Rule2023-12921
Continuing Education for Licensed Customs Brokers
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 23, 2023
Effective
July 24, 2023
Issuing agencies
Homeland Security DepartmentU.S. Customs and Border Protection
Abstract
This document adopts as final, with changes, proposed amendments to the U.S. Customs and Border Protection (CBP) regulations requiring continuing education for individual customs broker license holders (individual brokers) and the framework for administering this requirement. By requiring individual brokers to remain knowledgeable about recent developments in customs and related laws as well as international trade and supply chains, CBP's framework will enhance professionalism and competency within the customs broker community. CBP has determined that this framework will contribute to increased trade compliance and better protection of the revenue of the United States.
Full Text
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[Federal Register Volume 88, Number 120 (Friday, June 23, 2023)]
[Rules and Regulations]
[Pages 41224-41260]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-12921]
[[Page 41223]]
Vol. 88
Friday,
No. 120
June 23, 2023
Part III
Department of Homeland Security
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U.S. Customs and Border Protection
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19 CFR Part 111
Continuing Education for Licensed Customs Brokers; Final Rule
Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules
and Regulations
[[Page 41224]]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
19 CFR Part 111
[USCBP-2021-0030; CBP Dec. 23-04]
RIN 1651-AB03
Continuing Education for Licensed Customs Brokers
AGENCY: U.S. Customs and Border Protection, Department of Homeland
Security.
ACTION: Final rule.
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SUMMARY: This document adopts as final, with changes, proposed
amendments to the U.S. Customs and Border Protection (CBP) regulations
requiring continuing education for individual customs broker license
holders (individual brokers) and the framework for administering this
requirement. By requiring individual brokers to remain knowledgeable
about recent developments in customs and related laws as well as
international trade and supply chains, CBP's framework will enhance
professionalism and competency within the customs broker community. CBP
has determined that this framework will contribute to increased trade
compliance and better protection of the revenue of the United States.
DATES: This final rule is effective as of July 24, 2023.
FOR FURTHER INFORMATION CONTACT: Elena D. Ryan, Special Advisor,
Programs and Policy Analysis, Regulations and Rulings, Office of Trade,
U.S. Customs and Border Protection, at (202) 325-0001 or
<a href="/cdn-cgi/l/email-protection#93d0dcddc7daddc6daddd4d6d7c6d0d2c7dadcddd3f0f1e3bdf7fbe0bdf4fce5"><span class="__cf_email__" data-cfemail="11525e5f45585f44585f56545544525045585e5f517273613f7579623f767e67">[email protected]</span></a>; and, Sharolyn J. McCann, Director,
Commercial Operations, Revenue and Entry, Office of Trade, U.S. Customs
and Border Protection, at (202) 384-8935,
<a href="/cdn-cgi/l/email-protection#1c4f747d6e73706572327632717f7f7d72725c7f7e6c3278746f327b736a"><span class="__cf_email__" data-cfemail="7e2d161f0c11120710501450131d1d1f10103e1d1c0e501a160d50191108">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background and Summary
A. Authority for the Continuing Broker Education Requirement
B. Prior Related Publications
C. Overview of Licensing Requirements for Individual Brokers
D. Initial Certification Date
E. CBP Implementation of the Continuing Broker Education
Requirement
II. Summary of Changes From the Proposed Regulations
III. Discussion of Comments
A. The Continuing Broker Education Requirement
B. Certification Dates
C. Individuals to Whom the Requirement Applies
D. Completing the 36 Continuing Education Credits
E. Recordkeeping
F. CBP-Selected Accreditors
G. Qualified Continuing Broker Education
H. The Accreditation Process
I. Enforcement
IV. Conclusion
V. Statutory and Regulatory Requirements
A. Executive Orders 12866 and 13563
B. Regulatory Flexibility Act
C. Paperwork Reduction Act
VI. Signing Authority
VII. List of Subjects
I. Background and Summary
A. Authority for the Continuing Broker Education Requirement
Section 641 of the Tariff Act of 1930, as amended (19 U.S.C. 1641),
provides that individuals and business entities must hold a valid
customs broker's license and permit to transact customs business on
behalf of others. The statute also sets forth standards for the
issuance of broker licenses and permits, provides for disciplinary
action against customs brokers in the form of suspension or revocation
of such licenses and permits or assessment of monetary penalties and
provides for the assessment of monetary penalties against persons for
conducting customs business without the required broker's license.
Section 641 authorizes the Secretary of the U.S. Department of the
Treasury (Treasury) to prescribe rules and regulations relating to the
customs business of brokers as may be necessary to protect importers
and the revenue of the United States and to carry out the other
provisions of section 641. See 19 U.S.C. 1641(f). That authority was
delegated to the Secretary of the U.S. Department of Homeland Security
(DHS) as a result of the enactment of the Homeland Security Act of 2002
(Pub. L. 107-296, 116 Stat. 2142).\1\ Accordingly, the Secretary of DHS
is authorized to prescribe rules and regulations relating to the
customs business of brokers as may be necessary to protect importers
and the revenue of the United States and to carry out the other
provisions of section 641. See 19 U.S.C. 1641(f).
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\1\ The Homeland Security Act of 2002 generally transferred the
functions of the former U.S. Customs Service from the Secretary of
the Treasury to the Secretary of DHS and provided that the Secretary
of the Treasury retain authority over customs revenue functions,
unless specifically delegated to the Secretary of DHS. See 6 U.S.C.
212(a)(1). Paragraph 1(a)(i) of Treasury Department Order No. 100-16
contains a list of subject matters over which the Secretary of the
Treasury retained authority. See Appendix to part 0 of title 19,
Code of Federal Regulations (Appendix to 19 CFR part 0). The other
functions of the former U.S. Customs Service not expressly listed in
paragraph 1(a)(i) of Treasury Department Order No. 100-16 were
transferred from the Secretary of the Treasury to the Secretary of
DHS. As paragraph 1(a)(i) of Treasury Department Order No. 100-16
does not list the regulation of customs brokers, the Secretary of
the Treasury did not retain authority over this subject matter.
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Furthermore, 19 U.S.C. 1641(b)(4) imposes upon customs brokers the
duty to exercise responsible supervision and control over the customs
business that it conducts. The statute also permits the Secretary of
DHS to test persons for their knowledge of customs and related laws
prior to issuing a license. See 19 U.S.C. 1641(b)(2). Based upon 19
U.S.C. 1641, U.S. Customs and Border Protection (CBP) has promulgated
regulations setting forth additional obligations of customs brokers
pertinent to the conduct of their customs business. CBP believes that
maintaining current knowledge of customs laws and procedures is
essential for customs brokers to meet their legal duties. Requiring a
customs broker to fulfill a continuing education requirement is the
most effective means to ensure that the customs broker keeps up with an
ever-changing customs practice after passing the broker exam and
subsequently receiving the license.
B. Prior Related Publications
On October 28, 2020, CBP published an advance notice of proposed
rulemaking (ANPRM) in the Federal Register (85 FR 68260) soliciting
comments on a potential framework of continuing education requirements
for licensed customs brokers. CBP sought to gather information and data
from the broader customs community, analyze the potential impact of
such a framework on the customs brokers, and consider whether such a
requirement would contribute to increased trade compliance. The ANPRM
provided for a 60-day public comment period, which closed on December
28, 2020. CBP received 29 comments in response to the ANPRM.
These comments were addressed in a notice of proposed rulemaking
(NPRM) that CBP published in the Federal Register (86 FR 50794) on
September 10, 2021, announcing a proposed framework for individual
customs broker license holders (individual brokers) to administratively
maintain their license through completion of qualified continuing
broker education.\2\
[[Page 41225]]
CBP proposed to require individual brokers to complete at least 36
continuing education credits per triennial period with limited
exceptions. The NPRM provided for a 60-day public comment period, which
closed on November 9, 2021.\3\ CBP received 70 comments in response to
the NPRM.
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\2\ For clarity, in this document, CBP will refer to individuals
who obtained a valid customs broker's license as an ``individual
customs broker license holder,'' ``individual customs broker,'' or
``individual broker.'' ``Customs brokers'' refers to the entire body
of individuals, partnerships, associations, and corporations that
have obtained a valid customs broker's license. See 19 CFR 111.1.
\3\ The comments received in response to the NPRM can be viewed
in their entirety on the public docket, Docket No. USCBP-2021-0030,
which can be accessed through <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
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Below is a summary of the rationale provided for the rule. For a
more detailed discussion, including background information for the
development of this rule, please refer to the NPRM.
C. Overview of Licensing Requirements for Individual Brokers
CBP is responsible for administering the licensing requirements for
customs brokers and sets forth those requirements in part 111 of title
19 of the Code of Federal Regulations (19 CFR part 111). A prospective
customs broker must pass a broker exam administered by CBP which is
designed to determine the individual's knowledge of customs and related
laws, regulations and procedures, bookkeeping, accounting, and all
other appropriate matters. Subsequently, the individual submits an
application for a broker's license. If CBP finds that the applicant is
qualified, following an investigation, and has paid all applicable
fees, then CBP will issue a broker's license. In order to qualify for a
license, an individual must be a United States citizen who is at least
21 years of age and not an officer or employee of the United States
Government, be in possession of good moral character, and pass a broker
exam administered by CBP. See 19 CFR 111.11.
Customs brokers administratively maintain a license through the
filing of reports pursuant to 19 U.S.C. 1641(g) and 19 CFR 111.30(d)
(the triennial status report), the payment of fees required in 19 CFR
111.96, and notifications to CBP as set forth in 19 CFR 111.30, as well
as fulfilling other legal obligations.\4\ See generally 19 CFR 111.21-
111.45. This document finalizes an additional administrative
requirement, i.e., completion of the continuing broker education
requirement, for individual brokers to maintain their licenses. As
discussed in greater detail in the NPRM, recent developments have
demonstrated the need for key parties involved in importing, exporting,
claiming drawback, etc., to keep up to date on training and
continuously build and maintain their knowledge of current
requirements.\5\
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\4\ Customs brokers have legal obligations, to CBP and to the
broker's clientele, including, but not limited to, the exercising of
due diligence in making financial settlements, answering
correspondence, and preparing paperwork or filings related to
customs business. See 19 CFR 111.29(a). Under 19 U.S.C. 1641(b)(4),
a customs broker has the statutory duty to exercise responsible
supervision and control over the customs business that he or she
conducts. See also 19 CFR 111.1 and 111.28(a).
\5\ Recent developments, include, but are not limited to,
drawback modernization, 83 FR 64942 (Dec. 18, 2018), implementation
of the Agreement between the United States of America, the United
Mexican States, and Canada (the USMCA), United States-Mexico-Canada
Agreement Implementation Act, Public Law 116-113, 134 Stat. 11 (19
U.S.C. Chapter 29), the dramatic increase in low-value shipments (19
U.S.C. 1321(a)(2)(C)), and CBP's updates to 19 CFR part 111, the
regulations governing customs brokers and their obligations to
clients and CBP. See 87 FR 63267 (Oct. 18, 2022) and 87 FR 63262
(Oct. 18, 2022).
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D. Initial Certification Date
As detailed in Section II and in the responses to relevant comments
in Section III below, individual brokers will be required to certify
compliance with the continuing broker education requirements (trainings
and educational activity that have been accredited by a CBP-selected
accreditor or identified by CBP per Sec. 111.103(a)) as part of the
filing of their 2027 triennial status reports (approximately between
December 15, 2026, and February 28, 2027). To allow for the full
implementation of the continuing education requirement, CBP will reduce
the number of required continuing education credits for the triennial
period beginning on February 1, 2024. It is important to note that the
proration will only affect the triennial period between 2024 and 2027
and all triennial periods thereafter will require the completion and
certification of completion of 36 continuing education credits. For the
triennial period beginning on February 1, 2024, CBP will reduce the 36
continuing education credits, required to be completed, by six credits
for approximately every six months that elapse between February 1, 2024
and the compliance date on which individual brokers may begin
completing qualified continuing broker education courses, as announced
in a Federal Register notice, following the publication of this final
rule. Along with specifying the number of required continuing education
credits the Federal Register notice will also announce the date on
which qualified continuing broker education courses will be available
to individual brokers to begin meeting the requirement. CBP will
publish this Federal Register notice at least 30 days prior to the
compliance date announced therein. No educational activities or
trainings completed before the compliance date announced in the Federal
Register notice will qualify towards the continuing education credits
required to be completed by the filing of the 2027 triennial status
report.
E. CBP Implementation of the Continuing Broker Education Requirement
To ensure qualified trainings and educational activities are
available to individual brokers, CBP will take certain necessary steps
to implement the continuing broker education requirement. To collect
information about standards and to identify qualified accreditors, CBP
is utilizing the System for Award Management (SAM), which will involve
a Request for Information (RFI) and Request for Proposals (RFPs).\6\
Subsequently, CBP will announce the CBP-selected accreditors on its
website at <a href="http://CBP.gov">CBP.gov</a>, to ensure that all individual brokers are aware of
the selected accreditors. Afterwards, CBP, in conjunction with the CBP-
selected accreditors, will establish standards and guidelines for
qualified continuing broker education, including information on how and
when CBP-selected accreditors will begin considering trainings and
educational activities for accreditation. Finally, CBP will announce
the initial qualified continuing broker education trainings and
educational activities available to individual brokers and the means
through which individual brokers may identify additional qualified
trainings and educational activities.
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\6\ Access to and additional information about the SAM may be
viewed at <a href="http://www.sam.gov">www.sam.gov</a>.
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II. Summary of Changes From the Proposed Regulations
CBP received 70 comments in response to the NPRM. As more fully
discussed in Section III below, CBP carefully considered all public
comments to the NPRM and determined to finalize the continuing broker
education framework with minor changes. While considering the public
comments, CBP identified five changes that would reduce confusion and
increase the intended flexibility of the continuing broker education
requirement, and one nomenclature change intended to provide clarity
and consistency. CBP is also changing one amendatory instruction to
account for an amendment made by another final
[[Page 41226]]
rule document \7\ that amended the broker regulations in part 111
between the issuance of the NPRM and this document, as described in
more detail below.
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\7\ On October 18, 2022, CBP published a final rule document in
the Federal Register entitled ``Modernization of the Customs Broker
Regulations'' (the Part 111 Rewrite). See 87 FR 63267.
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In the NPRM, CBP did not specify when individual brokers would be
expected to certify completion of the initial three-year cycle of the
continuing broker education requirement. See 86 FR 50794 (Sept. 10,
2021). In this rule, as discussed in more detail below in the relevant
comments, CBP is specifying that the first time at which individual
brokers will be required to certify completion of the continuing broker
education requirement will be with the filing of their 2027 triennial
status reports.
In the NPRM, at Sec. 111.1, CBP proposed the smallest unit of
continuing education credit as one credit per one hour of continuous
participation in qualified continuing broker education. See 86 FR 50794
(Sept. 10, 2021). In this rule, as discussed in more detail below in
the relevant comments, CBP will allow for the recognition of ``half
credits'' (30 minutes of continuous participation in qualifying
continuing broker education) as the smallest unit of continuing
education credit.
In the NPRM, in Sec. 111.103(a)(1), CBP proposed that qualified
continuing broker education must be offered by a government agency or
be approved and assigned continuing education credit by a CBP-selected
accreditor. See 86 FR 50794 (Sept. 10, 2021). In this rule, as
discussed in more detail below in the relevant comments, when qualified
continuing broker education is offered by a government agency, CBP will
identify the specific qualified continuing broker education
opportunities offered by CBP or another government agency, after
consultation with the other government agency, that are relevant to
customs business and may provide continuing education credit upon
completion.
In the NPRM, in Sec. 111.103(a)(2), CBP proposed four broad
categories of recognized trainings or educational activities. See 86 FR
50794 (Sept. 10, 2021). In this rule, as discussed in more detail below
in the relevant comments, CBP will amend the description of the first
category (allowing for seminars, webinars, or workshops) and add a
fifth category to allow for self-guided trainings and educational
activities which culminate in a retention test.
In the NPRM, in Sec. 111.103(d), CBP outlined the responsibilities
of CBP-selected accreditors towards the accreditation process. See 86
FR 50794 (Sept. 10, 2021). In this rule, as discussed in more detail
below in the relevant comments, CBP will explicitly prohibit CBP-
selected accreditors from denying accreditation to training or
educational activity solely because it was previously denied by the
CBP-selected accreditor or any other CBP-selected accreditor.
Additionally, CBP has decided to use the phrase ``individual
brokers'' in the regulations for clarity and consistency when referring
to the specific subset of customs brokers affected by the continuing
broker education requirement. For clarity, CBP differentiates between
the entire body of entities with a valid customs broker license and
individuals with a valid customs broker license. For consistency, the
entire licensed body is referred to as ``customs brokers'' and licensed
individuals are referred to as ``individual brokers.'' The continuing
education requirement only applies to individual brokers and not to the
entire body of customs brokers (which includes individuals,
partnerships, associations, and corporations). This final rule document
adds the phrase ``individual brokers'' in Sec. Sec. 111.0 and 111.1
when referring to the continuing education requirement and adds
``individual brokers'' elsewhere in the following other Sec. Sec. of
the newly added title of subpart F of part 111: 111.101, 111.102,
111.103, and 111.104. For additional information, please see the
relevant comments in Section III below.
