows:
§ 111.19

National permit.

(a) General. A national permit is
required for the purpose of transacting
customs business throughout the
customs territory of the United States as
defined in § 101.1 of this chapter.
(b) Application for a national permit.
An applicant who obtains a passing
grade on the examination for an
individual broker’s license may apply
for a national permit. The applicant will
exercise responsible supervision and
control (as described in § 111.28 of this
part) over the activities conducted

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under that national permit. The national
permit application may be submitted
concurrently with or after the
submission of an application for a
broker’s license. An applicant applying
for a national permit on behalf of a
partnership, association, or corporation
must be a licensed broker employed by
the partnership, association, or
corporation. An application for a
national permit under this paragraph
must be in the form of a letter or CBPapproved electronic submission to the
director of the designated Center. The
application must set forth or attach the
following:
(1) The applicant’s broker license
number and date of issuance if
available;
(2) If the applicant is applying for a
national permit on behalf of a
partnership, association, or corporation:
The name of the partnership,
association, or corporation and the title
held by the applicant within the
partnership, association, or corporation;
(3) If the applicant is applying for a
national permit on behalf of a
partnership, association, or corporation:
A copy of the documentation issued by
a State, or local government that
establishes the legal status and reserves
the business name of the partnership,
association, or corporation;
(4) The address, telephone number,
and email address of the office
designated by the applicant as the office
of record as defined in § 111.1. The
office will be noted in the national
permit when issued;
(5) The name, telephone number, and
email address of the point of contact
described in § 111.3(b) to be available to
CBP to respond to issues related to the
transaction of customs business;
(6) If the applicant is applying for a
national permit on behalf of a
partnership, association, or corporation:
The name, broker license number, office
address, telephone number, and email
address of each individual broker
employed by the partnership,
association, or corporation;
(7) A list of all employees together
with the specific employee information
prescribed in § 111.28 for each
employee;
(8) A supervision plan describing how
responsible supervision and control will
be exercised over the customs business
conducted under the national permit,
including compliance with § 111.28;
(9) The location where records will be
retained (see § 111.23);
(10) The name, telephone number,
and email address of the knowledgeable
employee responsible for broker-wide
records maintenance and financial

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recordkeeping requirements (see
§ 111.21(d)); and
(11) A receipt or other evidence
showing that the fees specified in
§ 111.96(b) and (c) have been paid in
accordance with paragraph (b) of this
section.
*
*
*
*
*
(d) Action on application; list of
permitted brokers. The director of the
designated Center who receives the
application will review to determine
whether the applicant meets the
requirements of paragraphs (a) and (b) of
this section. If the director of the
designated Center is of the opinion that
the national permit should not be
issued, he or she will submit his or her
written reasons for that opinion to the
appropriate Executive Director, Office of
Trade, CBP Headquarters, for
appropriate instructions on whether to
grant or deny the national permit. The
appropriate Executive Director, Office of
Trade, CBP Headquarters, will notify the
applicant if his or her application is
denied. CBP will issue a national permit
to an applicant who meets the
requirements of paragraphs (a) and (b) of
this section. CBP will maintain and
make available to the public an
alphabetical list of permitted brokers.
(e) Review of the denial of a national
permit—(1) By the Executive Assistant
Commissioner. Upon the denial of an
application for a national permit under
this section, the applicant may file with
the Executive Assistant Commissioner,
in writing, additional information or
arguments in support of the denied
application and may request to appear
in person, by telephone, or by other
acceptable means of communication.
This filing and request must be received
by the Executive Assistant
Commissioner within sixty (60)
calendar days of the denial.
(2) By the Court of International
Trade. Upon a decision of the Executive
Assistant Commissioner affirming the
denial of an application for a national
permit under this section, the applicant
may appeal the decision to the Court of
International Trade, provided that the
appeal action is commenced within
sixty (60) calendar days after the date of
entry of the decision by the Executive
Assistant Commissioner.
(f) Responsible supervision and
control. The individual broker who
qualifies for the national permit will
exercise responsible supervision and
control (as described in § 111.28 of this
part) over the activities conducted
under that national permit.
■ 15. In § 111.21:
■ a. Redesignate paragraphs (b) and (c)
as paragraphs (c) and (d);

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■ b. Add a new paragraph (b); and
■ c. Revise the newly redesignated

paragraph (d).
The addition and revision read as
follows:
§ 111.21

Record of transactions.