Finally, on October 18, 2022, CBP published a final rule document
in the Federal Register entitled ``Modernization of the Customs Broker
Regulations'' (the Part 111 Rewrite). See 87 FR 63267. That final rule
substantially rewrote part 111 of title 19 of the CFR and made certain
changes to 19 CFR 111.30. As such, in this document, CBP has made
technical and conforming changes to 19 CFR 111.30(d) from what was
proposed in the NPRM to incorporate the structural changes made in the
Part 111 Rewrite. CBP is further making a minor change to the section
heading of 19 CFR 111.30. CBP had included a sightly revised section
heading in the Part 111 Rewrite final rule, as well as in the preceding
NPRM \8\ but inadvertently failed to include an instruction for the
Federal Register to make that change. In addition, CBP is correcting a
grammatical error in Sec. 111.19(c) that was made in a concurrent
final rule, published in the Federal Register on the same day, entitled
``Elimination of Customs Broker District Permit Fee'' (87 FR 63262).
The term ``permit user fee'' was inadvertently written as ``user permit
fee.''
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\8\ 85 FR 34836 (June 5, 2020).
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III. Discussion of Comments
CBP has carefully considered all comments submitted in response to
the NPRM. During the 60-day public comment period, CBP received 70
comments. Of the 70 comments, 68 comments were responsive, one comment
was a duplicate, and one comment was beyond the scope of the proposed
rule. Of the 68 responsive comments, 57 comments explicitly supported
the continuing broker education requirement, while seven comments
explicitly disputed the need to have a continuing broker education
requirement, with one of the seven comments disputing the application
of the requirement to brokers only. Four commenters sought additional
information. Generally, the 68 responsive comments addressed multiple
topics that CBP has divided, grouped, and addressed below.
A. The Continuing Broker Education Requirement
In the NPRM, CBP proposed an additional administrative requirement
for individual brokers to maintain their licenses by completing
qualified continuing broker education. CBP received many comments
expressing support for the continuing broker education requirement and
multiple comments disputing the need for a continuing broker education
requirement.
Comment: Many commenters stated that a continuing broker education
requirement was necessary. Certain commenters highlighted that the
requirement would ensure better outcomes for clients, professionalize
the field, ensure individual brokers remained knowledgeable about the
law, and help individual brokers avoid costs such as fines and time
spent correcting filings. Commenters also highlighted that continuing
education promotes compliance and engagement that assists CBP in
protecting U.S. borders, increases trade compliance, and helps protect
the revenue of the United States.
Response: CBP appreciates the supportive comments regarding the
need for the continuing broker education requirement. CBP concurs with
the comments as summarized above and in CBP's opinion those comments
support CBP's assessment of the need for a continuing education
requirement.
[[Page 41227]]
Comment: Multiple commenters stated that a continuing broker
education requirement is unnecessary because the customs broker
licensing exam was a sufficiently effective barrier to entry of
unqualified individuals and clearly demonstrated the superior and
sufficient knowledge base of individuals passing the exam. Commenters
also highlighted that open access to the statutes and regulations and
CBP's public communications are sufficient to keep individual brokers
informed and knowledgeable.
Response: CBP disagrees that the licensing exam, free webinars and
symposiums, open access to governing statutes and regulations, etc.,
continue to be sufficient to ensure a professional and up-to-date
broker community. For example, the licensing exam ensures an extensive
and accurate knowledge base at a certain point in time. (Section
111.102(a)(2) explicitly recognizes this reality and provides newly
licensed individual brokers with a waiver of the continuing broker
education requirement for the triennial period in which they receive
their licenses.) However, the exam does not ensure that an individual
broker will maintain an up-to-date knowledge base in the future,
particularly when dealing with a very dynamic international trade
environment that is changing frequently. Furthermore, free and easy
access to CBP information and the regulations does not ensure
individual brokers are taking advantage of access and staying informed.
Accordingly, continuing education is required, and 36 continuing
education credits over three years is a reasonable expectation of
someone who holds a Federally issued, professional license.
Comment: Multiple commenters stated that a continuing broker
education requirement was an unnecessary expense and a burden on
individuals and companies.
Response: CBP disagrees that the continuing broker education
requirement is an unnecessary expense and a burden. CBP has examined
the costs and burdens that the continuing broker education requirement
will place on individual brokers and companies and has determined it is
not overly burdensome. See Section V, Statutory and Regulatory
Requirements, below for more information. Furthermore, CBP will ensure
that there will be free qualified continuing broker education
activities available to individual brokers through CBP and other U.S.
government agency offerings that is available on CBP's website <a href="http://CBP.gov">CBP.gov</a>.
Comment: Multiple commenters requested that the continuing broker
education requirement should not present additional costs to individual
brokers.
Response: CBP agrees in principle and does not intend to create a
specific financial burden on individual brokers. There will be some
burden imposed by the continuing broker education requirement because
individual brokers will need to receive 36 continuing education credits
over three years. However, CBP believes this burden will not be
significant and has taken steps to lessen the burden. See Section V,
Statutory and Regulatory Requirements, below for more information. For
example, CBP will be providing enough free continuing education credits
from CBP online modules and in-person events to cover the 36 continuing
education credits required in a triennial period.
Comment: Multiple commenters expressed concern that a continuing
broker education requirement will have an outsized effect concerning
time, expense, etc., on small businesses and individual brokers who are
working for themselves.
Response: CBP recognizes that this requirement will have an
outsized impact on small businesses relative to larger firms. However,
as more fully discussed in the Regulatory Flexibility Act section, CBP
does not consider this rule to have a significant economic impact on a
substantial number of small entities. See Section V, Statutory and
Regulatory Requirements. While CBP realizes that a greater number of
employees of smaller firms will be required to begin continuing
education as a result of the rule, CBP designed the continuing broker
education requirement so that it is the same for every individual
broker. First, every individual broker is required to complete
qualified continuing broker education and maintain his or her own
records. Second, all qualified continuing broker education must be
identified by CBP, as explained in Subsection G below, or accredited by
a CBP-selected accreditor. As such, all individual brokers must
complete the same requirements and the sources for completing those
requirements are restricted in the same way. CBP does recognize that
small businesses and individuals, sometimes operating in remote
locations, may have a more difficult time finding accredited continuing
broker education than individual brokers working in a larger entity in
a metropolitan area. Therefore, CBP will ensure that there is a central
location on CBP's website for individual brokers to access and find
qualified continuing broker education. Additionally, as discussed in
the comment response above, CBP will be offering enough free continuing
education courses in the form of online modules and in-person events to
cover the required 36 continuing education credits in a triennial
period.
Comment: Multiple commenters expressed concern that CBP may be
creating a conflict of interest in setting continuing broker education
requirements that would benefit CBP as an entity offering continuing
broker education, may disadvantage other education providers, create a
CBP education monopoly, or allow CBP to create a private education
monopoly.
Response: CBP disagrees that it is creating a conflict of interest
that would benefit CBP. The new requirements will give individual
brokers significant flexibility on how to meet the continuing broker
education requirement. CBP intends for individual brokers to have
access to a wide range of private- and public-offered qualified
continuing broker education. CBP has provided free, online, education
modules and in-person workshops to customs brokers, importers, and
other members of the trade community for many years. The modules and
workshops are designed to inform participants about practices and
procedures when conducting customs business and provide updates to
laws, regulations, and policies. CBP will continue to produce and
disseminate the modules and workshops because doing so ensures that the
trade community is aware of the most important changes or updates. More
importantly, CBP will continue to offer the modules for free so that
individual brokers have a baseline option to satisfy their continuing
broker education requirement that will not allow the formation of a
private continuing broker education monopoly and will ensure that CBP
does not financially profit from instituting a continuing broker
education requirement. CBP will work closely with CBP-selected
accreditors to create standards that ensure robust and diverse private
sector education offerings exist for individual brokers to access.
Comment: Two commenters requested that qualified continuing broker
education be administered by a government entity and stated that it
should not be outsourced to any private parties.
Response: CBP disagrees as it does not have the resource
capabilities to create or administer all trainings or educational
activities, nor does it have the capacity to vet or accredit every
potentially valid training or educational
[[Page 41228]]
activity that could arise. As mentioned throughout this document, CBP
believes a continuing broker education requirement will substantially
benefit CBP, importers, exporters, customs brokers, and the trade
community in general. CBP intends the continuing broker education
requirement to be as attainable and as flexible as possible for
individual brokers. Therefore, CBP has determined that a private sector
continuing broker education option needs to exist, and that option
needs to contain certain safeguards, explained elsewhere in this
document, which guarantee individual brokers are receiving the
requisite level of quality in the private sector offerings. However,
CBP understands the commenter's concerns and believes that, by
providing enough CBP-identified, free qualified continuing broker
education alternatives, individual brokers will have the flexibility
and alternatives that allow the individual broker to complete the
continuing broker education requirement in a manner and at a cost that
suits his or her individual needs.
Comment: One commenter requested that the continuing broker
education framework include fewer participating entities to allow for
easier implementation and to avoid overwhelming or confusing individual
brokers.
Response: CBP disagrees that the number of participating entities
should be limited. The continuing broker education program will involve
as many parties as are necessary to provide individual brokers with a
wide range of trainings, educational activities, and topics, while
still being a manageable program. CBP believes individual broker
confusion will be minimized by allowing an individual broker to certify
that he or she has completed the continuing broker education
requirement with the filing of the triennial status report and by
allowing an individual broker to maintain his or her own records.
Comment: One commenter asked CBP to hold monthly meetings in person
or virtually with a uniform format to meet the continuing broker
education requirement rather than the proposed process.
Response: CBP already holds regular information sessions, local
industry days, and conference calls to inform the trade community of
changes in trade law, regulations, procedures, etc. However, CBP has
found attendance to be sub-optimal and believes mandating attendance at
such sessions would not provide individual brokers enough flexibility.
CBP recognizes that many individual brokers specialize in certain
areas, and not every topic or new development is equally important to
every individual broker. As such, CBP has determined that the best
approach to guarantee an informed customs broker community is to allow
an individual broker to choose the topics he or she believes will help
him or her stay current, informed, and effective in his or her practice
area.
B. Certification Dates
In the NPRM, CBP proposed that individual brokers be required to
certify, with the filing of their triennial status reports, pursuant to
19 U.S.C. 1641(g) and 19 CFR 111.30(d), the completion of 36 continuing
education credits of qualified continuing broker education over the
prior three years. Multiple commenters expressed concern or sought
clarification regarding the requirement's initial and ongoing
certification date.
Comment: Two commenters sought clarification concerning the start
and end dates of the three-year triennial period as it relates to the
continuing broker education requirement. Specifically, the commenters
sought clarification concerning the interaction between the end of a
continuing broker education cycle and the triennial reporting period.
One commenter suggested new dates for the continuing broker education
cycle to better accommodate early filing of the triennial status
report. One commenter suggested that CBP consider allowing brokers who
exceed the 36-hour requirement for one triennial period to carry over
and apply a limited number of continuing education credits to the
subsequent triennial period.
Response: CBP appreciates the opportunity to clarify. The timeline
for triennial status reporting is prescribed by 19 U.S.C. 1641(g).
Every three years after 1985 is a reporting year and a triennial status
report is due on February 1st of the reporting year (the triennial
reporting period). However, 19 U.S.C. 1641(g)(2) provides that a
customs broker license is suspended only when a customs broker fails to
file the required triennial status report by March 1st of the reporting
year. CBP allows licensed customs brokers to file triennial status
reports over a multi-month period, starting mid-December on a date
announced on CBP's website and ending on the last day of February of
the reporting year. CBP determined that requiring individual brokers to
certify completion of continuing broker education requirements at the
same time as filing the triennial status report would significantly
simplify and alleviate administrative reporting burdens on individual
brokers. CBP does not have discretion to adjust the triennial reporting
period. As such, the 36-month cycle of the continuing broker education
requirement will end on January 31st and begin on February 1st every
three years coinciding with the due date of the triennial status
report. That means participation in any qualified continuing broker
education on or before the last day of January, marking the end of a
triennial reporting period, can only count as qualified continuing
broker education for that cycle. Any participation in qualified
continuing broker education after the last day of January, marking the
end of a triennial reporting period, can only count as qualified
continuing broker education for the next three-year triennial reporting
period. Individual brokers may continue to file their triennial status
reports earlier than the due date but should be certain they have
completed 36 continuing education credits in the slightly shorter
timeframe. To respond to the last comment, CBP does not allow for
individual brokers to carry over any continuing education credits they
completed in one triennial period in excess of the 36-hour requirement
into the subsequent triennial period. This requirement is meant to
encourage individual brokers to maintain a current knowledge base by
completing training or educational activities within a three-year
period. Training or educational activities completed any time between
three to six years prior to the credit being applied to the next
triennial period would undercut that purpose.
Comment: Two commenters requested that CBP implement the continuing
broker education requirement with a delayed effective date. The
commenters highlighted that a continuing broker education requirement
is a significant change within the customs broker community and time
must be given for the accreditation process to progress so that enough
qualified trainings and educational activities are available for use by
individual brokers. Similarly, one commenter requested that CBP
establish an effective date that coincides with a complete triennial
reporting period.
Response: CBP agrees that time will be needed to set up the
accreditation process. In this final rule, the first triennial
reporting period that will require individual brokers to complete the
continuing broker education requirement will close on January 31, 2027
(with the triennial status report due on February 1, 2027). See 19
U.S.C. 1641(g). As such, CBP is modifying Sec. 111.101 by adding a
sentence to the
[[Page 41229]]
end of the section to make it clear that the requirement to certify
completion of the continuing broker education requirement will be with
the filing of the 2027 status report, and every status report
thereafter. Therefore, the first time at which individual brokers will
be required to certify completion of the continuing broker education
requirement will be with the filing of the 2027 triennial status
report. As discussed above, CBP will reduce the number of required
continuing education credits for the triennial period beginning on
February 1, 2024 and ending on January 31, 2027 by six credit hours for
approximately every six month that elapse between February 1, 2024 and
the compliance date on which individual brokers may begin meeting the
requirement, as announced in a Federal Register notice following the
publication of this final rule. Following the 2027 triennial status
report, individual brokers will be required to certify completion of
the 36-credit continuing broker education requirement with every
triennial status report, unless an exception applies as outlined in
Sec. 111.102(a).
C. Individuals to Whom the Requirement Applies
In the NPRM, CBP proposed a continuing broker education requirement
that applies to all individual brokers. CBP proposed that individual
brokers who voluntarily suspended their licenses, under 19 CFR 111.52,
and individual brokers who have not held their licenses for an entire
triennial period, be excepted from the requirement. Multiple comments
were received regarding the scope of the continuing broker education
requirement, including to whom the requirement would apply.
Comment: One commenter requested that the continuing broker
education requirement not extend to those who are working at a
brokerage firm or company because the person practices with customs
rulings every day.
Response: CBP disagrees because individual brokers working in a
brokerage firm or company do not transact customs business differently,
for the purposes of the continuing broker education requirement, from
other individual brokers to warrant different treatment. Individuals
transacting customs business are required to have a license unless
specifically excepted. See 19 CFR 111.2(a). Any individual holding an
active customs broker license will be required to certify completion of
the continuing broker education requirement when submitting his or her
triennial status report, with two limited caveats. Those caveats are:
if an individual has not held his or her license for an entire
triennial period or if an individual license is voluntarily suspended.
If an individual has not held an active customs broker license for an
entire triennial period or is reactivating a license that was
voluntarily suspended, then that person is required to complete a
prorated version of the requirement. In these two scenarios, the
required number of continuing education credits that an individual
broker must complete will be calculated on a prorated basis of one
continuing education credit for each complete remaining month until the
end of the triennial period. See 19 CFR 111.102(b). Furthermore, the
continuing broker education requirement is not linked to the nature of
the customs business the individual transacts. Individual brokers have
different experiences, specializations, knowledge bases, and day-to-day
interactions with customs business. Differentiating among individual
brokers based on things such as experience, employer, or specialization
would be unworkable and controversial. CBP believes the only fair and
consistent way to implement the continuing broker education requirement
is to apply the same requirement to all individual brokers.
Comment: One commenter requested that CBP exempt individual brokers
from the requirement if the licensee is not actively engaged in customs
business.
Response: CBP has determined that an individual holding an active
license is the most fair and administrable distinction to determine
whether an individual must complete qualified continuing broker
education. In the NPRM, CBP explicitly stated that all individual
brokers are required to complete the same continuing broker education
requirement due to the complex and evolving realm of international
trade. As mentioned above, on October 18, 2022, CBP published a final
rule entitled ``Modernization of the Customs Broker Regulations,'' in
the Federal Register, which substantially rewrote certain provisions of
part 111 of title 19 of the CFR and made certain changes to 19 CFR
111.30. As such, in this document, CBP has made technical and
conforming changes to 19 CFR 111.30(d) while maintaining the original
intent of the NPRM to apply the continuing broker education requirement
to all individual brokers. CBP, through the Part 111 Rewrite, does
recognize a difference, under 19 CFR 111.30, between the contents
required in a triennial status report submitted by individual brokers
``actively engaged in transacting business as a broker'' and brokers
who are ``not actively engaged in transacting business as a broker.''
However, filing a triennial status report is required for non-active
individual brokers and the continuing broker education requirement will
be as well. CBP intends for all individual brokers to be current in
their knowledge of transacting customs business and to complete the
same continuing broker education requirement. Even brokers who are not
actively engaged in transacting business as a broker might nonetheless
be leveraging their broker license in other ways, for example, as an
employee of a company or as a consultant. Furthermore, a broker could
become active at any point in time from a period of inactivity and such
brokers must then meet the same levels of professionalism and knowledge
as any other broker who has been actively engaged in transacting
business. Lastly, if a broker expects to not actively engage in
transacting business as a broker for a longer period of time, then that
broker could have his or her license voluntarily suspended in
accordance with 19 CFR 111.52, and thereby, not be subject to the
broker continuing education requirement during the period of voluntary
suspension.
Comment: One commenter asked CBP to extend the continuing broker
education requirement to an importer or exporter who transacts customs
business solely on his or her own account.
Response: CBP disagrees with the request because those individuals
do not need a customs broker license as they are not transacting
customs business on behalf of others. CBP wants to ensure that licensed
individual brokers who handle business on behalf of others and are paid
for those services are knowledgeable and informed about the applicable
laws and regulations in order to provide high quality service to their
clients. CBP has consistently recognized that certain limited
circumstances and certain specific individuals performing customs
business do not require a license. See 19 CFR 111.2(a)(2). This final
rule does not change the nature of, nor the reason for, those
exceptions.
Comment: One commenter requested that the continuing broker
education requirement extend to CBP Officers and personnel.
Response: CBP disagrees with this request because it is
unnecessary. The duties and responsibilities of CBP Officers and
personnel are significantly different from those of individual
[[Page 41230]]
brokers. The continuing broker education requirement is designed to
address the needs, value, and credibility of individual brokers. This
continuing broker education requirement is not designed for any other
professional service involved in transacting customs business. It
should be noted that CBP Officers and personnel do receive regular
training to address their dynamic environments as well as to conduct
compliance and enforcement activities related to new laws, regulations,
and policies.
D. Completing the 36 Continuing Education Credits
In the NPRM, CBP proposed that individual brokers complete 36
continuing education credits of qualified continuing broker education
over the three years of a triennial period. CBP also created a
definition for continuing education credit. CBP received many comments
regarding the definition of continuing education credit and hours
required.
Comment: Many commenters expressed agreement with CBP that 36
continuing education credits of qualifying continuing broker education
each triennial period is a reasonable and attainable requirement.
Response: CBP agrees and notes that 36 continuing education credits
over three years is easily prorated as circumstances dictate. For
individual brokers, one credit per month should be easy to track and
provide sufficient time to identify qualified continuing broker
education opportunities capable of meeting the requirement.
Comment: One commenter felt that 36 continuing education credits
should be required annually and not per every triennial period.
Response: CBP disagrees with this commenter because requiring 36
credits of continuing broker education every triennial period is
attainable and easily prorated when necessary. CBP believes that
requiring significantly more continuing education credit in an annual
or triennial period would significantly increase the burden of the
continuing broker education requirement on all individual brokers and
may increase non-compliance with the requirement. CBP does not intend
to create a new barrier for individuals seeking or maintaining a
customs broker license that outweighs the benefits of continuing broker
education.
Comment: One commenter requested that small businesses or
businesses with under 10 employees be required to complete fewer
continuing broker education credits, such as 24 credit hours.
Response: CBP disagrees with this request to lower the number of
credit hours. Requiring the same number of credit hours ensure fairness
and a similar level of education for all brokers. Furthermore, CBP has
assessed the effect of this final rule on small businesses, which may
be reviewed below in Section V, Statutory and Regulatory Requirements.
CBP has determined that there would not be a significant economic
impact on small businesses. CBP believes that completing 36 continuing
education credits over the span of three years will not be a
significant hurdle for individual brokers or the businesses with which
they are associated, regardless of the business size, especially given
the availability of low-cost or free options.
Comment: Many commenters requested that CBP recognize the smallest
unit of continuing broker education credit as a 30-minute half credit
due to the frequency of trainings and educational activities offered
for this length of time.
Response: CBP agrees and has adopted this suggestion in the final
rule by revising the definition of continuing education credit found in
the proposed amendments to Sec. 111.1. The NPRM had proposed that the
first continuing education credit provided by a qualified continuing
broker education provider must be one hour of continuous participation
in the activity and additional half credits would be approved for each
30 minutes of continuous participation in continuing education
thereafter. In this final rule, qualified continuing broker education
may award half a credit for 30 minutes of continuous participation and
an additional half a credit for each full 30 minutes of continuous
participation in continuing education thereafter. CBP believes
individual brokers should have the maximum flexibility to complete the
continuing broker education requirement. Allowing half credit trainings
or educational activities provides for more specialization of topics
and more diversity among qualified continuing broker education
opportunities available to individual brokers. In addition, CBP
modified the proposed language in Sec. 111.103(b)(1) to allow
instructors, discussion leaders, and speakers to claim half of one
continuing education credit for each full 30 minutes spent on
presenting or preparing for a presentation at a training or educational
activity as described in Sec. 111.103(a)(2)(i) and (ii).
Comment: Many commenters requested that CBP award one full credit
for every fifty-five (55) minutes of continuing broker education to
allow for breaks, technical issues, etc.
Response: CBP understands the sentiment and logic behind accounting
for variance, but believes the issue is better addressed outside of
regulation. For the sake of simplicity and clarity, one credit of
qualifying continuing education must come from a training or
educational activity that adds up to one continuous hour in length (the
time could be one full continuous hour or two full continuous 30-minute
segments). CBP recognizes that variances will always exist in how a
presenter performs, how much the audience participates, how a
participant clicks through an online module, etc. The existence of
those variances is one of the many reasons CBP is requiring that
qualifying continuing broker education be accredited. Accreditation
allows standardization of how many continuing education credits are
rewarded from any given activity and will allow for technical
difficulties, breaks, etc., to be accounted for and measured
consistently. The number of continuing education credits assigned to
government-offered trainings and educational activities will follow the
same standards as those for accreditation.
Comment: One commenter noted that eligibility on receiving
education credits should be based on the amount of time designated for
the material rather than the minutes of continuous participation.
Response: CBP disagrees as each qualified continuing education
activity will provide continuing education credit based on the
predetermined amount of continuous participation required to complete
the training or educational activity. The actual amount of continuous
participation that a specific individual broker takes is not relevant
to the calculation. Basically, qualified continuing broker education
will have a specific number of continuing education credits assigned
based on a determination of the number of continuous 30-minute
participation segments required to complete the activity. Activity
extending over 30 minutes must have another 30 minutes of continuous
participation (totaling one hour of continuous participation) to then
count as one continuing education credit and the calculation continues
for longer continuing broker education. However, a training or
educational activity requiring 45 minutes of continuous participation
will only count for half a continuing education credit. Time spent
allowing for breaks, pauses, technical issues, excess time answering
questions, etc., will not adjust the quantity of continuing
[[Page 41231]]
education credits that an activity will provide. CBP or CBP-selected
accreditors will pre-approve the continuing education credit for all
qualified continuing broker education. Individual brokers will know the
number of continuing education credits before participating in an
activity.
Comment: Multiple commenters highlighted the private sector
Certified Customs Specialist (CCS) designation/certification and
continuing education program. The commenters specifically asked whether
the CCS certification and continued maintenance of the certification
would qualify brokers as having met the 36 continuing education credits
required in a triennial reporting period for the continuing broker
education requirement.
Response: Until CBP selects accreditors, CBP cannot say for certain
whether the education requirement for a CCS certification will meet the
continuing broker education requirement of this final rule. CBP has not
evaluated the specific training materials required or ``continuing
education units'' (CEU) required to attain the CCS certification. In
accordance with this final rule, only qualified trainings or
educational activities will provide individual brokers with continuing
education credit. As of now, there are no qualified trainings or
educational activities because CBP has not identified nor have any CBP-
selected accreditors accredited any trainings or educational
activities. However, CBP envisions future accreditors will likely
determine that trainings and educational activities designed for CCS
certification and CEUs will qualify as continuing broker education
under Sec. 111.103, given the history of this certificate program and
its reputation in the brokerage community. See the economic analysis
presented below in Section V, Statutory and Regulatory Requirements.
Comment: One commenter noted that an individual broker should be
allowed to choose which specific trainings to attend based on his or
her specific needs and general business environment.
Response: CBP agrees that individual brokers should be allowed to
choose trainings to attend based on their specific needs. The
continuing broker education requirement was designed to provide
individual brokers the maximum flexibility to complete the requirement
from qualified sources. These regulations do not require individual
brokers to fill the 36 continuing education credits with specific
trainings or educational activities, such as ethics trainings.
Individual brokers are encouraged to seek the trainings, educational
activity, and topics that best suit their needs during each triennial
period. Furthermore, the 36 continuing education credits can be
completed at any time during the triennial period.
E. Recordkeeping
In the NPRM, to comply with the continuing broker education
requirement, individual brokers must certify completion of 36
continuing education credits at the time of filing their triennial
status report and must maintain certain records of the qualified
continuing broker education completed for three years after certifying
completion and make those records available to CBP upon request. In
proposed Sec. 111.02, CBP also proposed the minimum data elements
required to appear in the maintained records concerning each qualified
training or educational activity completed. CBP received multiple
comments regarding recordkeeping requirements and procedures.
Comment: One commenter requested that CBP should consider
alternatives to the proposed recordkeeping requirements and allow for
an individual broker to be able to retain an extract of completed
coursework from an employer's learning management system.
Response: CBP agrees with the commenter and the regulations will
allow individual brokers such flexibility regarding the location where
records may be stored. Individual brokers will be in compliance with
the recordkeeping requirement so long as the broker's records meet the
criteria of Sec. 111.102(d)(1), and the individual broker is capable
of producing the records in a timely manner if requested by CBP. The
customs broker license is held by the individual and the responsibility
to maintain the license requirements rests with the individual broker.
The requirements in Sec. 111.102(d) are designed to provide individual
brokers with the flexibility to maintain their continuing broker
education records in a manner best suited for them. If an individual
broker chooses to maintain all or some of his or her records within an
employer's learning management system that is his or her prerogative,
but nonetheless the individual broker remains responsible for
recordkeeping requirements.
Comment: Multiple commenters requested that CBP should recognize a
transcript or similar electronic certification as encompassing all the
essential information for recordkeeping requirements. Additionally, one
commenter requested that records that are kept in the normal course of
business should meet the standard for required documentation or that
CBP should not require a specific form or format.
Response: CBP agrees with the commenters and intends for individual
brokers to have such flexibility maintaining the records of the
continuing broker education credits in whatever format is convenient
for the individual broker. For that reason, proposed Sec. 111.102(d)
had been written to be very general and this final rule adopts the
proposed language. If an individual broker's records are complete,
contain 36 continuing education credits in a triennial period, and each
credit can be connected to the six criteria (Sec. 111.102(d)(1)(i-
vi)), the individual broker will be in compliance. The record may be
either physical or electronic and evidentiary documentation of activity
or training completion may be physical or electronic. A transcript or
similar electronic certification will suffice and, CBP anticipates the
identification and accreditation processes will ensure qualifying
trainings and educational activities provide individual brokers with
the necessary information and documentation of completion meeting the
requirements of Sec. 111.102(d). However, it will be incumbent on an
individual broker to maintain his or her records in a form that allows
the individual broker to easily and timely respond to CBP record
requests.
Comment: One commenter sought greater clarity concerning how
individual brokers will be able to prove completion of government-
created continuing broker education trainings or educational activity.
Response: As explained elsewhere in this preamble, CBP is working
with Partner Government Agencies (PGAs) to identify specific
government-provided online modules and in-person activities that are
relevant to customs business as qualifying continuing broker education.
CBP will assign the appropriate continuing education credit to the
qualified continuing broker education. CBP will work with PGAs to
provide information or a record, upon training or activity completion,
to individual brokers to satisfy the requirements of Sec.
111.102(d)(1)(i-vi). However, the exact format of the provided record
will be determined after CBP has selected accreditors and leveraged
their expertise to create consistency for individual brokers between
private and public offerings. CBP will provide additional information
on its website, <a href="http://CBP.gov">CBP.gov</a>, in the future.
[[Page 41232]]
Comment: One commenter recommended that recordkeeping requirements
should be extended to all accredited entities providing continuing
education for individual brokers so that individual brokers can rely
upon the continuing education organization to provide a record directly
to CBP.
Response: CBP disagrees because records held by providers of
accredited trainings and educational activities will not produce data
that is easily usable by CBP nor is such a system helpful to individual
brokers to ensure that the required number of credits has been
completed. Simply put, records maintained by providers of accredited
continuing broker education will only demonstrate which individuals
attended the provider's specific trainings and educational activities.
That data is only useful when reorganized and collated with data from
other providers and individual brokers. Such a system is highly
susceptible to failure, and the failure would generally fall outside
the control of individual brokers even though the individual brokers
have the duty to complete the requirement. The chosen recordkeeping
requirements place the responsibility of recordkeeping on the
individual broker, who is in the best position to maintain the records.
Comment: One commenter requested that CBP develop an online
reporting portal. Similarly, another commenter asked CBP to develop a
means of tracking verifiable continuing education credits through the
Automated Commercial Environment (ACE) system.
Response: CBP disagrees as it cannot commit to the development of a
tracking tool on <a href="http://CBP.gov">CBP.gov</a> or through ACE. CBP may pursue developing an
online reporting/ACE tracking tool, but the development of this tool
will be dependent on resources and CBP priorities. For that reason, CBP
has made the requirements of Sec. 111.102(d) very general and flexible
for individual brokers to meet. CBP does anticipate individual brokers
will only need to check a box certifying completion of 36 continuing
education credits when filing their triennial status reports in the
electronic Customs and Border Protection (eCBP) Portal.\9\
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\9\ The eCBP Portal and additional information may be accessed
through <a href="https://e.cbp.dhs.gov/ecbp/#/main">https://e.cbp.dhs.gov/ecbp/#/main</a>.
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Comment: One commenter mentioned that a CCS certificate presented
to the individual broker should satisfy the recordkeeping requirement.
The commenter also asserted that the CCS certificate should suffice as
proof of completing the continuing broker education requirement and
obviate the need to keep individualized records of each activity
completed.
Response: CBP understands the commenter's concerns, however,
neither CBP nor a CBP-selected accreditor has formally evaluated
whether documents demonstrating CCS certification meet the continuing
education requirements. Without formal evaluation, the CCS
certification cannot be used to meet the requirements. The
recordkeeping requirement in Sec. 111.102(d) requires the individual
brokers to maintain a record that states the title, provider, date,
credits, and location of accredited activity completed, along with
documentary evidence of an individual ``broker's registration for,
attendance at, completion of, or other activity bearing upon the
individual broker's participation in and completion of the qualifying
continuing broker education.''
Comment: Two commenters noted confusion concerning proposed Sec.
111.102(d)(1)(v), regarding the requirement to maintain documentation
pertaining to the location of the training or educational activity, and
the paragraph's interaction with training done via webinars or other
online courses.
Response: Proposed Sec. 111.102(d)(1)(v) requires that records be
maintained as to ``[t]he location of the training or educational
activity, if the training or educational activity is offered in
person.'' To clarify that CBP does not differentiate between in-person
and online training or educational activity, CBP slightly revised the
proposed provision to require that the record include the location of
the qualifying continuing education. For trainings or educational
activity offered electronically, such as via webinar or online course,
the individual broker may simply record the location of the activity as
``online.''
Comment: Two commenters sought additional information concerning
CBP requests for continuing education records under proposed Sec.
111.102(d)(2), including the time brokers will have to provide the
documentation, whether a set/standardized review will be conducted, and
whether the record request would be conducted onsite or electronically.
Additionally, many commenters requested that CBP should provide a
reasonable timeframe (such as 30 days) for submission of records,
particularly when requesting an in-person inspection, under proposed
Sec. 111.102(d)(2), in case the broker is away or unavailable.
Response: The focus of a record request is to ensure compliance
with the continuing broker education requirement by reviewing records
maintained in accordance with Sec. 111.102(d)(1). Individual brokers
must maintain those records in a manner that is capable of retrieval
under Sec. 111.102(d)(2). CBP recognizes the recordkeeping requirement
is new and will work closely with individual brokers to accommodate the
transition. CBP agrees that it is important for brokers to have a
reasonable timeframe in place for the submission of records upon
request, and thus, CBP added a 30-calendar day timeframe from the date
of receipt of CBP's record request in the first sentence of Sec.
111.102(d)(2), which is in accordance with general recordkeeping
requirements in 19 CFR part 163. As with other broker matters, CBP will
work with the individual broker to ensure production of the records
requested in a manner and timeframe that is feasible for CBP and the
individual broker.
F. CBP-Selected Accreditors
In the NPRM, CBP proposed that qualified continuing broker
education must either be created by the government or accredited by a
CBP-selected accreditor. CBP also outlined the process for selecting
accreditors and the responsibilities of CBP-selected accreditors. CBP
received comments regarding the selection criteria and process for
selecting accreditors.
Comment: One commenter requested that CBP become an accreditor
because it would give CBP the ability to monitor the training that
individual brokers are receiving, provide for a cost-efficient
accreditation process, and provide individual brokers with a secure
accreditor to prevent disclosures of confidential business processes.
Response: CBP disagrees as CBP believes a public-private
partnership is necessary to ensure the best qualified continuing broker
education opportunities for individual brokers. CBP will select
accreditors and the process will provide CBP with a sufficient window
into the types of trainings and educational activities receiving
accreditation. Additionally, CBP will institute a framework for the
trade community to inform CBP of issues or make suggestions concerning
continuing broker education. Furthermore, CBP does not have the
capacity to vet all potential trainings and educational activity for
accreditation, which would likely occur if CBP were to act as a ``cost-
efficient'' accreditor alternative. Finally, the limitations and
requirements placed on parties to maintain their accreditor status will
prevent disclosure of
[[Page 41233]]
confidential business processes. As such, CBP needs to ensure there is
room in the continuing broker education process for private parties to
operate.
Comment: Multiple commenters expressed the belief that CBP's
proposed selection of accreditors through SAM would be too cumbersome
and time-consuming due to additional and more detailed technical
requirements. The commenters also requested that CBP adopt a
streamlined accreditation process akin to that used for commercial
laboratories that are approved by CBP.