*

*
*
*
*
(b) Each broker must provide
notification to the broker’s designated
Center of any known breach of
electronic or physical records relating to
the broker’s customs business.
Notification to CBP must be provided
within 72 hours of the discovery of the
breach with a list of all compromised
importer identification numbers (see 19
CFR 24.5).
*
*
*
*
*
(d) Each broker must designate a
knowledgeable employee as the party
responsible for brokerage-wide
recordkeeping requirements. Each
broker must maintain accurate and
current point of contact information in
a CBP-authorized electronic data
interchange (EDI) system. If a CBPauthorized EDI system is not available,
then the information must be provided
in writing to the director of the
designated Center.
■ 16. In § 111.23, revise paragraph (a) to
read as follows:.
§ 111.23

Retention of records.

(a) Place of retention. A licensed
customs broker must maintain the
records referred to in this part,
including any records stored in
electronic formats, within the customs
territory of the United States and in
accordance with the provisions of this
part and part 163 of this chapter.
*
*
*
*
*
■ 17. Revise § 111.24 to read as follows:
§ 111.24

Records confidential.

The records referred to in this part
and pertaining to the business of the
clients serviced by the broker are to be
considered confidential, and the broker
must not disclose their contents or any
information connected with the records
to any persons other than those clients,
their surety on a particular entry, and
representatives of the Department of
Homeland Security (DHS), or other duly
accredited officers or agents of the
United States, except on subpoena or
court order by a court of competent
jurisdiction, or when authorized in
writing by the client. This
confidentiality provision does not apply
to information that properly is available
from a source open to the public.
■ 18. Revise § 111.25 to read as follows:
§ 111.25

Records must be available.

(a) General. During the period of
retention, the broker must maintain the

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records referred to in this part in such
a manner that they may readily be
examined. Records required to be
maintained under the provisions of this
part must be made available upon
reasonable notice for inspection,
copying, reproduction or other official
use by representatives of the
Department of Homeland Security
(DHS) within the prescribed period of
retention or within any longer period of
time during which they remain in the
possession of the broker.
(b) Examination request. Upon
request by DHS to examine records, the
designated recordkeeping contact (see
§ 111.21(d)), must make all records
available to DHS within thirty (30)
calendar days, or such longer time as
specified by DHS, at the location
specified by DHS.
(c) Recordkeeping requirements.
Records subject to the requirements of
part 163 of this chapter must be made
available to DHS in accordance with the
provisions of that part.
§ 111.27

[Amended]

■ 19. Amend § 111.27 by removing the

phrase ‘‘the port director and other
proper officials of the Treasury
Department’’ and adding in its place the
phrase ‘‘DHS, or other duly accredited
officers or agents of the United States,’’.
■ 20. In § 111.28:
■ a. Revise the section heading ;
■ b. Revise paragraph (a);
■ c. Revise paragraph (b);
■ d. Redesignte paragraphs (c) and (d) as
(d) and (e);
■ e. Add a new paragraph (c);
■ f. Amend newly redesignated
paragraph (d) by:
■ 1. Removing the words ‘‘Assistant
Commissioner’’ and adding in their
place the words ‘‘appropriate Executive
Director, Office of Trade,’’; and
■ 2. Removing the phase ‘‘each port
through which a permit has been
granted to the partnership, association,
or corporation’’ and adding in its place
the phrase ‘‘the designated Center’’; and
■ g. Revising newly redesignated
paragraph (e).
The additions and revisions read as
follows:
§ 111.28
control.

Responsible supervision and

(a) General. Every individual broker
operating as a sole proprietor, every
licensed member of a partnership that is
a broker, and every licensed officer of an
association or corporation that is a
broker must exercise responsible
supervision and control (see § 111.1)
over the transaction of the customs
business of the sole proprietorship,
partnership, association, or corporation.

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A sole proprietorship, partnership,
association, or corporation must employ
a sufficient number of licensed brokers
relative to the job complexity, similarity
of subordinate tasks, physical proximity
of subordinates, abilities and skills of
employees, and abilities and skills of
the managers. While the determination
of what is necessary to perform and
maintain responsible supervision and
control will vary depending upon the
circumstances in each instance, factors
which CBP may consider in its
discretion and to the extent any are
relevant include, but are not limited to
the following:
(1) The training provided to broker
employees;
(2) The issuance of instructions and
guidelines to broker employees;
(3) The volume and type of business
of the broker;
(4) The reject rate for the various
customs transactions relative to overall
volume;
(5) The broker employees’
accessibility to current editions of CBP
regulations, the Harmonized Tariff
Schedule of the United States, and CBP
issuances;
(6) The availability of a sufficient
number of individually licensed brokers
for necessary consultation with
employees of the broker;
(7) The frequency of supervisory visits
of an individually licensed broker to
another office of the broker that does not
have an individually licensed broker;
(8) The frequency of audits and
reviews by an individually licensed
broker of the customs transactions
handled by employees of the broker;
(9) The extent to which the
individually licensed broker who
qualifies the permit is involved in the
operation of the brokerage and
communications between CBP and the
broker;
(10) Any circumstances which
indicate that an individually licensed
broker has a real interest in the
operations of a broker;
(11) The timeliness of processing
entries and payment of duty, tax, or
other debt or obligation owing to the
Government for which the broker is
responsible, or for which the broker has
received payment from a client;
(12) Communications between CBP
and the broker;
(13) The broker’s responsiveness and
action to communications, direction,
and notices from CBP;
(14) Communications between the
broker and its officer(s); and,
(15) The broker’s responsiveness and
action to communications and direction
from its officer(s).
(b) Employee information—(1)
Current employees. Each national

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permit holder must submit to the
director of the designated Center, a list
of the names of persons currently
employed by the broker. The list of
employees must be submitted prior to
issuance of a national permit under
§ 111.19 and before the broker begins to
transact customs business. For each
employee, the broker must provide the
name, social security number, date and
place of birth, date of hire, and current
home address. After the initial
submission, an updated list must be
submitted to a CBP-authorized
electronic data interchange (EDI) system
if any of the information required by
this paragraph changes. If a CBPauthorized EDI system is not available,
then the information must be provided
in writing to the director of the
designated Center. The update must be
submitted within thirty (30) calendar
days of the change.
(2) New employees. Within thirty (30)
calendar days of the start of
employment of a new employee(s), the
broker must submit a list of new
employee(s) with the information
required under paragraph (b)(1) of this
section to a CBP-authorized EDI system.
The broker may submit a list of the new
employees or an updated list of all
employees, specifically noting the new
employee(s). If a CBP-authorized EDI
system is not available, then the
information must be provided in writing
to the director of the designated Center.
(3) Terminated employees. Within
thirty (30) calendar days after the
termination of employment of an
employee, the broker must submit a list
of terminated employee(s) to a CBPauthorized EDI system. The broker may
submit a list of the terminated
employees or an updated list of all
employees, specifically noting the
terminated employee(s). If a CBPauthorized EDI system is not available,
then the information must be provided
in writing to the director of the
designated Center.
(c) Broker’s responsibility.
Notwithstanding a broker’s
responsibility for providing the
information required in paragraph (b) of
this section, in the absence of
culpability by the broker, CBP will not
hold the broker responsible for the
accuracy of any information that is
provided to the broker by the employee.
*
*
*
*
*
(e) Change in ownership. If the
ownership of a broker changes and
ownership shares in the broker are not
publicly traded, the broker must
immediately provide written notice of
that fact to the appropriate Executive
Director, Office of Trade, and must send

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34863

a copy of the written notice to the
director of the designated Center. When
a change in ownership results in the
addition of a new principal to the
organization, and whether or not
ownership shares in the broker are
publicly traded, CBP reserves the right
to conduct a background investigation
on the new principal. The director of
the designated Center will notify the
broker if CBP objects to the new
principal, and the broker will be given
a reasonable period of time to remedy
the situation. If the background
investigation uncovers information
which would have been the basis for a
denial of an application for a broker’s
license and the principal’s interest in
the broker is not terminated to the
satisfaction of the director of the
designated Center, suspension or
revocation proceedings may be initiated
under subpart D of this part. For
purposes of this paragraph, a
‘‘principal’’ means any person having at
least a five (5) percent capital,
beneficiary or other direct or indirect
interest in the business of a broker.
■ 21. In § 111.30:
■ a. Paragraphs (a) and (b) are revised;
■ b. In paragraph (c), the first sentence
is revised;
■ c. In paragraph (d):
■ 1. The paragraph heading is amended
by removing the word ‘‘Status’’ and
adding in its place the words ‘‘Triennial
status’’;
■ 2. Paragraphs (1) through (3) are
revised;
■ 3. Paragraph (4) is amended by:
■ i. Removing the words ‘‘the port
director’’ and the word ‘‘Customs’’
before the word ‘‘records’’ and adding in
each place the word ‘‘CBP’’;
■ ii. Removing the word ‘‘pays’’ and
adding in its place the words ‘‘submits
payment or proof of payment of’’; and
■ iii. Removing the words ‘‘Customs
Bulletin’’ and adding in their place the
words ‘‘Federal Register’’; and
■ d. In paragraph (e), remove the words
‘‘each port where the broker was
transacting business within each district
for which a permit has been issued to
the broker’’ and add in their place the
words ‘‘the designated Center’’.
The revisions read as follows:
§ 111.30 Notification of change in address,
organization, name, or location of business
records; status report; termination of
brokerage business.