Response: CBP disagrees that the SAM process would be too
cumbersome. SAM is familiar to the public and its use is appropriate in
this circumstance. CBP has determined that selection of accreditors
will require a contracting-type process. All potential accreditors must
be afforded the same access and same opportunity to present their
credentials. The system for accrediting commercial laboratories is very
involved (including site visits), specific to the unique requirements
placed on laboratories addressing concerns about human health and
safety and is unnecessary in these circumstances. CBP will only be
vetting parties for their capabilities to be accreditors and ensure
those selected parties understand the standards for qualified
continuing broker education. The accreditation process, discussed above
in Section I, requires response to an RFI and RFP, which will produce a
binding agreement between the selected party and CBP. The RFI and RFP
process will ensure a more dynamic and responsive vetting process and
produce a diverse pool of accreditors.
Comment: One commenter requested that if an applicant's proposal to
be an accreditor is deficient for any reason, or if CBP intends to deny
the proposal, that the applicant be advised in writing of any
deficiency and provided with a reasonable opportunity to amend the
proposal.
Response: In accordance with Sec. 111.103(c), the application
process to be an accreditor will be conducted via SAM following the
announcement of an RFI and an RFP. The normal process for responding to
RFIs and RFPs will apply. All parties desiring to participate as an
accreditor should carefully review the RFIs and RFPs and carefully
respond to the instructions of the RFIs and RFPs.
Comment: Multiple commenters requested that certain specific
parties be automatically recognized as accrediting organizations
without CBP selection, and that this designation should continue
indefinitely unless complaints are filed, and a study shows that the
party has not fulfilled its obligations as an accreditor.
Response: CBP disagrees with these comments. No private party will
simply be designated as an accreditor without any review process. All
parties wishing to be an accreditor will have the same opportunity to
submit proposals and demonstrate their credentials.
Comment: One commenter noted the importance of having a transparent
application process with multiple approved accreditors and agreed that
CBP-selected accreditors should be required to renew their accreditor
statuses on a periodic basis.
Response: CBP agrees and intends for the RFI and RFP process to be
transparent and produce multiple qualified accreditors. CBP anticipates
that the accreditation process will require adjustment over time to
address standards, add new accreditors, address substandard
accreditors, etc. As such, CBP will have accreditor status sunset and
publish new RFIs and RFPs to select new accreditors as circumstances
require. The first set of CBP-selected accreditors will be approved for
three years.
Comment: One commenter requested that the term of third-party
accreditors be extended to six years from the date of approval.
Response: CBP disagrees because the continuing broker education
requirement is new, and the public-private partnership envisioned to
designate accredited continuing broker education for individual brokers
needs flexibility and a period of applied learning. The period of award
must be the same for all parties selected, it must provide enough time
for the selected accreditors to establish their systems, it must be
short enough to allow new interested parties to enter without waiting
too long, and it must be long enough to allow selected parties to
accredit sufficient trainings and educational activities. CBP has
determined three years is an appropriate period of time and allows CBP
to ensure that the accreditor selection process does not interfere with
the close of a triennial period. CBP may adjust the contracted period
in future RFIs and RFPs as circumstances and hindsight dictate the best
practice.
Comment: Two commenters requested that CBP include specific
criteria in proposed Sec. 111.103 that describes required criteria for
accreditors.
Response: CBP disagrees with these commenters and will not add
criteria to the regulations at this time. There will be criteria for
vetting the proposals received in accordance with Sec. 111.103(c).
However, CBP anticipates the criteria will change as CBP makes the
first selection of accreditors and then evaluates the outcomes.
Therefore, including accreditor criteria in CBP's regulations would be
too restrictive at this juncture. The accreditor criteria will be
outlined in the RFP issued to solicit potential accreditors, and the
RFP is a public document that any party can review.\10\
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\10\ RFPs may be viewed by the public online at <a href="http://www.sam.gov">www.sam.gov</a>.
---------------------------------------------------------------------------
Comment: One commenter requested that the employment of a licensed
broker be treated as a factor, but not a requirement, to becoming an
accreditor.
Response: CBP disagrees with the commenter, as a licensed broker
has passed the exam and has the requisite knowledge to vet trainings
and educational activities. CBP believes that parties without a
licensed customs broker on staff will have problems vetting trainings
and educational activities and may accredit inferior continuing broker
education. CBP is cognizant that individual brokers deserve qualified
continuing broker education that is useful and accurate. The best way
to ensure that accredited trainings and educational activities meet
minimum standards is to have the continuing education vetted by
licensed customs brokers. As such, and as stated in the NPRM,
employment of a licensed customs broker will be a requirement for a
party to be an accreditor. CBP may adjust this requirement in future
RFIs and RFPs as circumstances dictate.
Comment: Multiple commenters expressed concern about non-
governmental accreditors receiving access to confidential business
procedures that a business would not want shared with its competitors.
Response: CBP appreciates this concern and notes that business
procedures are not necessarily outside the scope of continuing broker
education if they relate to transacting customs business. However, CBP
believes protections related to confidentiality are not appropriate for
this regulation and better addressed in the RFPs and in limitations and
security expectations placed on accreditors selected by CBP as a
requirement/condition to maintain their accreditor status.
G. Qualified Continuing Broker Education
In the NPRM, CBP proposed basic standards for trainings and
educational activities to qualify as continuing broker education and
provide individual brokers with continuing education credit. CBP also
proposed specific
[[Page 41234]]
allowances for instructors, discussion leaders, and speakers to receive
limited continuing education credit. CBP received multiple comments
regarding the validity and type of trainings and educational activities
available.
Comment: Multiple commenters specifically requested information on
how an individual interested in continuing broker education will be
able to identify appropriate courses or programs.
Response: Following publication of the Federal Register notice
announcing the availability of qualified continuing broker education
courses, CBP will publish the initial list of available qualified
continuing broker education opportunities on <a href="http://CBP.gov">CBP.gov</a>. Furthermore, CBP
will ensure there is a central location on <a href="http://CBP.gov">CBP.gov</a> that allows
individual brokers to identify and link to all available qualified
continuing broker education opportunities.
Comment: Two commenters requested additional information regarding
how individual brokers will be able to confirm the validity of any
accreditations that a continuing education provider claims to hold.
Response: CBP and the CBP-selected accreditor will not be
accrediting education providers but specific trainings and educational
activities. CBP anticipates individual brokers will have several ways
to determine what trainings and educational activities are accredited
and count for continuing education credit. First, CBP will announce
every party that is a CBP-selected accreditor, and the accreditor will
provide an open access list that tracks every training and educational
activity accredited by that accreditor. Second, CBP will maintain a
central location on <a href="http://CBP.gov">CBP.gov</a> that lists the accreditors, provides links
to the accreditors' listings, and provides access to CBP and PGA
continuing broker education opportunities. CBP is exploring additional
avenues to inform brokers of available qualified continuing broker
education.
Comment: One commenter requested that CBP develop a web page on
<a href="http://CBP.gov">CBP.gov</a> listing all available qualifying training materials provided by
CBP and PGAs.
Response: CBP agrees and intends to do so after CBP has identified
a sufficient quantity of qualified trainings and educational activities
to include on <a href="http://CBP.gov">CBP.gov</a>. The specific page will be announced at a later
date.
Comment: One commenter requested that public meetings, webinars,
and other activities, hosted by CBP, be clearly identified as
qualifying or not qualifying for continuing education credit.
Response: CBP agrees that qualifying events hosted by CBP should be
clearly identified. The NPRM had proposed that all CBP and other PGA
trainings and educational activities relevant to customs business would
be qualified continuing broker education. In this final rule, CBP is
modifying proposed Sec. 111.103(a)(1)(i) to explicitly state that CBP
will identify when a government-offered training or educational
activity is related to customs business and qualified continuing broker
education. This modification will ensure that individual brokers will
be directly informed of when they will receive continuing education
credit from government offerings and avoid confusion concerning what
qualifies or require individual brokers to parse the scope of
``relevant to customs business'' on their own. After consultation with
the relevant PGA, CBP will identify and collect all existing CBP and
PGA trainings and educational activities into one online location with
specific details concerning the number of continuing education credits
assigned to each. Furthermore, CBP will clearly identify what future
events qualify as continuing broker education and the continuing
education credits connected to the events.
Comment: Multiple commenters stated that continuing broker
education should not be limited to customs business in the narrow sense
and should involve the full range of PGAs with border clearance
responsibilities.
Response: CBP agrees with the commenters in principle. CBP intends
for the continuing broker education requirement to be flexible and
relevant to individual brokers. CBP recognizes that transacting customs
business can cross many issue areas and involve statutes, regulations,
policies, and procedures of governing agencies besides CBP. As such,
CBP has modified proposed Sec. 111.103 such that, ``training or
educational activity offered by another U.S. government agency'' will
qualify as continuing broker education as long as ``the content is
relevant to customs business as identified by CBP in coordination with
the appropriate U.S. government agency when applicable.'' CBP believes
``relevant to customs business'' provides CBP the ability to ensure
individual brokers will have access to a wide variety of education
topics that cover the range of Trade issues involving other government
agencies. As previously noted and in Section II, for the sake of
clarity, CBP will clearly identify the government-offered trainings and
educational activity, in coordination with PGAs when applicable, that
qualify as continuing broker education.
Comment: One commenter requested additional guidance concerning the
specific training and educational activities that CBP will accept from
other government agencies and provide a list of pre-approved programs
from other government agencies.
Response: CBP cannot at this point provide additional guidance
concerning the specific PGA trainings or educational activities that
will qualify as continuing broker education. CBP is working with PGAs
to determine what trainings and educational activities exist, what
should be identified as qualified continuing broker education, and the
number of continuing education credits assignable to each. CBP will
provide individual brokers with a list of qualified PGA and CBP
offerings in an online format. CBP will update the list as new PGA and
CBP trainings and educational activities are available and identified
by CBP as relevant to customs business.
Comment: Multiple commenters sought clarification concerning the
cost and credit hours of qualified continuing broker education offered
by CBP or PGAs.
Response: Nearly all CBP and PGA-offered trainings and educational
activities that will be eligible for continuing broker education credit
will, as they are now, be offered at no cost to interested
participants. The number of continuing education credits associated
with any given training or educational activity will depend upon the
same criteria dictating continuing education credit assigned by
accreditors. Additionally, CBP believes, based on existing modules,
planned modules, and regularly scheduled events, that CBP will provide
individual brokers enough qualified continuing broker education that
they will be able to fulfill the continuing broker education
requirement from the CBP and PGA offerings alone.
Comment: Two commenters requested further information as to the
meaning of qualifying education. The first commenter requested that CBP
adopt a clear set of guidelines as to what constitutes education,
potentially including practical case studies and a list of overarching
trade topics and aspects of professional development, and second
commenter requested that CBP adopt a more specific definition of
training and educational activities.
Response: CBP disagrees with the comments requesting that CBP
establish a more specific definition and guidelines as to what
constitutes
[[Page 41235]]
education. CBP recognizes that flexibility is necessary in this field
to ensure that an adequate quantity and the best quality of qualified
continuing broker education is available for individual brokers. At
this time, a more precise definition, definitive guidelines, or lists
of what constitutes permissible trainings, educational activities, or
topics, more detailed than what appears in Sec. 111.103(a) is not
practical. CBP, in conjunction with the CBP-selected accreditors, will
establish standards and guidelines for continuing broker education. CBP
will provide further updates in the future.
Comment: Many commenters requested that CBP edit the language of
the requirements for recognized trainings or educational activities in
proposed Sec. 111.103(a)(2) because it does not allow for
``asynchronous delivery of on-line training'' or ``self-guided
learning'' which can be completed by students on a self-paced, anytime-
anywhere basis.
Response: CBP agrees with these comments and has always intended
for self-guided online modules to be viable sources of continuing
broker education credit because they represent a significant expansion
of the types of education available to individual brokers. The language
proposed in the NPRM does not explicitly prohibit self-guided online
modules, but the consistent confusion in the comments received has
demonstrated that an amendment and additional clarity is warranted. As
such, CBP has added a new subparagraph, Sec. 111.103(a)(2)(iii), to
explicitly allow for online training and educational activity, whether
live or self-guided, that culminates in a retention test. Accordingly,
CBP has also renumbered the other four categories and edited proposed
Sec. 111.103(a)(2)(i) so that it is clearly delineated from Sec.
111.103(a)(2)(iii), as trainings or educational activity that are led
or guided by another individual. This change will allow individual
brokers to engage in qualified self-guided learning that also
guarantees a minimum level of engagement from the participant.
Comment: One commenter sought clarification regarding whether
online training may be offered in a recorded format, i.e., given by a
speaker who records a script of accredited content.
Response: Online training may be offered in a recorded format if
the recording of the script has been approved for continuing education
credit by a CBP-selected accreditor. Simply recording an individual
reciting content that appears in a different accredited activity will
not suffice as continuing education on its own merits. The entire
recording must be submitted to a CBP-selected accreditor and
accredited. Further, proper documentation of the training must also be
available to make clear that the broker received the training from an
accredited source and that verifies proper completion of the course.
Comment: One commenter sought clarification regarding whether
online training may be in the form of a slide presentation of
accredited content.
Response: CBP agrees that online training may be in the form of
slides if the entire slide deck has been approved for continuing
education credit by a CBP-selected accreditor. Please note the changes
discussed above, and in Section II, concerning online self-guided
learning. Simply taking content or slides that appear in a different
accredited activity and combining them into a new presentation will not
suffice as continuing education on its own merits. The specific online
training must be submitted to a CBP-selected accreditor and accredited.
Comment: One commenter requested that qualified continuing broker
education should be permitted in either a classroom setting or online,
as long as such training is taught or overseen by a licensed customs
broker, a trade attorney, an experienced consultant, or a qualified
representative of CBP or any PGA.
Response: CBP disagrees with the commenter to the extent this
comment seeks an exemption from accreditation if the training is
provided by such private individuals. To the extent the commenter seeks
to restrict presentation of training to the listed persons, then CBP
disagrees with the comment because the request is unnecessarily
restrictive. If a training or educational activity qualifies as
continuing broker education under Sec. 111.103(a) then it will provide
continuing education credit upon completion. The identity of the
presenter, instructor, or other attendees is not relevant.
Comment: One commenter requested that CBP allow individual brokers
to earn continuing broker education credit for time spent publishing
subject matter for an accredited course even if the license holder
preparing the material is not an instructor, discussion leader, or
speaker.
Response: CBP disagrees with this comment because allowing credit
for publication would be unworkable and controversial. CBP does not
believe there is a consistent manner to determine how significant an
individual's engagement with material is when involved in the
publication of educational material. Furthermore, CBP believes that
determining when to allocate credits for publishing material would be
very controversial and difficult because trainings and educational
activities must be accredited before they may count as continuing
broker education credit. Certain individual brokers may rely upon
publication and then accreditation to meet their continuing broker
education requirements and fail to meet the 36 continuing education
credits required because an activity is not accredited or does not
provide enough credit. CBP believes clarity and consistency are
essential to allow individual brokers to meet this new requirement and,
therefore, no credit will be awarded for publishing education
materials.
Comment: Two commenters suggested that CBP reconsider its proposal
to prevent participation in various federal advisory committees from
counting as continuing education.
Response: CBP disagrees because participation in federal advisory
committee meetings is considered a privilege, and the meetings do not
serve an educational purpose. As stated in proposed Sec.
111.103(a)(2)(ii), meetings that are conducted in accordance with the
provisions of the Federal Advisory Committee Act, as amended (5 U.S.C.
App.) (FACA), are expressly excluded as qualified continuing broker
education. Individual brokers will not be permitted to claim continuing
education credit for their participation in committees, subcommittees,
workgroups, and any other group organized under the auspices of FACA,
including participating in public meetings. Instead, FACA meetings
serve to solicit advice from committee members and to receive input
from the public that may later form the basis for government decisions.
Not all activities relating to customs business qualify as education,
and participation in FACA meetings does not qualify as a training or an
educational activity.
Comment: One commenter requested that a company's in-house training
should not be an eligible option for continuing education credit,
whether approved by an accreditor or not.
Response: CBP disagrees with the commenter because declaring in-
house training as being unqualified to be continuing broker education
would not provide the flexibility to produce the best quality and
quantity of continuing broker education opportunities for individual
brokers. In-house training is also, presumably, intended to provide
individuals within the company the most relevant information on that
[[Page 41236]]
company's processes and best practices, something that is vital to a
business's viability and can be inextricably intertwined with
legitimate topics concerning transacting customs business. Greater
guidance, restrictions, or even liberalization of what constitutes
qualified continuing broker education will come after CBP has selected
accreditors and consulted with them on working guidelines for
accrediting continuing broker education.
Comment: One commenter sought clarification regarding whether the
presenter or speaker of accredited content is required to have certain
qualifications.
Response: CBP will not require that the presenter of an accredited
training or educational activity have any specific qualifications. CBP
does not require presenters of education material for the customs
broker exam to have specific qualifications and will not require such
qualifications for the presentation of continuing broker education.
H. The Accreditation Process
In the NPRM, CBP proposed regulations detailing the
responsibilities of CBP-selected accreditors. CBP also specified a
limitation on a CBP-selected accreditor's ability to accredit the
entity's own educational activity. CBP reviewed multiple comments
regarding the accreditation process.
Comment: Multiple commenters requested that educational activity
(membership meetings, seminars, etc.) offered by broker associations
should not require third-party accreditation.
Response: CBP disagrees because the continuing broker education
requirement is new, and no existing trainings or educational activities
have been developed with the specific needs of this requirement in
mind. Any training or educational activity, not offered by CBP or other
U.S. government agency, seeking to provide continuing education credit
must be accredited. If existing trainings or educational activities
qualify, based on their content and quality, then the activities will
receive accreditation.