(a) Change of address. A broker is
responsible for providing CBP with the
broker’s current addresses, which
include the broker’s office of record
address as defined in § 111.1 and, if the
broker is not actively engaged in
transacting business as a broker, the

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broker’s non-business address. If a
broker does not receive mail at the
broker’s office of record or non-business
address, the broker must also provide
CBP with a valid address at which he or
she receives mail. When address
information changes, or the broker is no
longer actively engaged in transacting
business as a broker, he or she must
update his or her address information
within ten (10) calendar days through a
CBP-authorized electronic data
interchange (EDI) system. If a CBPauthorized EDI system is not available,
then address updates must be provided
in writing within ten (10) calendar days
to the director of the designated Center.
(b) Change in organization. A
partnership, association, or corporation
broker must update within ten (10)
calendar days in writing to the director
of the designated Center any of the
following:
(1) The date on which a licensed
member or officer ceases to be the
qualifying member or officer for
purposes of § 111.11(b) or (c)(2), and the
name of the licensed member or officer
who will succeed as the license
qualifier;
(2) The date on which a licensed
employee ceases to be the national
permit qualifier for purposes of
§ 111.19(a), and the name of the
licensed employee who will succeed as
the national permit qualifier; and
(3) Any change in the Articles of
Agreement, Charter, Articles of
Association, or Articles of Incorporation
relating to the transaction of customs
business, or any other change in the
legal nature of the organization (for
example, conversion of a general
partnership to a limited partnership,
merger with another organization,
divestiture of a part of the organization,
or entry into bankruptcy protection).
(c) Change in name. A broker who
changes his or her name, or who
proposes to operate under a trade or
fictitious name in one or more States
and is authorized by State law to do so,
must submit to the appropriate
Executive Director, Office of Trade, at
the Headquarters of U.S. Customs and
Border Protection, evidence of his or her
authority to use that name. * * *
*
*
*
*
*
(d) Triennial status report—(1)
General. Each broker must file a
triennial status report with CBP on
February 1 of each third year after 1985.
The report must be filed through the
CBP-authorized EDI system and
accompanied by payment or valid proof
of payment of the triennial status report
fee prescribed in § 111.96(d). If a CBPauthorized EDI system is not available,

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the triennial status report must be filed
with the director of the designated
Center. A report received during the
month of February will be considered
filed timely. No form or particular
format is required.
(2) Individual—(i) Each individual
broker must state in the report required
under paragraph (d)(1) of this section
whether he or she is actively engaged in
transacting business as a broker. If he or
she is so actively engaged, the broker
must also:
(A) State the name under which, and
the address at which, the broker’s
business is conducted if he or she is a
sole proprietor;
(B) 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 § 111.11(b) or (c)(2); and
(C) State whether or not he or she still
meets the applicable requirements of
§ 111.11 and § 111.19 of this part and
has not engaged in any conduct that
could constitute grounds for suspension
or revocation under § 111.53 of this part.
(ii) An individual broker not actively
engaged in transacting business as a
broker must provide CBP with the
broker’s current mailing address, and
state whether or not he or she still meets
the applicable requirements of § 111.11
and § 111.19 of this part and has not
engaged in any conduct that could
constitute grounds for suspension or
revocation under § 111.53 of this part.
(3) Partnership, association, or
corporation—(i) Each partnership,
association, or corporation broker must
state in the report required under
paragraph (d)(1) of this section the name
under which its business as a broker is
being transacted, the broker’s office of
record (see § 111.1), the name and
address of each licensed member of the
partnership or licensed officer of the
association or corporation, including the
license qualifier under § 111.11(b) or
(c)(2) and the name of the licensed
employee who is the national permit
qualifier under § 111.19(a), and whether
the partnership, association, or
corporation is actively engaged in
transacting business as a broker. The
report must be signed by a licensed
member or officer.
(ii) A partnership, association, or
corporation broker must state whether
or not the partnership, association, or
corporation broker still meets the
applicable requirements of § 111.11 and
§ 111.19 of this part and has not engaged
in any conduct that could constitute

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grounds for suspension or revocation
under § 111.53 of this part.
*
*
*
*
*
■ 22. Section 111.32 is revised to read
as follows:
§ 111.32

False information.

A broker must not file or procure or
assist in the filing of any claim, or of
any document, affidavit, or other
papers, known by such broker to be
false. In addition, a broker must not
give, or solicit or procure the giving of,
any information or testimony that the
broker knew or should have known was
false or misleading in any matter
pending before the Department of
Homeland Security or to any
representative of the Department of
Homeland Security. A broker also must
document and report to CBP when the
broker separates from or cancels
representation of a client as a result of
determining the client is intentionally
attempting to use the broker to defraud
or otherwise commit any criminal act
against the U.S. Government.
■ 23. In § 111.36, revise paragraph (c)(3)
to read as follows:
§ 111.36 Relations with unlicensed
persons.

*

*
*
*
*
(c) * * *
(3) The broker must obtain a customs
power of attorney directly from the
importer of record or drawback
claimant, and not via a freight
forwarder, to transact customs business
for that importer of record or drawback
claimant. No part of the agreement of
compensation between the broker and
the forwarder, nor any action taken
pursuant to the agreement, can forbid or
prevent direct communication between
the importer of record, drawback
claimant, or other party in interest and
the broker; and
*
*
*
*
*
■ 24. In § 111.39:
■ a. Paragraph (a) is revised;
■ b. Paragraphs (b) and (c) are
redesignated as paragraphs (c) and (d);
■ c. A new paragraph (b) is added; and
■ d. Newly redesignated paragraph (c) is
amended by:
■ 1. Removing the word ‘‘paper’’ and
adding in its place the word ‘‘record’’;
and
■ 2. Adding a sentence to the end of the
paragraph.
The additions and revisions reads as
follows:
§ 111.39

Advice to client.

(a) Withheld or false information. A
broker must not withhold information
relative to any customs business from a
client who is entitled to the information.

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The broker must not knowingly impart
to a client false information relative to
any customs business.
(b) Due diligence. A broker must
exercise due diligence to ascertain the
correctness of any information which
the broker imparts to a client, including
advice to the client on the proper
payment of any duty, tax, or other debt
or obligation owing to the U.S.
Government.
(c) * * *The broker must advise the
client on the proper corrective actions
required and retain a record of the
broker’s communication with the client
in accordance with § 111.23 of this part.
*
*
*
*
*
§ 111.42

[Amended]

■ 25. In § 111.42:
■ a. Paragraph (a)(1) is amended by

removing the word ‘‘Customs’’ and
adding in its place the word ‘‘customs’’;
and
■ b. Paragraph (a)(3) is amended by:
■ 1. Adding the word ‘‘Executive’’
before the word ‘‘Assistant’’; and
■ 2. Adding the phrase ‘‘, or his or her
designee,’’ after the words ‘‘Assistant
Commissioner’’.
■ 26. In § 111.45:
■ a. Paragraphs (a), (b), and (c) are
revised; and
■ b. In paragraph (d), remove the crossreference ‘‘or (b)’’ in the second
sentence.
The revisions read as follows:

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§ 111.45

Revocation by operation of law.

(a) License and permit. If a broker that
is a partnership, association, or
corporation fails to have, during any
continuous period of 120 days, at least
one member of the partnership or at
least one officer of the association or
corporation who holds a valid
individual broker’s license, that failure
will, in addition to any other sanction
that may be imposed under this part,
result in the revocation by operation of
law of the license and the national
permit issued to the partnership,
association, or corporation. If a broker
that is a partnership, association, or
corporation fails to employ, during any
continuous period of 180 days, a
licensed customs broker who is the
national permit qualifier for the broker,
that failure will, in addition to any other
sanction that may be imposed under
this part, result in the revocation by
operation of law of the national permit
issued to the partnership, association, or
corporation. CBP will notify the broker
in writing of an impending revocation
by operation of law under this section
thirty (30) calendar days before the
revocation is due to occur, if the broker
has provided advance notice to CBP of

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the underlying events that could cause
a revocation by operation of law under
this section. If the license or permit of
a partnership, association, or
corporation is revoked by operation of
law, CBP will notify the organization of
the revocation.
(b) Annual broker permit fee. If a
broker fails to pay the annual permit
user fee pursuant to § 111.96(c), the
permit is revoked by operation of law.
The director of the designated Center
will notify the broker in writing of the
failure to pay and the revocation of the
permit.
(c) Publication. Notice of any
revocation under this section will be
published in the Federal Register.
*
*
*
*
*
■ 27. In § 111.51:
■ a. Paragraph (a) is revised;
■ b. Paragraph (b) is amended by:
■ 1. Removing the words ‘‘Assistant
Commissioner’’ and adding in their
place the words ‘‘appropriate Executive
Director, Office of Trade,’’; and
■ 2. Removing the word ‘‘Secretary’’
and adding in its place the words
‘‘Executive Assistant Commissioner’’.
The revision reads as follows:
§ 111.51

Cancellation of license or permit.

34865

■ d. Redesignate paragraph (g) as

paragraph (h); and
■ e. Add a new paragraph (g).

The addition reads as follows:
§ 111.53 Grounds for suspension or
revocation of license or permit.

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*
(g) The broker has been convicted of
committing or conspiring to commit an
act of terrorism as described in section
2332b of title 18, United States Code;
or’’
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*
■ 30. Revise § 111.55 to read as follows:
§ 111.55

Investigation of complaints.