Comment: Many commenters requested that a continuing broker
education program provider should have the option to apply for and
obtain accreditation after the training or educational activity is
provided.
Response: CBP disagrees because post-event accreditation could
produce unwelcome confusion. Individual brokers are entitled to
consistency and predictability when meeting the continuing broker
education requirement. When continuing broker education is completed,
the individual broker will know exactly how many continuing education
credits he or she earned. Allowing for trainings or educational
activities to be accredited after the event has occurred does not serve
that purpose and will create confusion. For example, if an individual
broker participates in a non-accredited training, believing it will
provide 1.5 credits just before the triennial status report is due, but
an accreditor approves the activity for 1 credit, then the licensed
customs broker has not completed the continuing broker education
requirement, through no fault of his or her own. However, the licensed
customs broker and CBP will be required to expend valuable time and
resources determining the correct number of continuing education
credits completed. Furthermore, CBP does not want to create a system
that allows for undue pressure to be placed on CBP-selected accreditors
to accredit trainings or educational activities because individual
brokers believed they would receive credit or a specific amount of
credit for attending or participating. As such, CBP will not allow
continuing education credit to extend to participation in a continuing
broker education program before the training or educational activity
was accredited.
Comment: Many commenters requested that providers of trainings and
educational activities should be permitted to request approval from an
additional accreditor if initially denied accreditation. The commenters
were concerned that an accreditor could deny an applicant's courses for
accreditation for competitive reasons or due to lack of familiarity
with a subject matter. One commenter asked that the applicant be
advised in writing of the reason(s) for denial of accreditation and
provided with a reasonable opportunity to amend the denied application
for accreditation.
Response: CBP agrees and always intended to allow applicants of
denied trainings and educational activities to either reapply for
accreditation or amend an original application. Further, accreditors
will provide the applicant seeking approval the reason(s) for the
denial of an accreditation of a course. Greater flexibility in the
accreditation process will produce better continuing broker education
options for individual brokers. CBP believes the accreditation process
will be dynamic and wants to ensure parties may re-submit trainings and
educational activities for vetting following a denial. As such, CBP has
made an amendment to the proposed regulations to guarantee clarity on
this topic. Specifically, CBP has edited proposed Sec. 111.103(d) to
explicitly prohibit CBP-selected accreditors from denying review or
approval of a training or educational activity for continuing education
credit solely because it was previously denied by the CBP-selected
accreditor or any other CBP-selected accreditor. CBP will address
specific processes and timeframes in the RFPs, however, CBP will not be
making definitive guidelines concerning accreditation standards at this
time. After selecting qualified accreditors, standard guidelines for
accreditation will be developed. CBP will provide additional
information in the future.
Comment: Two commenters requested that CBP allow a single
accreditation to apply to all programs/classes in a course or to allow
blanket accreditation.
Response: CBP disagrees with these comments as CBP cannot commit to
specific accreditation procedures at this time. CBP believes the
accreditation process will be flexible to allow greater quantity and
quality of continuing broker education opportunities. However, the
exact way potential continuing broker education is evaluated, whether
courses may be grouped or individually examined, how continuing
education credits will be assigned in a symposium or convention, etc.,
will be determined after CBP has selected qualified accreditors and
leveraged their expertise. CBP will provide additional information in
the future.
Comment: Many commenters requested that CBP should enable CBP-
selected accreditors to self-certify the party's own training and
educational activities.
Response: CBP disagrees because self-certification of an
accreditor's own trainings and educational activities is not viable.
CBP is not prohibiting CBP-selected accreditors from also producing
qualified continuing broker education. However, to limit the risk of
conflicts of interest and self-dealing, CBP must prohibit accreditors
from accrediting their own training and educational activities. CBP
would be doing a disservice to individual brokers if it selected
accreditors that devoted their time to accrediting their own trainings
and educational activities instead of vetting the trainings and
educational activities of other content providers. Individual brokers
deserve to have diverse continuing broker education. If a CBP-selected
accreditor's trainings and educational activities meet the standards
for accreditation, then a separate accreditor is just as capable of
reaching the same conclusion and accrediting. The guidelines and
standards for accrediting trainings and educational activities will be
[[Page 41237]]
determined after CBP has selected qualified accreditors and leveraged
their expertise. These standards will be followed by every CBP-selected
accreditor, as monitored by CBP. CBP will provide additional
information in the future.
Comment: One commenter specifically requested that brokerage firms,
regardless of their form, and broker associations should be able to
self-certify trainings or educational activities that they deliver in-
house or to their members.
Response: CBP disagrees with this comment as CBP will not allow
self-certification of trainings or educational activities, in any form,
to limit the risk of conflicts of interest and self-dealings.
Furthermore, a training or education activity will only provide
continuing education credit to an individual broker if it is accredited
by a CBP-selected accreditor or offered by CBP or another U.S.
government agency. The guidelines and standards for accrediting
trainings and educational activities can best be determined after CBP
has selected qualified accreditors and leveraged their expertise. CBP
will provide additional information in the future.
Comment: One commenter requested that the term of valid
accreditation for a training or educational activity be extended from
one year to two years under proposed Sec. 111.103(d). Another
commenter requested that the term of valid accreditation for a training
or educational activity be extended to no longer than three years.
Response: CBP disagrees with the commenters because CBP intends for
all qualified continuing broker education to stay current. One of the
major goals of the continuing broker education requirement is to ensure
individual brokers have the latest information to access and meet their
continuing education credit requirements. To that end, outdated
trainings or educational activities cannot be allowed to go unchanged
for years at a time with the potential to circulate outdated
information. CBP believes that requiring all accredited continuing
broker education to be reaccredited every year as specified in Sec.
111.103(d), is a small cost compared to the net benefit of ensuring
that the trainings and educational activities are reexamined for
inconsistencies or updated with new information. If details on a
specific topic have not changed, then the training or educational
activity will likely receive reapproval.
I. Enforcement
In the NPRM, CBP proposed specific consequences for an individual
broker who fails to certify completion of his or her continuing broker
education. CBP also outlined immediate steps that may be taken by the
individual broker to return his or her license to good standing. CBP
received several comments regarding enforcement of the requirements.
For a more detailed discussion of record requests see Subsection E.
Comment: One commenter requested that CBP change the language in
the NPRM of ``false, misleading, or omitting material fact'' to include
the qualifier ``knowingly.''
Response: CBP disagrees because the regulations finalized in this
document only address enforcement actions against individual brokers
who fail to certify completion of the continuing education requirement
when submitting their triennial status reports. This document does not
change in any way 19 CFR 111.53(a), which authorizes CBP to initiate
proceedings for the suspension, for a specific period of time, or
revocation of the license or permit of a customs broker, if the broker
has, among other things, made in any report filed with CBP any
statement which was, at the time and in light of the circumstances
under which it was made, false or misleading with respect to any
material fact, or has omitted to state in any report any material fact
which was required. However, CBP notes that individual brokers may face
suspension or revocation of their licenses if they violate 19 CFR
111.53(a) when certifying completion of the continuing broker education
requirement or when submitting records to CBP under Sec. 111.102(d).
Comment: Many commenters requested that CBP provide an automated
warning or notification message to individual brokers who fail to
include their continuing education credits with their status reports to
ensure awareness and that appropriate action is taken. One commenter
stated that there should be a way, preferably online, for a broker to
verify, and if need be, update the broker's contact information to
ensure that CBP has the correct information on file.
Response: CBP disagrees that it should provide for an automated
warning or notification message. All individual brokers should be aware
of the continuing education requirement and the requirement to certify
completion of the requirement with the filing of the 2027 triennial
status report or in any future reporting year. Individual brokers
should note that they will only be required to certify completion of
the requirement and will not be required to input or attach evidence of
the 36 continuing education credits completed with their triennial
status reports. Individual brokers will only need to produce their
continuing broker education records if CBP requests them under Sec.
111.102(d)(2). Further, CBP cannot say for certain that the eCBP Portal
will have the capability to notify an individual broker of a ``missing
field'' when an individual broker is filing the triennial status
report. However, individual brokers may verify and/or update their
contact information in the ACE Portal to ensure that CBP is sending the
notification to the correct address.\11\ CBP will send notifications to
an individual broker's email address, if an email address is on file,
otherwise to an individual broker's physical address.
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\11\ The ACE Portal is a web-based entry point for ACE to
connect CBP, trade representatives and government agencies who are
involved in importing goods into the United States. The eCBP Portal
is currently the access point for a new system for electronic
payments of licensed customs broker fees. When fully implemented,
the eCBP portal will allow for easy collection of many types of
duties, taxes, and fees.
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Comment: Many commenters requested that CBP provide individual
brokers 60 days to respond to a notification of failure to certify
compliance with the continuing education requirements before
suspension, instead of 30 days as specified in proposed Sec. 111.104.
Additionally, one commenter requested that the suspension period of 120
days before license revocation in proposed Sec. 111.104(d) be extended
to one year to allow sufficient time for a first-time offender to
correct any deficiency and that repeat offenders should be restricted
to a period of less than six months to correct deficiencies.
Response: CBP disagrees with the commenters requesting a longer
timeframe to respond because 30 days is a standard window used when CBP
is seeking a response or action from customs brokers. Furthermore, the
30-day timeframe in Sec. 111.104 is only triggered in the specific and
limited circumstance when an individual broker files an incomplete
triennial status report by failing to certify compliance with the
continuing broker education requirement. Certifying completion of
continuing broker education is an essential requirement and necessary
to maintain an active license in good standing. Failure to complete or
certify completion of the continuing broker education requirement will
have an immediate effect on individual brokers. More importantly, a
license suspension under Sec. 111.104(c) can be avoided with taking
corrective action on or before 30 calendar days from the date of
issuance
[[Page 41238]]
of the notification of the potential suspension. If the license is
suspended, an individual broker under Sec. 111.104(d) can still take
corrective action on or before 120 calendar days from the date of
issuance of the order of suspension. Corrective action can range from
certifying completion of the requirement to completing 36 continuing
education credits. CBP has determined that 120 calendar days is
sufficient time in the most extreme situation for an individual broker
to complete all 36 continuing education credits and return to good
standing. Furthermore, CBP believes a universally applied timeframe
avoids unnecessary and potentially harmful confusion around a
substantial license status change. Individual brokers must be aware
that CBP is serious about compliance with the continuing broker
education requirement, but CBP also wants to ensure minor mistakes can
be quickly corrected with limited effect on the license.
IV. Conclusion
Based on the analysis of the comments and further consideration,
CBP has decided to adopt as final the proposed rule published in the
Federal Register (86 FR 50794) on September 10, 2021, as modified by
the changes noted in Section II, Summary of Changes from the Proposed
Regulations, above and in Section III, Discussion of Comments.
V. Statutory and Regulatory Requirements
A. Executive Orders 12866 and 13563
Executive Orders 13563 and 12866 direct agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rule is not a ``significant regulatory action,''
under section 3(f) of Executive Order 12866. Accordingly, OMB has not
reviewed this regulation.
CBP published the proposed rule titled, ``Continuing Education for
Licensed Customs Brokers,'' on September 10, 2021, and received 70
comments from the public.\12\ CBP adopts the regulatory amendments
specified in the proposed rule with a few changes. After careful
consideration of the public comments, CBP has made the following
modifications: the recognition of half credits for 30 minutes of
continuing broker education; the clarification that CBP will identify,
in coordination with other U.S. government agencies when applicable,
the qualified continuing broker education offered by a government
agency that is relevant to customs business; the clarification that
self-guided online modules qualify towards continuing education
requirements; and the clarification that content providers may apply to
multiple accreditors. With the adoption of the proposed regulatory
amendments, CBP applies the 2021 NPRM's economic analysis approach to
this final rule, updating the data as necessary. The modifications
adopted in this final rule are discussed in greater detail in Sections
II and III above, and do not affect the assumptions underlying the
economic analysis.
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\12\ 86 FR 50794.
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1. Purpose of Rule
The final rule requires active individual customs broker license
holders (``individual brokers'') to complete 36 hours of continuing
education every three years, in line with the triennial status
reporting period. A continuing broker education requirement will
increase the knowledge base from which brokers work, educate them on
changing customs requirements, regulations, and laws, and reduce the
number of errors in filings and resultant penalties. CBP believes that
requiring continuing broker education will enhance the credibility and
value of an individual customs broker license and improve an individual
broker's skills, performance, and productivity. Furthermore, CBP
believes that mandating continuing broker education will increase the
quality of service for individual brokers' clients and importers'
compliance with customs laws, which will protect the revenue of the
United States and aid in maintaining a high standard of professionalism
in the customs broker community.
2. Background
On October 28, 2020, CBP published an advance notice of proposed
rulemaking (ANPRM), entitled ``Continuing Education for Licensed
Customs Brokers,'' in the Federal Register (85 FR 68260). The ANPRM
presented a basic outline for a continuing broker education requirement
for individual brokers and posed questions pertaining to the potential
costs and benefits of such a requirement. Some of the public comments
that CBP received in response to the ANPRM addressed the questions
pertaining to the potential costs and benefits of such a requirement,
although very few responses contained specific information or data. Any
information that was provided on these issues was taken into account in
formulating the analysis in the Notice of Proposed Rulemaking (NPRM) of
the same title, which CBP published in the Federal Register on
September 10, 2021 (86 FR 50794). CBP did not receive comments about
CBP's economic analysis of the proposed rule. CBP has adopted a few
suggestions from the public comments, as outlined above. In this final
rule, CBP describes the new requirement for continuing broker education
for individual brokers.
i. Customs Brokers
A customs broker assists clients with the importation of goods into
the United States, and also with the filing of drawback claims. Customs
brokers can be individuals, partnerships, associations, or corporations
and must be licensed by CBP. Brokers are responsible for helping
clients meet all relevant requirements for importing and submitting
drawback claims, submitting information and payments to CBP on their
client's behalf, and exercising responsible supervision and control
over their employees and customs business.\13\ Only licensed customs
brokers may perform customs business.\14\ Brokers may have expertise in
any number of trade-related areas, including entry, admissibility,
classification, valuation, and duty rates for imported goods. Some
brokers specialize in a specific area of customs business, like
drawback or valuation, while others are more general practitioners. As
of 2022, there are
[[Page 41239]]
13,952 active individual brokers in the United States.\15\
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\13\ 19 U.S.C. 1641(b)(4). For more details on responsible
supervision and control, see 19 CFR 111.1 and 111.28.
\14\ Customs business is defined as: those activities involving
transactions with U.S. Customs and Border Protection concerning the
entry and admissibility of merchandise, its classification and
valuation, the payment of duties, taxes, or other charges assessed
or collected by U.S. Customs and Border Protection upon merchandise
by reason of its importation, or the refund, rebate, or drawback
thereof. It also includes the preparation of documents or forms in
any format and the electronic transmission of documents, invoices,
bills, or parts thereof, intended to be filed with U.S. Customs and
Border Protection in furtherance of such activities, whether or not
signed or filed by the preparer, or activities relating to such
preparation, but does not include the mere electronic transmission
of data received for transmission to CBP. See 19 U.S.C. 1641(a)(2).
\15\ A customs broker may voluntarily suspend his or her license
for a number of reasons and may re-activate the license at a later
time. A broker's license may also be suspended as part of a penalty.
For more information, see 19 CFR 111.52 and 111.53.
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To become a licensed customs broker, an eligible individual \16\
must pass the Customs Broker License Examination, submit a broker
license application and appropriate fees to CBP, and be approved by
CBP.\17\ Once applicants have passed the broker exam, they may apply
for an individual, corporate, partnership, or association license. To
maintain the license, the individual broker or the licensed entity (for
corporations, partnership, or associations) must submit a triennial
status report and requisite fees. The triennial status report and fees
must be submitted by February 1, every three years, since 1985.\18\
Once an individual has been approved as a customs broker, the primary
ongoing requirement for maintaining the license under current
regulations is the submission of the triennial status report and
appropriate fee in three-year periods. Given the established three-year
cycle of triennial status reporting, CBP employs a seven-year period of
analysis to calculate costs and benefits that result from this rule,
accounting for one year of preparation by CBP and two triennial cycles.
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\16\ To be eligible, an individual must be a United States
citizen at least 21 years of age, in possession of good moral
character, and not be an employee of the U.S. government. For more
information, see U.S. Customs and Border Protection, Becoming a
Customs Broker (Dec. 12, 2018), available at <a href="https://www.cbp.gov/trade/programs-administration/customs-brokers/becoming-customs-broker">https://www.cbp.gov/trade/programs-administration/customs-brokers/becoming-customs-broker</a>.
\17\ To be approved, a broker who has passed the broker exam
must also pass an investigation of his or her relevant background.
See 19 CFR 111.14.
\18\ 19 CFR 111.30(d). For more information on the triennial
status report, see U.S. Customs and Border Protection, 2021 Customs
Broker Triennial Status Report FAQs (Feb. 26, 2021), available at
<a href="https://help.cbp.gov/s/article/Article-1711?language=en_US">https://help.cbp.gov/s/article/Article-1711?language=en_US</a>.
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A broker license may be suspended or revoked, or a monetary penalty
assessed, for several violations, ranging from falsifying information
on the license application to willfully and knowingly deceiving,
misleading, or threatening a client.\19\ CBP generally assesses
monetary penalties for less serious infractions, such as the incorrect
filing of entry forms or the misclassification of goods. However, the
majority of civil monetary penalties assessed against brokers for
violations of 19 U.S.C. 1641 involve egregious violations or the
failure to take satisfactory corrective actions following written
notice and a reasonable opportunity to remedy the deficiency, as the
penalties process provides noncompliant brokers with several
opportunities to avoid or mitigate penalty liability.\20\ Monetary
penalties may not exceed $30,000 per violation. From 2017-2021, the
average penalty assessed was $26,670 and the average collected amount
was $2,423 due to mitigations allowed by CBP.\21\
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\19\ See,19 U.S.C. 1641(d)(1) and (g)(2) and 19 CFR 111.53.