Every complaint or charge against a
broker which may be the basis for
disciplinary action may be forwarded
for investigation to the appropriate
investigative authority within DHS. The
investigative authority will submit a
final report on the investigation of
complaints to the director of the
designated Center and send a copy of
the report to the appropriate Executive
Director, Office of Trade.
■ 31. Revise § 111.56 to read as follows:
§ 111.56 Review of report on the
investigation of complaints.

(a) Without prejudice. The appropriate
Executive Director, Office of Trade, may
cancel a broker’s license or permit
‘‘without prejudice’’ upon written
application by the broker if the
appropriate Executive Director, Office of
Trade, determines that the application
for cancellation was not made in order
to avoid proceedings for the suspension
or revocation of the license or permit. If
the appropriate Executive Director,
Office of Trade, determines that the
application for cancellation was made
in order to avoid those proceedings, he
or she may cancel the license or permit
‘‘without prejudice’’ only with
authorization from the Executive
Assistant Commissioner.
*
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*

The director of the designated Center
will review the report on the
investigation of complaints, or if there is
no report on the investigation of
complaints, other documentary
evidence, to determine if there is
sufficient basis to recommend that
charges be preferred against the broker.
The Center director will then submit his
or her recommendation with supporting
reasons to the appropriate Executive
Director, Office of Trade, for final
determination together with a proposed
statement of charges when
recommending that charges be
preferred.
■ 32. Revise § 111.57 to read as follows:

§ 111.52

The appropriate Executive Director,
Office of Trade, will make a
determination on whether or not
charges should be preferred, and will
notify the director of the designated
Center of the decision.

[Amended]

■ 28. Amend § 111.52 by removing the

words ‘‘Assistant Commissioner’’ and
adding in their place the words
‘‘appropriate Executive Director, Office
of Trade,’’.
■ 29. In § 111.53:
■ a. Remove the word ‘‘Customs’’
wherever they appear and add in their
place the term ‘‘CBP’’;
■ b. Amend paragraph (e) by removing
the words ‘‘Assistant Commissioner’’
and adding in their place the words
‘‘appropriate Executive Director, Office
of Trade’’;
■ c. Amend paragraph (f) by removing
the word ‘‘or’’ following the semicolon;

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§ 111.57 Determination by appropriate
Executive Director, Office of Trade.

§ 111.59

[Amended]

■ 33. In § 111.59, paragraphs (a) and (b)

are amended by removing the word
‘‘port’’ before the word ‘‘director’’ and
adding the words ‘‘of the designated
Center’’ after the word ‘‘director’’.
§ 111.60

[Amended]

■ 34. In § 111.60, remove the word

‘‘port’’ and add the words ‘‘of the

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designated Center’’ after the word
‘‘director’’.
■ 35. Revise § 111.61 to read as follows:
§ 111.61 Decision on preliminary
proceedings.

The director of the designated Center
will prepare a summary of any oral
presentations made by the broker or the
broker’s attorney and forward it to the
appropriate Executive Director, Office of
Trade, together with a copy of each
paper filed by the broker. The director
of the designated Center will also give
to the appropriate Executive Director,
Office of Trade, his or her
recommendation on action to be taken
as a result of the preliminary
proceedings. If the appropriate
Executive Director, Office of Trade,
determines that the broker has
satisfactorily responded to the proposed
charges and that further proceedings are
not warranted, he or she will so inform
the director of the designated Center
who will notify the broker. If no
response is filed by the broker or if the
appropriate Executive Director, Office of
Trade, determines that the broker has
not satisfactorily responded to all of the
proposed charges, he or she will advise
the director of the designated Center of
that fact and instruct him or her to
prepare, sign, and serve a notice of
charges and the statement of charges. If
one or more of the charges in the
proposed statement of charges was
satisfactorily answered by the broker in
the preliminary proceedings, the
appropriate Executive Director, Office of
Trade, will instruct the director of the
designated Center to omit those charges
from the statement of charges.
■ 36. In § 111.62:
■ a. Revise paragraph (d); and
■ b. Amend paragraph (e) by removing
the phrase ‘‘, in duplicate’’ and the word
‘‘port’’, and adding the words ‘‘of the
designated Center’’ after the word
‘‘director’’.
The revision reads as follows:
§ 111.62

Contents of notice of charges.

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(d) The broker will be notified of the
time and place of a hearing on the
charges; and
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*
■ 37. In § 111.63:
■ a. Remove the word ‘‘port’’wherever it
appears and add the words ‘‘of the
designated Center’’ after the word
‘‘director’’ wherever it appears; and
■ b. Paragraphs (a)(2) and (c) are
revised.
The revisions read as follows:
§ 111.63 Service of notice and statement
of charges.

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(a) * * *
(2) By certified mail, return receipt
requested, addressed to the broker’s
office of record (or other address as
provided pursuant to § 111.30).
*
*
*
*
*
(c) Certified mail; evidence of service.
When service under this section is by
certified mail to the broker’s office of
record (or other address as provided
pursuant to § 111.30), the receipt of the
return card signed or marked will be
satisfactory evidence of service.
§ 111.64

[Amended]

■ 38. In § 111.64, paragraph (a) is

amended by removing the word ‘‘port’’
and adding the words ‘‘of the designated
Center’’ after the word ‘‘director’’.
§ 111.66

[Amended]

■ 39. Section 111.66 is amended by

removing the words ‘‘Secretary of
Homeland Security, or his designee,’’
and adding in its place the words
‘‘Executive Assistant Commissioner’’.
§ 111.67

[Amended]

■ 40. In § 111.67:
■ a. Paragraph (d) is amended by

removing the word ‘‘port’’ wherever it
appears and adding the words ‘‘of the
designated Center’’ after the word
‘‘director’’ wherever it appears; and
■ b. Paragraph (e) is removed.
§ 111.69

[Amended]

■ 41. Section 111.69 is amended by

removing the words ‘‘Secretary of
Homeland Security, or his designee’’
and adding in their place the words
‘‘Executive Assistant Commissioner’’.
§ 111.70

[Amended]

■ 42. Section 111.70 is amended by

removing the words ‘‘Secretary of
Homeland Security, or his designee’’
and adding in their place the words
‘‘Executive Assistant Commissioner’’.
§ 111.71

[Amended]

■ 43. Section 111.71 is amended by

removing the words ‘‘Secretary of
Homeland Security, or his designee’’
and adding in their place the words
‘‘Executive Assistant Commissioner’’.
■ 44. Revise § 111.72 to read as follows:
§ 111.72 Dismissal subject to new
proceedings.

If the Executive Assistant
Commissioner finds that the evidence
produced at the hearing indicates that a
proper disposition of the case cannot be
made on the basis of the charges
preferred, he or she may instruct the
director of the designated Center to
serve appropriate charges as a basis for
new proceedings to be conducted in
accordance with the procedures set
forth in this subpart.

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■ 45. Revise § 111.74 to read as follows:

§ 111.74 Decision and notice of
suspension or revocation or monetary
penalty.

If the Executive Assistant
Commissioner finds that one or more of
the charges in the statement of charges
is not sufficiently proved, the
suspension, revocation, or monetary
penalty action may be based on any
remaining charges if the facts alleged in
the charges are established by the
evidence. If the Executive Assistant
Commissioner in the exercise of
discretion and based solely on the
record, issues an order suspending a
broker’s license or permit for a specified
period of time or revoking a broker’s
license or permit or, except in a case
described in § 111.53(b)(3), assessing a
monetary penalty in lieu of suspension
or revocation, the appropriate Executive
Director, Office of Trade, will promptly
provide written notification of the order
to the broker and, unless an appeal from
the order of the Executive Assistant
Commissioner is filed by the broker (see
§ 111.75), the appropriate Executive
Director, Office of Trade, will publish a
notice of the suspension or revocation,
or the assessment of a monetary penalty,
in the Federal Register. If no appeal
from the order of the Executive
Assistant Commissioner is filed, an
order of suspension or revocation or
assessment of a monetary penalty will
become effective sixty (60) calendar
days after issuance of written
notification of the order unless the
Executive Assistant Commissioner finds
that a more immediate effective date is
in the national or public interest. If a
monetary penalty is assessed and no
appeal from the order of the Executive
Assistant Commissioner is filed,
payment of the penalty must be
tendered within sixty (60) calendar days
after the effective date of the order, and,
if payment is not tendered within that
sixty (60)-day period, the license or
permit of the broker will immediately be
suspended until payment is made.
§ 111.75

[Amended]

■ 46. In § 111.75:
■ a. In the section heading, remove the

word ‘‘Secretary’s’’ and add in its place
the words ‘‘Executive Assistant
Commissioner’s’’;
■ b. Remove the words ‘‘Secretary of
Homeland Security, or his designee’’
and add in their place the words
‘‘Executive Assistant Commissioner’’;
and
■ c. Remove the word ‘‘Secretary’s’’ and
add in its place the words ‘‘Executive
Assistant Commissioner’s’’.
■ 47. In § 111.76:

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■ a. In paragraph (a), remove the word

§ 111.78

‘‘written’’ and the words ‘‘in duplicate’’
in the first sentence; and remove the
words ‘‘Assistant Commissioner’’ and
add in their place the words
‘‘appropriate Executive Director, Office
of Trade,’’; and
■ b. Paragraph (b) is revised.
The revision reads as follows:

■ 49. Section 111.78 is amended by

§ 111.76

Reopening the case.