\20\ In the case of non-egregious violations, CBP will first
attempt to work with the broker through the informed compliance
process of communication and education. See U.S. Customs and Border
Protection, Electronic Invoice Program (EIP) and Remote Location
Filing (RLF) Handbook (May 2013), p. 22, available at <a href="https://www.cbp.gov/sites/default/files/assets/documents/2016-Dec/Revised_eip_rlf_handbook_12-15_16.pdf">https://www.cbp.gov/sites/default/files/assets/documents/2016-Dec/Revised_eip_rlf_handbook_12-15_16.pdf</a>. This is an attempt to improve
the broker's performance, and precedes the issuance of a pre-penalty
notice, which is a written notice that advises the broker of the
allegations or complaints against the broker. See id.; 19 CFR
111.92(a). If this process fails to remedy the deficiencies, or in
case of egregious violations, CBP will issue a pre-penalty notice to
the broker, which, inter alia, explains that the broker has the
right to respond to the allegations or complaints. See 19 CFR
111.92(a). If the broker files a timely response to the pre-penalty
notice, CBP will either cancel the case, issue a penalty notice in
an amount lower than that provided in the pre-penalty notice, or
issue a penalty notice in the same amount as the pre-penalty notice.
See 19 CFR 111.92(b). Upon the issuance of the penalty notice, the
broker is afforded the opportunity to file a petition for relief in
accordance with the provisions of 19 CFR part 171, which may result
in the cancellation or mitigation of the penalty, and subsequently a
supplemental petition for relief. See 19 CFR 111.93 and 111.95.
\21\ 19 U.S.C. 1641(d)(2)(B). Penalty information comes from
CBP's Seized Currency and Asset Tracking System (SEACATS). Although
the average value of assessed penalty is $26,670, CBP allows brokers
to mitigate penalties, such that the amount collected is often
significantly less, averaging $2,423 from 2017-2021.
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In the fiscal years from 2017 to 2021, CBP assessed an average of
67 penalties to brokers per year.\22\ However, in FY 2017 and FY 2018,
CBP assessed 20 and 21 penalties, respectively, while in FY 2019 and FY
2020, CBP assessed over 100 penalties each year, with an additional 71
penalties assessed in FY 2021 (see Table 1). The significant increase
in penalties from 2018 to 2019 and into 2020, and the slight decline in
2021 is likely due to rapid changes in the international trade
environment in those years, and the experience gained with those
changes. During that time, CBP began enforcing several significant
changes in the realm of international trade, including new antidumping
and countervailing duties (AD/CVD) and the tariffs imposed by the Trump
Administration under section 201 of the Trade Act of 1974 (19 U.S.C.
2251), as amended, section 232 of the Trade Expansion Act of 1962 (19
U.S.C. 1862), as amended, and sections 301 through 310 of the Trade Act
of 1974 (19 U.S.C. 2411 et seq.), as amended.\23\ These changes
affected a significant number of imported goods. CBP provided many
opportunities for individual brokers to learn about the changes,
including webinars, Question and Answer sessions, public forums, and
Federal Register notices. External organizations, like regional broker
associations, also provided information regarding these changes to the
customs laws, which would have led to greater understanding for
individual brokers.
---------------------------------------------------------------------------
\22\ SEACATS.
\23\ Trade remedies implemented by CBP include Section 201 trade
remedies on solar cells and panels and washing machines and parts;
Section 232 trade remedies on aluminum and steel; Section 232 trade
remedies on derivatives; and Section 301 trade remedies to be
assessed on certain goods from China. See U.S. Customs and Border
Protection, Trade Remedies, available at <a href="https://www.cbp.gov/trade/programs-administration/trade-remedies">https://www.cbp.gov/trade/programs-administration/trade-remedies</a> (last visited on March 16,
2023).
---------------------------------------------------------------------------
Although CBP sought information in the ANPRM on the number of
companies employing individual brokers who already complete continuing
education, CBP did not receive enough specific information to estimate
the proportion of companies already providing ongoing training.
Comments in response to the NPRM did not yield any more information,
though commenters did not take issue with the assumptions made below.
Based on information gathered via self-reporting by individual brokers,
CBP is aware of about 300 companies that employ at least one individual
broker who holds an industry certification that requires annual
continuing education.\24\ In the fiscal years from 2017 to 2021, a
group of about 120 of those companies were responsible for 54 percent
of the entries but only nine percent of the penalties.\25\ Overall,
these 120 companies filed 94,808,248 of the total 174,132,601 entries
between 2017 and 2021, but only account for 29 of 337 total penalties
assessed in that period.\26\ For companies outside of this group, CBP
does not know how much continuing education is currently taken.
---------------------------------------------------------------------------
\24\ Information was provided by the National Customs Broker and
Forwarders Association of America (NCBFAA). Nine companies employ at
least 48 brokers certified by programs provided by the NCBFAA's
Education Institute (NEI), and often employ more. An additional 292
companies employing at least one individual broker with an NEI
certification were identified via a survey of NEI's students.
\25\ Significant at the 99 percent confidence level.
\26\ Entry data was pulled from ACE, and penalty data from
SEACATS.
[[Page 41240]]
Table 1--Annual Penalties Assessed by CBP
------------------------------------------------------------------------
Number of
FY penalties
------------------------------------------------------------------------
2017.................................................... 20
2018.................................................... 21
2019.................................................... 119
2020.................................................... 106
2021.................................................... 71
------------------------------------------------------------------------
ii. Continuing Education
Continuing education refers to the training and learning pursued by
professionals outside of the formal education system, usually as part
of career development. Many licensed professions have some sort of
continuing education requirement for license-holders, including
attorneys, accountants, medical professionals, and teachers.\27\
Continuing education is particularly important for professions
characterized by continuously changing rules, standards, and norms.
Customs and international trade is one such profession. Since 2000, the
United States has added two new preferential trade programs and several
new free trade agreements, the most recent being the USMCA, which
replaced the NAFTA.\28\ Additionally, the logistical aspects of customs
have changed significantly over time. For example, CBP introduced the
single window, enabling most CBP forms to be submitted electronically
through the Automated Commercial Environment (ACE), which was fully
implemented in 2016, with added functionalities being deployed on an
ongoing basis.
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\27\ The number of hours of continuing education required for
many professions varies by state as the state is the licensing
authority.
\28\ In October 2000, the United States implemented the
Caribbean Basin Trade Partnership Act, which will expire in 2030
(<a href="https://www.cbp.gov/trade/priority-issues/trade-agreements/special-trade-legislation/caribbean-basin-initiative/cbtpa">https://www.cbp.gov/trade/priority-issues/trade-agreements/special-trade-legislation/caribbean-basin-initiative/cbtpa</a>). The African
Growth and Opportunity Act was also enacted in 2000 (<a href="https://ustr.gov/issue-areas/trade-development/preference-programs/african-growth-and-opportunity-act-agoa">https://ustr.gov/issue-areas/trade-development/preference-programs/african-growth-and-opportunity-act-agoa</a>). See <a href="https://www.state.gov/trade-agreements/outcomes-of-current-u-s-trade-agreements/">https://www.state.gov/trade-agreements/outcomes-of-current-u-s-trade-agreements/</a> for a list of
free trade agreements currently in force.
---------------------------------------------------------------------------
There have been several other significant changes to the customs
environment, including the implementation of the Trade Facilitation and
Trade Enforcement Act (TFTEA), changes in duty rates and tariffs, and
the modernization of the drawback requirements. Individual brokers must
maintain awareness of and adapt to these changes to provide quality
service to clients. However, aside from the broker exam at the
beginning of their careers, individual brokers do not currently have
any requirements ensuring that they maintain up-to-date knowledge of
customs rules, regulations, and practices. As stated above, CBP
believes that the vigorous pace and expanding scope of international
trade require a more stringent continuing education framework for
individual brokers who provide guidance to importers and drawback
claimants.
The effects of continuing education programs are not easily
measured and not often the subject of research.\29\ Some studies show
that various licensed professions do see a mild increase in positive
perception of their industry, performance, and professionalism after
the implementation of continuing education requirements.\30\ Studies
have also demonstrated a positive link between continuing education for
teachers and student outcomes as well as between continuing medical
education and patient outcomes.\31\ Additionally, one study found that
continuing professional education was correlated to an improvement in
financial outcomes for accounting firms, particularly large firms.\32\
Finally, a study of Internal Revenue Service-certified tax preparers
found that mandatory continuing education was potentially linked to
reduced civil penalties, a decrease in non-compliance, and increased
accuracy of tax returns.\33\
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\29\ ``Evaluation of Current Customs Broker Continuing Education
Practices and Literature Review of Continuing Education in Other
Professions.'' Report for CBP prepared by IEC on June 30, 2014. This
document is included in the docket for this final rule, which is
posted on <a href="http://Regulations.gov">Regulations.gov</a>.
\30\ See Bradley, S., Drapeau, M. and DeStefano, J. (2012), The
relationship between continuing education and perceived competence,
professional support, and professional value among clinical
psychologists. J. Contin. Educ. Health Prof., 32: 31-38; O'Leary,
P.F., Quinlan, T.J., & Richards, R.L. (2011). Insurance
Professionals' Perceptions of Continuing Education Requirements.
Journal of Insurance Regulation, 30, 101-117; and Wessels, S.
(2007). Accountants' Perceptions of the Effectiveness of Mandatory
Continuing Professional Education. Accounting Education, 16(4), 365-
378.
\31\ Darling-Hammond, L., Hyler, M.E., and Gardner, M. (2017).
Effective Teacher Professional Development. Learning Policy
Institute; Cervero, R. M., & Gaines, J.K. (2014). Effectiveness of
continuing medical education: updated synthesis of systematic
reviews. Accreditation Council for Continuing Medical Education.
\32\ Chen, Y.-S., Chang, B.-G., & Lee, C.-C. (2008). The
association between continuing professional education and financial
performance of public accounting firms. International Journal of
Human Resource Management, 19(9), 1720-1737.
\33\ Diehl, K. A. (2015). Does Requiring Registration, Testing,
and Continuing Professional Education for Paid Tax Preparers Improve
the Compliance and Accuracy of Tax Returns?--US Results. Journal of
Business & Accounting, 8(1), 138-147.
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Under the terms of this rule, individual brokers will be required
to complete 36 hours of qualifying continuing broker education over
each three-year reporting period. Qualifying activities will include
attending or presenting at accredited events, such as courses,
seminars, symposia, and conventions.\34\ Online activities, including
qualified trainings provided in-house will also be education
opportunities. Individual brokers will be required to self-attest to
the completion of the required continuing broker education on each
triennial status report and maintain records consisting of certain
documentation received from the provider or host of the qualifying
continuing broker education, if such documentation was made available
to the individual broker, and containing information pertaining to the
dates, titles, providers, credit hours earned, and location (if
applicable) for each training. The records can be in any format (i.e.,
electronically or on paper), and the regulations provide CBP with
authority to conduct a record request for a period of three years
following the submission of the status report.
---------------------------------------------------------------------------
\34\ See 19 CFR 111.103(a).
---------------------------------------------------------------------------
iii. Accreditation
To ensure the quality and relevance of continuing education
offerings, they are often accredited by a leading body within the field
in question. For example, the American Medical Association (AMA) is
accredited to provide training by the Accreditation Council for
Continuing Medical Education.\35\ An accreditor is responsible for
reviewing course content and determining the number of credits or hours
to be granted for each course.
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\35\ See American Medical Association, About the AMA's CME
Accreditation, available at <a href="https://edhub.ama-assn.org/pages/ama-cme">https://edhub.ama-assn.org/pages/ama-cme</a>
(last accessed on May 11, 2021).
---------------------------------------------------------------------------
Under the final rule, after an application process (using the RFP,
as described above), CBP will designate entities outside of CBP to act
as accreditors for qualifying continuing broker education. Currently,
CBP anticipates releasing, every three years, an RFP soliciting
applications to become an accreditor for the continuing broker
education program. Every three years following the first cycle,
existing accreditors will also apply for renewal. To apply, potential
and existing accreditors may submit an application to CBP detailing
their standards for accreditation, quality control practices,
application process, and other information. A panel of CBP experts will
convene to review and approve or deny applications. Once approved,
accreditors can begin accepting submissions from program creators or
companies seeking accreditation for
[[Page 41241]]
specific programs. However, training or educational activities offered
by U.S. government agencies--so long as the content is relevant to
customs business as identified by CBP in coordination with the offering
agency--do not require accreditation.\36\
---------------------------------------------------------------------------
\36\ Per section 111.103(a)(1)(i), a training or educational
activity offered by a U.S. government agency other than CBP must be
relevant to customs business.
---------------------------------------------------------------------------
iv. Performance Improvement
Once brokers have passed the broker exam, thereby proving their
basic knowledge and competency to perform the duties of a licensed
customs broker at the time of the exam, they are free to practice in
perpetuity unless the license is suspended or revoked. The statute
dictates that while practicing under the auspices of his or her broker
license, a customs broker must maintain responsible supervision and
control.\37\ CBP's regulations likewise place additional legal
obligations upon customs brokers, including, but not limited to, the
requirement for exercising due diligence in making financial
settlements, answering correspondence, and preparing or assisting in
the preparation and filing of information relating to customs
business.\38\ Staying current on developments in customs law is needed
for individual brokers to comply with their legal obligations, but
presently there are no standards for how much continuing broker
education is needed.
---------------------------------------------------------------------------
\37\ See 19 U.S.C. 1641(b)(4).
\38\ See 19 CFR 111.29(a), and 19 CFR part 111 generally for
additional obligations.
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Under baseline conditions, meaning the world as it is prior to this
rule, CBP does not require brokers to complete any additional training
or prove their ongoing knowledge. The broker exam only tests knowledge
of customs and related laws that are in place at the time of the exam.
While the exam ensures that brokers have a solid base level of
knowledge when they begin practicing, there is no requirement that they
keep up the knowledge, and evidence suggests that as more time passes
since brokers took their exam, the more errors they make. Individual
brokers who were assessed penalties by CBP between 2017 and 2020 have
held their individual broker license for, on average, 37 years. In
contrast, the average individual broker license has been held for 24
years. This suggests that as more time passes since the passing of the
customs broker exam, more errors are made. Furthermore, the exam does
not test for any of the requirements of the more than 40 PGAs involved
in regulating imports. Depending on the individual brokers' needs, CBP
believes that continuing broker education should also include courses
relating to the PGAs' international trade requirements, although there
is no minimum requirement for certain subject matters in this rule.
Given the often fast-paced and evolving nature of the international
trade environment, CBP believes that a continuing broker education
requirement will help to ensure that individual brokers remain current
with their understanding of international trade laws and continue to
expand their knowledge of customs regulations and practices. A more
competent and educated customs broker community will also prevent
costly errors, potentially saving brokers' clients time and money, as
well as relieving CBP from expending valuable audit and penalty
assessment and collection resources.
3. Overview of Assessment
The final rule will result in costs and benefits for individual
brokers, accreditors, providers of continuing education, and CBP. Many
of the costs for individual brokers come in the form of time spent
researching, registering for, attending, and reporting trainings.
Individual brokers will also experience some opportunity cost as they
forgo time spent on other tasks in favor of fulfilling a continuing
broker education requirement. Accreditors must apply to CBP. Though CBP
will not charge a fee, the accreditors will need to spend time in
creating their applications. Similarly, providers of continuing broker
education must apply to accreditors to have their coursework certified.
Finally, CBP must designate accreditors, and, following the full
implementation of the rule's framework, CBP may request records from
individual brokers to confirm compliance.
The benefits from the final rule will be largely qualitative. A
continuing broker education requirement will help to professionalize
and improve the reputation of the customs broker community, as well as
to improve customer service and outcomes. Quantitatively, continuing
education will likely lead to a reduction in errors in documentation
and associated penalties assessed by CBP for some infractions and
violations. Not only will individual brokers not need to pay the
associated penalties, but CBP will save the time of identifying,
assessing, and collecting such penalties. Similarly, CBP will likely
see a reduction in regulatory audits of individual brokers.
4. Historical and Projected Populations Affected by the Rule
The final rule applies to any individual holding an active customs
broker license.\39\ Individual brokers who have voluntarily suspended
their licenses are not required to complete continuing broker education
until they elect to reactivate their licenses, at which point the
requirements are pro-rated depending upon the timing within the
triennial reporting period. Individual brokers who have not held their
license for an entire triennial period at the time their first
triennial status report is due are also exempted from completing
training and reporting in their first triennial status report, though
are bound by the terms of the rule in the following years. As of 2022,
there are 13,952 active, individual broker licenses. All of those
brokers, as well as any brokers who receive their licenses in 2023 will
be required to begin complying with the terms of the rule with the
2024-2027 reporting period, with the first certification of compliance
due at the time of filing the 2027 triennial status report.\40\ Those
brokers receiving their licenses in 2024, 2025, and 2026 will begin
complying with continuing broker education requirements after
completing their first triennial status reports in 2027 and will
perform their first certifications in 2030.\41\
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\39\ Entities holding corporate, association, or partnership
licenses must employ at least one individual broker, who will be
required to comply with the rule. See 19 CFR 111.11(a) and (b).