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*
*
*
(b) Procedure. The appropriate
Executive Director, Office of Trade, will
forward the application, together with a
recommendation for action thereon, to
the Executive Assistant Commissioner.
The Executive Assistant Commissioner
may grant or deny the application to
reopen the case and may order the
taking of additional testimony before the
appropriate Executive Director, Office of
Trade. The appropriate Executive
Director, Office of Trade, will notify the
applicant of the decision by the
Executive Assistant Commissioner. If
the Executive Assistant Commissioner
grants the application and orders a
hearing, the appropriate Executive
Director, Office of Trade, will set a time
and place for the hearing and give due
written notice of the hearing to the
applicant. The procedures governing the
new hearing and recommended decision
of the hearing officer will be the same
as those governing the original
proceeding. The original order of the
Executive Assistant Commissioner will
remain in effect pending conclusion of
the new proceedings and issuance of a
new order under § 111.77.
■ 48. Revise § 111.77 to read as follows:
§ 111.77
order.

Notice of vacated or modified

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removing the word ‘‘port’’ and adding
the words ‘‘of the designated Center’’
after the word ‘‘director’’.
§ 111.79

[Amended]

■ 50. Section 111.79 is amended by

removing the words ‘‘Assistant
Commissioner’’ and adding in their
place the words ‘‘appropriate Executive
Director, Office of Trade,’’ wherever
they appear.
■ 51. Revise § 111.81 to read as follows.
§ 111.81

Settlement and compromise.

The Executive Assistant
Commissioner, may settle and
compromise any disciplinary
proceeding which has been instituted
under this subpart according to the
terms and conditions agreed to by the
parties including, but not limited to, the
assessment of a monetary penalty in lieu
of any proposed suspension or
revocation of a broker’s license or
permit.
§ 111.91

[Amended]

■ 52. In § 111.91:
■ a. The introductory text is amended

by removing the word ‘‘Customs’’ and
adding in its place the term ‘‘CBP’’; and
■ b. Paragraph (a) is amended by
removing the phrase ’’ §§ 111.53 (a)
through (f)’’ and adding in its place the
phrase ‘‘§ 111.53 (a) through (g)’’.
§ 111.92

[Amended]

■ 53. In § 111.92, amend paragraph (a)

by removing the word ‘‘Customs’’ and
adding in its place the term ‘‘CBP’’.
§ 111.94

If, pursuant to § 111.76 or for any
other reason, the Executive Assistant
Commissioner issues an order vacating
or modifying an earlier order under
§ 111.74 suspending or revoking a
broker’s license or permit, or assessing
a monetary penalty, the appropriate
Executive Director, Office of Trade, will
notify the broker in writing and will
publish a notice of the new order in the
Federal Register.

[Amended]

[Amended]

■ 54. Section 111.94 is amended by

removing the word ‘‘Customs’’ wherever
it appears and adding in its place the
term ‘‘CBP’’.
■ 55. In § 111.96, revise paragraphs (a),
(b) and (d) to read as follows.
§ 111.96

Fees.

(a) License fee; examination fee;
fingerprint fee. Each applicant for a
broker’s license pursuant to § 111.12 of
this part must pay a fee of $300 for an

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individual license application and $500
for a partnership, association, or
corporation license application to defray
the costs to CBP in processing the
application. Each individual who
intends to take the examination
provided for in § 111.13 of this part
must pay a $390 examination fee before
taking the examination. An individual
who submits an application for a license
must also pay a fingerprint check and
processing fee; the director of the
designated Center will inform the
applicant of the current Federal Bureau
of Investigation fee for conducting
fingerprint checks and the CBP
fingerprint processing fee, the total of
which must be paid to CBP before
further processing of the application
will occur.
(b) Permit application fee. An
application fee of $100 must be paid in
connection with a national permit
issued under § 111.19 of this part to
defray the processing costs, including
costs associated with an application for
reinstatement of a permit that was
revoked by operation of law or
otherwise.
*
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*
*
(d) Triennial status report fee. The
triennial status report required under
§ 111.30(d) must be accompanied by a
fee of $100 to defray the costs of
administering the reporting
requirement. The report must be filed
through the CBP-authorized EDI system
and accompanied
by payment or valid proof of payment
of the triennial status report fee
prescribed by this section. If a CBPauthorized EDI system is not available,
the triennial status report must be filed
with the director of the designated
Center.
*
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*
Dated: March 3, 2020.
Chad F. Wolf,
Acting Secretary, Department of Homeland
Security.
[FR Doc. 2020–04711 Filed 6–4–20; 8:45 am]
BILLING CODE 9111–14–P

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