\40\ Triennial status reports are due in February of the
reporting year and cover the previous three years. For these
brokers, compliance is expected to begin in 2024, with the 2027
triennial status report certifying completion of 36 hours of
continuing broker education in 2024, 2025, and or 2026. As discussed
above in Section I, D. Initial Certification Date, CBP has the
ability to prorate the initial requirements if the rule is
implemented part way through the triennial cycle. If needed, CBP
will reduce the number of required continuing education credits for
the triennial period beginning on February 1, 2024, as deemed
necessary based on a revised implementation date. For the purposes
of this analysis, CBP assumes a requirement of 36 hours of
continuing education to be certified in 2027. To the extent that CBP
must delay full implementation and prorate the number of required
credits, actual costs for brokers in the triennial cycle from 2024-
2027 will be proportionally lower.
\41\ Although brokers may complete their required broker
continuing education at any point in the three years of the
triennial period, for ease of presentation, CBP assumes that brokers
will complete 12 hours of training each year. Brokers receiving
their licenses in 2024, 2025, and 2026 will certify to the
completion of their requirements in 2030, covering training taken in
2027, 2028, and 2029.
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CBP approves approximately 600 new licenses per year, although the
number of licenses added annually has been decreasing since at least
2016. See Table
[[Page 41242]]
2 for a summary of licensing history for the previous six years.
---------------------------------------------------------------------------
\42\ CBP sometimes issues licenses that are later suspended or
terminated (either voluntarily or as a penalty). This table includes
all licenses issued in these years that remain active as of 2022, as
only holders of an active license will need to abide by the terms of
the rule.
\43\ The number of licenses applied for and issued in 2020 was
significantly lower than in previous years due to the effects of the
COVID-19 pandemic and related closures and delays. CBP excluded this
year from calculations of growth rates due to its anomalous nature.
Data for 2021 indicates that broker license applications have mostly
returned to their pre-2020 levels.
Table 2--Licensing History From 2016-2021
----------------------------------------------------------------------------------------------------------------
Total licenses Corporate Individual
Year \42\ licenses licenses
----------------------------------------------------------------------------------------------------------------
2016............................................................ 653 21 632
2017............................................................ 580 16 564
2018............................................................ 558 27 531
2019............................................................ 464 15 449
2020 \43\....................................................... 187 7 180
2021............................................................ 496 31 465
-----------------------------------------------
Total....................................................... 3,708 133 3,575
----------------------------------------------------------------------------------------------------------------
Based on the compound annual growth rate from 2017-2021, which
shows a decline of 4 percent in the number of individual licenses
issued, CBP estimates it will issue 447 new individual licenses in
2022, the year preceding the period of analysis.\44\ CBP estimates it
will issue 2,692 new individual licenses over a seven-year period of
analysis from 2023-2029, and 2,261 new individual licenses from 2024-
2029, the part of the period of analysis during which brokers will need
to fulfill the requirements of the rule (see Table 3). Not all those
license holders will be required to complete continuing broker
education during the seven-year period of analysis; those brokers
receiving their licenses in 2027, 2028, and 2029 will not need to begin
compliance until after their first triennial reporting period in 2030.
All new individual license holders will need to comply with the terms
of the rule once it is in effect and they have completed their first
triennial status report. This includes the 13,952 individual brokers
licensed and active as of January 2022 as well as the 447 individual
brokers projected to receive their licenses in 2022 and the 430
individual brokers projected to receive their licenses in 2023.
Individual brokers who receive licenses in 2024-2026 will not need to
comply with the rule until after their first triennial reporting
period, beginning in 2027. CBP estimates that 1,196 individual brokers
will receive licenses from 2024-2026, with 1,065 receiving them from
2027-2029 and completing their first continuing education certification
outside the period of analysis. In total, therefore, CBP estimates that
16,026 individual brokers will be required to abide by the rule in the
six years from 2024 to 2029.\45\ No brokers will be required to comply
with the rule in 2023, though brokers licensed that year will need to
comply in subsequent years.
---------------------------------------------------------------------------
\44\ The rate of decline in licenses can vary based on the years
chosen for calculations. In the NPRM, CBP estimated a decline of 12
percent, but data from 2021 indicates that licensing recovered to
and increased from levels seen before disruptions from the COVID-19
pandemic, resulting in a reduction in the rate of decline in
licenses issued. CBP believes that this recovery is likely to
continue for a few more years as the industry adjusts.
\45\ 14,828 individual brokers will certify compliance in the
2027 triennial report (who will comply from 2024-2026) = 13,952
(2022 active) + 447 (2022 new) + 430 (2023 new)). 16,026 individual
brokers will certify compliance in the 2030 triennial report (who
will comply from 2027-2029) = 14,828 (2024 active) + 414 (2024 new)
+ 398 (2025 new) + 383 (2026 new).
\46\ All active, licensed, individual customs brokers will begin
complying with the rule in 2024, regardless of what year they
received their license. The 1,343 licenses newly affected in 2024
include those brokers who received their licenses in 2021, 2022, and
2023 and will complete their first triennial status report in 2024.
Table 3--Projected Licenses Issued From 2023-2029
----------------------------------------------------------------------------------------------------------------
Total New licenses
Year licenses Corporate Individual affected by
issued licenses licenses the rule
----------------------------------------------------------------------------------------------------------------
2023............................................ 459 29 430 0
2024............................................ 442 28 414 \46\ 1,343
2025............................................ 425 27 398 0
2026............................................ 409 26 383 0
2027............................................ 393 25 369 1,196
2028............................................ 379 24 355 0
2029............................................ 364 23 341 0
---------------------------------------------------------------
Total....................................... 2,871 179 2,692 2,539
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
[[Page 41243]]
Although the majority of active individual brokers will be required
to complete continuing education under the rule, feedback from the
broker community indicates that many brokers already complete the
amount of continuing education that will satisfy this requirement.\47\
Many companies that employ individual brokers provide and require in-
house training and continuing education. Both independent brokers and
brokers employed by brokerages often attend government-sponsored
webinars, as well as trade conferences and symposia, which will qualify
as continuing broker education under the terms of the rule. Many
individual brokers also pursue professional certifications like the
National Customs Brokers and Freight Forwarders Association of
America's (NCBFAA) Certified Customs Specialist (CCS) and Certified
Export Specialist (CES).\48\ Under the baseline, or the world as it is
now, these individual brokers likely will be in compliance with the
final rule and, assuming similar activities when a continuing education
requirement is imposed, will not incur new costs under the new
requirements, except for new reporting costs.
---------------------------------------------------------------------------
\47\ Feedback was provided in the form of public comments on the
ANPRM and was not disputed in public comments on the NPRM.
Additional feedback was provided in various meetings and discussions
between CBP personnel and customs brokers, as well as at trade
conferences and meetings of the Task Force for Continuing Education
for Licensed Customs Brokers, a part of the Commercial Customs
Operations Advisory Committee (COAC). COAC is jointly appointed by
the Secretary of the Treasury and the Secretary of DHS and advises
the Secretary of the Treasury and the Secretary of Homeland Security
on all matters involving the commercial operations of CBP. Meetings
of COAC are presided over jointly by the Deputy Assistant Secretary
for Tax, Trade, and Tariff Policy of the Department of Treasury and
Commissioner of CBP, as described in section 109 of TFTEA. See III.
Discussion of Comments, above.
\48\ We included both individual brokers qualifying as CCS and
CES in our analysis as the coursework for both has significant
overlap and is relevant to customs business.
---------------------------------------------------------------------------
Overall, CBP estimates that approximately 60 percent of individual
brokers already pursue continuing education and will be in compliance
with the rule.\49\ CBP bases this estimation on several factors. First,
the NCBFAA estimates that approximately 4,456 individual brokers hold a
CCS or CES certification in 2020, representing 32 percent of total
individual brokers.\50\ In order to maintain these professional
certifications, these individual brokers are required to earn 20
continuing education credits per year.\51\ Additionally, public
comments in response to the ANPRM, as well as discussions between CBP
and various broker organizations, indicate that most large businesses
employing individual brokers already provide, and often mandate,
internal training and continuing education. Based on data from the U.S.
Census Bureau, approximately 61 percent of those employed within the
Freight Transportation Arrangement Industry (NAICS code 448510) are not
employed by small businesses. A small business within the Freight
Transportation Arrangement Industry is defined as one whose annual
receipts are less than $20.0 million in 2022 dollars ($17,274,816 in
2017 dollars, using the CPI to account for inflation), regardless of
the number of employees.\52\ Table 4 shows the receipts per firm, in
millions of dollars (2017), for firms employing each number of
employees.\53\ The average firm within Categories 7 and 9 has annual
receipts of greater than $17.5 million in 2017 dollars and is
considered a large business. These firms employ 161,463 people, or
approximately 61 percent of the total employees in the industry.
---------------------------------------------------------------------------
\49\ CBP requested information about the proportion of
individual brokers already complying with the rule in the ANPRM.
Although CBP did not receive specific information in the public
comments, several commenters said they will be compliant and
believed that significant numbers of other individual brokers will
be as well. Many also noted that their companies require their
broker employees to complete continuing education. Public comments
in response to the NPRM did not dispute this assumption.
\50\ Discussion with officials at the NCBFAA on April 5, 2021.
This includes individual brokers renewing their certification in
2020, as well as those becoming certified for the first time. The
CCS certification program requires enough hours of continuing
education to comply with the terms of the rule and the NCBFAA has
expressed interest in becoming an accredited provider.
\51\ See National Customs Brokers & Forwarders Association of
America, Inc., Continuing Education available at <a href="https://www.ncbfaa.org/education/continuing-education">https://www.ncbfaa.org/education/continuing-education</a>. Accessed March 16,
2023.
\52\ Small business size standards are defined in 13 CFR part
121. To calculate the effects of inflation from January 2017 to
January 2022, see <a href="https://www.bls.gov/data/inflation_calculator.htm">https://www.bls.gov/data/inflation_calculator.htm</a>.
\53\ United States Census Bureau, ``2017 County Business
Patterns and 2017 Economic Census,'' Released March 6, 2020, <a href="https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html">https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html</a>.
Accessed March 15, 2021.
\54\ Note that some of the categories are sums of other
categories. For example, Category 8, <500, is a sum of Categories 2,
3, 4, 6, and 7. Thus, Categories 7 and 9 are not consecutive, but
represent all firms employing 100 or more people.
\55\ The Survey of U.S. Businesses (SUSB) from which this data
is taken is conducted in years ending in 2 and 7.
Table 4--Small Businesses in the Freight Transportation Arrangement Industry, 2017
----------------------------------------------------------------------------------------------------------------
Preliminary
Number of receipts (all Receipts per
Employment size \54\ employees firms, firm ($) Small business?
$1,000s) \55\
----------------------------------------------------------------------------------------------------------------
01: Total........................... 265,192 $67,276,572 $4,454,222 ..........................
02: <5.............................. 15,939 6,315,166 708,614 Yes.
03: 5-9............................. 18,025 5,392,992 1,974,732 Yes.
04: 10-19........................... 20,288 5,870,163 3,851,813 Yes.
05: <20............................. 54,252 17,578,321 1,335,029 Yes.
06: 20-99........................... 49,477 13,973,780 10,397,158 Yes.
07: 100-499......................... 44,715 10,886,028 30,493,076 No.
08: <500............................ 148,444 42,438,129 2,854,327 Yes.
09: 500+............................ 116,748 24,838,443 105,247,640 No.
----------------------------------------------------------------------------------------------------------------
Given the proportion of individual brokers working for larger
businesses, the feedback on the ANPRM indicating high rates of
compliance, the proportion of individual brokers pursing
certifications, and input from CBP subject matter experts who
frequently interact with the broker community, CBP estimates that
approximately 60 percent of individual brokers are already in
compliance with the requirements of the rule and will not face new
costs, assuming a continuing level of similar activity, aside from
recordkeeping and reporting, as a result of the rule's implementation.
CBP did not receive any comments on this assumption in response to the
NPRM.
[[Page 41244]]
Based on the likely proportion of individual brokers already in
compliance, CBP estimates that 6,410 affected individual brokers, or
approximately 40 percent, will need to come into compliance with the
rule over a seven-year period of analysis (see Table 5). Although we
requested comment on our assumption that 60 percent of brokers already
spend at least 36 hours per three-year period on continuing education
and that the remaining 40 percent of brokers will need to increase
their training by the full 36 hours triennially to meet the
requirement, the public comments received in response to the NPRM did
not address this question. We therefore maintain the same assumption
for the final rule.
Table 5--Projection of Brokers Affected by the Final Rule
----------------------------------------------------------------------------------------------------------------
Total licensed
Year Total licenses Proportion in brokers
compliance (%) affected
----------------------------------------------------------------------------------------------------------------
2023............................................................ 13,952 60 0
2024............................................................ 14,830 60 5,932
2025............................................................ 14,830 60 5,932
2026............................................................ 14,830 60 5,932
2027............................................................ 16,026 60 6,410
2028............................................................ 16,026 60 6,410
2029............................................................ 16,026 60 6,410
-----------------------------------------------
Total....................................................... 16,026 .............. 6,410
----------------------------------------------------------------------------------------------------------------
Although individual brokers are the primary party affected by the
terms of the rule, the rule will also have an impact on CBP, providers
of continuing broker education, and the bodies who accredit continuing
broker education. Each party will see both costs and benefits under the
final rule.
5. Costs of the Rule
i. To Brokers
The primary cost to individual brokers upon implementation of the
rule will be those costs associated with finding and attending 36 hours
of continuing broker education over a three-year period. These costs
include time spent researching reputable and relevant trainings, travel
and incidental expenses to attend in-person events like conferences,
and the tuition or fees for the courses themselves. Many individual
brokers might satisfy the continuing broker education requirement with
training supplied by their employers. Other individual brokers,
particularly those self-employed or employed by small businesses, will
need to seek external training. For external training, individual
brokers may attend free webinars, seminars, and trade events sponsored
by CBP, other government agencies, and various related organizations
like local freight forwarder and broker associations.\56\
Alternatively, individual brokers might choose paid trainings,
conferences, or symposia, or seek certifications offered by trade
organizations or educational institutions. Based on comments received
in response to the NPRM, CBP is also clarifying that self-guided,
online courses or content, whether free or paid, which culminate in a
retention test are also acceptable if accredited.
---------------------------------------------------------------------------
\56\ For example, the Florida Customs Broker and Forwarders
Association offers both paid and free events. Information on CBP-
hosted webinars can be found at <a href="https://www.cbp.gov/trade/stakeholder-engagement/webinars">https://www.cbp.gov/trade/stakeholder-engagement/webinars</a>. Many other government agencies also
provide webinars on trade-related topics. For example, in 2020, the
Food and Drug Administration (FDA) hosted a series of webinars on
the importation of medical devices in light of the COVID-19
pandemic. See <a href="https://www.fda.gov/medical-devices/workshops-conferences-medical-devices/webinar-series-respirators-and-other-personal-protective-equipment-ppe-health-care-personnel-use">https://www.fda.gov/medical-devices/workshops-conferences-medical-devices/webinar-series-respirators-and-other-personal-protective-equipment-ppe-health-care-personnel-use</a>.
---------------------------------------------------------------------------
CBP does not know exactly which option each individual broker is
likely to choose. Many individual brokers already hold certifications,
attend webinars, and fulfill internal training requirements, though
they may need to increase the number of hours completed to comply with
the final rule. Therefore, CBP has estimated a range of costs. Some
individual brokers will fulfill their continuing broker education
requirements with only free trainings. Others will follow a medium-cost
path by opting for a mix of free, lower-cost, and internal trainings.
CBP further assumes that individual brokers electing the medium-cost
path will travel to attend one major conference or symposium in-person
per year. Finally, some will meet requirements by completing only paid
courses representing the highest-cost offerings. CBP assumes that
individual brokers choosing the higher-cost option will travel to
attend an average of two conferences per year.
There are several organizations that provide continuing education
for customs brokers, ranging from regional broker associations to
national entities, such as the American Association of Exporters and
Importers (AAEI). Continuing broker education that qualifies under the
terms of the rule includes webinars, seminars, and trade conferences.
The hourly cost of such trainings (excluding free events provided by
government agencies and other organizations) usually ranges from around
$25 to $70. Fees are often tiered based on membership of the hosting
organization. Members of an organization may pay $25 while non-members
pay $45. CBP cannot predict which organizations will seek accreditation
for their events, although free webinars and trainings hosted by
Federal government agencies and identified by CBP will qualify and do
not require approval by a CBP-selected accreditor. Therefore, we assume
that the average hourly monetary cost will range from $0.00 (low) to
$30 (medium) to $50 (high). This assumption is based on current fees
charged for various continuing education certifications, webinars, and
trade conferences, and CBP did not receive any comments on these
assumptions in response to the NPRM.\57\
---------------------------------------------------------------------------
\57\ CBP does not have information on the cost for an employer
to provide training internally, although such information was
requested in the ANPRM. CBP believes the cost for internal training
will be closer to that of attending external trainings as a member,
since member fees are likely much closer to base cost of provision
than non-member fees.
---------------------------------------------------------------------------
In addition to fees, individual brokers will need to spend some
time in researching relevant and accredited trainings. CBP assumes that
an individual broker will spend approximately three hours finding and
registering for continuing broker education during every triennial
period, an assumption that was not commented
[[Page 41245]]
upon in response to the NPRM. Many individual brokers are members of
both local and national organizations that provide continuing education
opportunities and will likely be notified of opportunities via
newsletters or listservs. Other individual brokers will need to spend
some time finding and verifying accreditation for qualifying events.
All individual brokers will spend some time registering for events.
Based on an average loaded wage rate of $34.81, the process of
researching and registering for trainings will cost brokers
approximately $2.90 per credit hour.\58\
---------------------------------------------------------------------------
\58\ The median wage rate for brokers is best represented by
BLS's Occupational Employment and Wage Statistics estimate for the
median hourly wage rate for Cargo and Freight Agents (Occupation
Code #43-5011), which was $22.55 in 2021. To account for non-salary
employee benefits, CBP multiplied the median hourly wage by the 2021
ratio of BLS's Employer Cost for Employee Compensation quarterly
estimate of total compensation to wages and salaries for Office and
Administrative Support occupations, the assumed occupational group
for brokers. To adjust to 2022 dollars, CBP also assumes an annual
growth rate of 4.15% based on the prior year's change in the
implicit price deflator, published by the Bureau of Economic
Analysis. Sources: U.S. Bureau of Labor Statistics. Occupational
Employment Statistics, ``May 2021 National Occupational Employment
and Wage Estimates United States.'' Updated March 31, 2022.
Available at <a href="https://www.bls.gov/oes/2021/may/oes_nat.htm">https://www.bls.gov/oes/2021/may/oes_nat.htm</a>, Accessed
May 25, 2022. The total compensation to wages and salaries ratio is
equal to the calculated average of the 2021 quarterly estimates
(shown under Mar, Jun, Sep, Dec) of the total compensation cost per
hour worked for Office and Administrative Support occupations
($29.6125) divided by the calculated average of the 2021 quarterly
estimates (shown under March, June, Sept., Dec.) of wages and
salaries cost per hour worked for the same occupation category
($19.9825). Source of total compensation to wages and salaries ratio
data: U.S. Bureau of Labor Statistics. Employer Costs for Employee
Compensation. ``ECEC Civilian Workers--2004 to Present.'' March
2022. Available at <a href="https://www.bls.gov/web/ecec.supp.toc.htm">https://www.bls.gov/web/ecec.supp.toc.htm</a>.
Accessed May 25, 2022. Because median hourly wage information was
not available for this respondent, CBP adjusted the annual median
wage for this respondent to an hourly estimate using the standard
2,080 hours worked per year.
---------------------------------------------------------------------------
Many individual brokers also travel to attend trade conferences
each year. CBP assumes that those individual brokers electing the
lower-cost options will forgo travel and either attend virtually
(paying only the fee) or not attend at all. CBP assumes that individual
brokers in the medium-cost tier will travel to attend one conference
each year, while individual brokers in the high-cost tier will travel
to attend two conferences.\59\ Tuition and fees for conferences, broken
down into an hourly rate, are already accounted for in the average
costs of $30-$50 per hour. Traveling to attend a single 3-day
conference costs approximately $332 in airfare, $288 for lodging, and
$177 for meals and incidentals, for a total of $797 for one conference
or $1,593 for two conferences (see Table 6).\60\ Over the three years
of the triennial cycle, attending a single conference per year costs
$2,391 and attending two conferences per year costs $4,779. Spread
across 36 hours of training, travel costs account for an additional $66
per hour (medium) or $133 per hour (high).
---------------------------------------------------------------------------
\59\ Some individual brokers will pay for their travel out of
pocket, while other will have their travel expenses covered by their
employers.
\60\ CBP bases these costs off the average, annual price of a
domestic flight in 2021, and the General Services Administration's
per diem cost for lodging and meals and incidental expenses. For the
flight costs, CBP used the inflation-adjusted national average for
2021, annual. Source for flight costs: The Bureau of Transportation
Statistics, ``Average Domestic Airline Itinerary Fares,'' <a href="https://www.transtats.bts.gov/AverageFare/">https://www.transtats.bts.gov/AverageFare/</a>. Accessed March 21, 2023 (select
`Annual' and `2021' from the drop-down menu). To calculate the
lodging costs, CBP used the General Services Administration's FY22
standard lodging per diem rate for the Continental United States
($96) and assumed an average stay of 3 nights (3 nights * $96 per
night = $288). To calculate the cost of meals and incidentals, CBP
used the GSA's meals and incidental expenses reimbursement rate ($59
per day) and again assumed an average stay of 3 days ($59 per day *
3 days = $177). Source for per diem costs: U.S. General Services
Administration, ``FY22 Per Diem Highlights,'' <a href="https://www.gsa.gov/cdnstatic/FY_2022_Per_Diem_Rates_Highlights.docx">https://www.gsa.gov/cdnstatic/FY_2022_Per_Diem_Rates_Highlights.docx</a>. Accessed March 21,
2023.
Table 6--Travel and Incidental Costs To Attend In-Person Events
[2022 U.S. dollars]
----------------------------------------------------------------------------------------------------------------
Cost General cost Low Medium High
----------------------------------------------------------------------------------------------------------------
Transportation.................................. $332 $0 $332 $664
Hotel........................................... 288 0 288 576
Meals & Incidentals............................. 177 0 177 354
---------------------------------------------------------------
Total (Per Year)............................ 797 0 797 1,593
----------------------------------------------------------------------------------------------------------------
To determine the total costs of the rule to a single broker, CBP
calculated the costs of tuition for qualifying continuing education,
travel to conferences, and research and registration on a per-credit
hour basis. As described above, CBP assumes the per-credit hour cost of
trainings to range from $0 (low) to $30 (medium) to $50 (high). The
cost of research and registration is constant across tiers, as
described above, and totals $2.90 per credit hour. The per-credit hour
cost of travel is calculated by multiplying the per year cost of
attending conferences described in Table 6 by 3 years and then dividing
by 36 credit hours per triennial period. This results in costs of $0
(low), $66 (medium), and $133 (high). The total, per-credit hour cost
for a single broker therefore comes to $2.90 (low; $0 + $2.90 + $0),
$99 (medium; $30 + $2.90 + $66), and $186 (high; $50 + $2.90 + $133).
Overall, as a result of the rule, an individual broker will likely
incur monetary costs ranging from $34.81 (low) to $1,191 (medium) to
$2,228 (high) per year to complete 36 hours of continuing education in
a three-year period. Over a seven-year period of analysis, these costs
sum to $209 (low), $7,148 (medium), or $13,367 (high). See Table 7 for
a summary of these costs.
---------------------------------------------------------------------------
\61\ Individual brokers may complete whatever number of hours
they prefer during each year, so long as it totals 36 hours in three
years. CBP designates 12 hours per year both for ease of
presentation and to account for pro-rating for individual brokers
who re-activate their licenses within the triennial period.
\62\ Costs include tuition/fees, travel costs, and research time
costs for each level.
[[Page 41246]]
Table 7--Annual Costs for One Broker
[2022 U.S. dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Low Medium High
Year Hours \61\ -----------------------------------------------------------------------------
Costs \62\ Total Costs Total Costs Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
2023......................................................... 0 $0.00 $0.00 $0 $0 $0 $0
2024......................................................... 12 2.90 34.81 99 1,191 186 2,228
2025......................................................... 12 2.90 34.81 99 1,191 186 2,228
2026......................................................... 12 2.90 34.81 99 1,191 186 2,228
2027......................................................... 12 2.90 34.81 99 1,191 186 2,228
2028......................................................... 12 2.90 34.81 99 1,191 186 2,228
2029......................................................... 12 2.90 34.81 99 1,191 186 2,228
------------------------------------------------------------------------------------------
Total.................................................... 72 17 209 596 7,148 1,114 13,367
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
There were 13,952 licensed individual brokers at the beginning of
2022, with 447 and 430 additional brokers projected to receive their
licenses in 2022 and 2023, respectively. Therefore, 14,830 brokers will
be required to begin complying with the rule in 2024. Additionally,
brokers newly licensed in 2024, 2025, or 2026 will be required to begin
complying with the rule in 2027, for a total of 16,026 brokers
reporting compliance in their 2030 triennial reports. CBP estimates
that a total of 6,410 will be required to begin to complete continuing
broker education under the terms of the rule in the seven-year period
of analysis, based on a current estimated compliance rate of 60 percent
(see Historical and Projected Populations Affected by the Rule, above).
Therefore, CBP estimates that brokers will incur costs related to
searching for training, fees, travel, and incidentals, totaling from
$1,288,903 (low) to $44,111,892 (medium) to $82,491,664 (high) over the
seven-year period of analysis. See Table 8.
---------------------------------------------------------------------------
\63\ Only the 40 percent of individual brokers who do not
already complete continuing education will face these costs. The
total number of individual brokers affected in the final year of
analysis (2029) is the same as the number of individual brokers
overall because each year represents the same population with a
small amount of growth.
Table 8--Total Annual Training Costs for Individual Broker License Holders
[2022 U.S. dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Low Medium High
Year Brokers -----------------------------------------------------------------------------
\63\ Cost Total Cost Total Cost Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
2023......................................................... 0 $0.00 $0 $0 $0 $0 $0
2024......................................................... 5,932 34.81 206,491 1,191 7,067,013 2,228 13,215,702
2025......................................................... 5,932 34.81 206,491 1,191 7,067,013 2,228 13,215,702
2026......................................................... 5,932 34.81 206,491 1,191 7,067,013 2,228 13,215,702
2027......................................................... 6,410 34.81 223,144 1,191 7,636,952 2,228 14,281,519
2028......................................................... 6,410 34.81 223,144 1,191 7,636,952 2,228 14,281,519
2029......................................................... 6,410 34.81 223,144 1,191 7,636,952 2,228 14,281,519
------------------------------------------------------------------------------------------
Total.................................................... 6,410 209 1,288,903 7,148 44,111,892 13,367 82,491,664
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
To create a primary estimate, CBP assumes that approximately one
third of individual brokers will elect the lowest cost path ($34.81
each year), one third will elect the medium-cost path ($1,191 each
year), and one third will elect the highest cost path ($2,228 each
year) once the rule is in place. CBP did not receive any comments on
this assumption in response to the NPRM. Under these conditions,
individual brokers who begin pursuing continuing education as a result
of the rule will face $42,630,820 in costs related to searching for
training, fees, travel, and incidentals over the seven-year period of
analysis. See Table 9.
Table 9--Primary Estimate of Training & Travel Costs for Brokers
[2022 U.S. dollars]
----------------------------------------------------------------------------------------------------------------
Brokers
Year Total brokers choosing each Total cost
path
----------------------------------------------------------------------------------------------------------------
2023............................................................ 0 0 $0
2024............................................................ 5,932 1,977 6,829,735
2025............................................................ 5,932 1,977 6,829,735
2026............................................................ 5,932 1,977 6,829,735
2027............................................................ 6,410 2,137 7,380,538
[[Page 41247]]
2028............................................................ 6,410 2,137 7,380,538
2029............................................................ 6,410 2,137 7,380,538
-----------------------------------------------
Total....................................................... 6,410 .............. 42,630,820
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
All individual brokers, including those who already complete
continuing education and will not face new costs for research, tuition,
and travel, will also be required to store records of their completed
continuing broker education and report their compliance to CBP.\64\
Record storage will require maintaining either paper or digital copies
of any documentation received from the provider or host of the
qualifying continuing broker education and a document of some kind
listing the date, title, provider, number of credit hours, and location
(if applicable) for each training. To report and certify compliance,
individual brokers who file paper-based triennial status reports with
CBP will include a written statement in the triennial status report,
and individual brokers who file their triennial status reports
electronically through the eCBP portal will check a box in the eCBP
portal while filing their triennial status report electronically.
Individual brokers will further be required to produce their records of
compliance if requested by CBP, though CBP will only require individual
brokers to maintain their records for the three years following the
submission of the triennial status report.\65\ CBP estimates that
recordkeeping and reporting will take each individual broker 30 minutes
(0.5 hours) per year. After the first triennial reporting period in
which individual brokers self-attest to completing their training, 10
percent of individual brokers each year will incur the cost of
producing records to submit to CBP following a record request, which
CBP estimates will take 15 minutes (0.25 hours).\66\ Therefore,
individual brokers will see $1,652,969 in new reporting and
recordkeeping costs over the seven-year period of analysis. See Table
10.
---------------------------------------------------------------------------
\64\ Some individual brokers will likely face additional time-
costs should they fail to complete and/or report their required
continuing broker education and need to take corrective action or
reapply for their licenses following revocation (see section
111.104(d) for details). However, CBP only reports the costs
affected populations will face to maintain compliance with the rule.
\65\ Note that many other records must be maintained for five
years. The three-year standard applies only to records of continuing
education.
\66\ The exact percentage of record requests made will vary
across each triennial reporting period. For the purposes of this
analysis, we assume CBP will randomly select 10 percent of
individual brokers to request records from each year.
\67\ Note that only 10 percent of individual brokers will spend
45 minutes per year, while the remaining 90 percent will spend 30
minutes per year. Furthermore, CBP will only begin record requests
after the first triennial period during which the rule is in effect.
Table 10--Reporting Costs for All Brokers
[2022 U.S. dollars]
----------------------------------------------------------------------------------------------------------------
Time for
Time for producing
Year Brokers recordkeeping records (10% of Loaded wage Total
(hours) \67\ brokers)
----------------------------------------------------------------------------------------------------------------
2023........................ 0 0.00 0.00 34.81 $0
2024........................ 14,830 0.50 0.00 34.81 258,113
2025........................ 14,830 0.50 0.00 34.81 258,113
2026........................ 14,830 0.50 0.00 34.81 258,113
2027........................ 16,026 0.50 0.25 34.81 292,876
2028........................ 16,026 0.50 0.25 34.81 292,876
2029........................ 16,026 0.50 0.25 34.81 292,876
-----------------------------------------------------------------------------------
Total................... 16,026 3 0.75 .............. 1,652,969
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
To comply with the final rule, individual brokers who do not
already do so will be required to spend 36 hours over three years
completing continuing broker education in whatever form they choose.
Additionally, CBP estimates they will spend three hours per three-year
cycle researching and registering for trainings. Finally, individual
brokers will need to spend about 30-45 minutes (0.5-0.75 hours) on
recordkeeping per year. Overall, individual brokers will need to spend
about 40.5 hours over a three-year period, or 81 hours over a seven-
year period of analysis, to comply with the rule.
Some individual brokers will choose to complete their trainings
outside of work hours, while others will complete training as part of
their assigned duties. Individual brokers will also spend time in
researching, registering for, and maintaining records of their
continuing broker education, for a total of 12 hours per year of
training plus 1.5 to 1.75 hours per year in research and recordkeeping.
Based on the average loaded wage rate for brokers of $34.81, the
opportunity cost of researching, registering for, attending, and
reporting continuing broker education is approximately $17,432,417 over
the seven-year period of analysis. See Table 11.
[[Page 41248]]
Table 11--Summary of Opportunity Cost for Brokers
[2022 U.S. dollars]
----------------------------------------------------------------------------------------------------------------
Loaded wage
Year Brokers Hours rate Cost
----------------------------------------------------------------------------------------------------------------
2023............................................ 0 0.0 $34.81 $0
2024............................................ 5,932 13.5 34.81 2,792,787
2025............................................ 5,932 13.5 34.81 2,792,787
2026............................................ 5,932 13.5 34.81 2,792,787
2027............................................ 6,410 13.5 34.81 3,018,019
2028............................................ 6,410 13.5 34.81 3,018,019
2029............................................ 6,410 13.5 34.81 3,018,019
---------------------------------------------------------------
Total....................................... 6,410 81 243.67 17,432,417
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
Total costs for all individual brokers, including tuition and
travel expenses for those who must begin continuing broker education
regimens because of the rule (see Tables 8 and 9) as well as
opportunity costs (see Table 11) and reporting costs (see Table 10) for
all individual brokers, range from $20,374,289 to $101,577,050. The
primary estimate, which accounts for one third of individual brokers
choosing each cost tier, comes to $61,716,206 over the seven-year
period of analysis. See Table 12.
Table 12--Total Costs for All Brokers
[2022 U.S. dollars]
----------------------------------------------------------------------------------------------------------------
Total cost: Total cost:
Year Total cost: medium Total cost: primary
low estimate estimate high estimate estimate
----------------------------------------------------------------------------------------------------------------
2023............................................ $0 $0 $0 $0
2024............................................ 3,257,391 10,117,913 16,266,602 9,880,635
2025............................................ 3,257,391 10,117,913 16,266,602 9,880,635
2026............................................ 3,257,391 10,117,913 16,266,602 9,880,635
2027............................................ 3,534,039 10,947,847 17,592,414 10,691,433
2028............................................ 3,534,039 10,947,847 17,592,414 10,691,433
2029............................................ 3,534,039 10,947,847 17,592,414 10,691,433
---------------------------------------------------------------
Total....................................... 20,374,289 63,197,278 101,577,050 61,716,206
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
ii. To CBP
To implement the requirements of the rule, CBP will need to
designate entities or companies as approved accreditors of continuing
broker education. To do so, CBP will solicit applications from parties
interested in becoming accreditors, or (following the first application
cycle) accreditors seeking renewal of their status, by publishing an
RFP.\68\ A panel of CBP experts will evaluate the applications and
select the entities approved or renewed as accreditors. CBP estimates
that the process of developing and submitting the RFP will take two
personnel 10 hours each. Application evaluation will take a further 40
hours per employee and will require four CBP personnel. The process of
designating accreditors will occur before the continuing broker
education requirements go into effect, to allow accreditors to be ready
for the rule's implementation and ensure equal footing for all
providers.\69\ Accreditors and CBP will need to complete the process
three times in a seven-year period. Overall, designation of accreditors
will require six CBP personnel 180 hours total, three times in a seven-
year period of analysis, for a cost to CBP of $59,260 (see Table 13).
---------------------------------------------------------------------------
\68\ See 19 CFR 111.103(c).
\69\ See Section I.E. of this final rule.
\70\ CBP bases this rate on the FY 2022 salary, benefits,
premium pay, non-salary costs, and awards of the national average of
CBP Trade and Revenue positions, which is equal to a GS-12, Step 10.
This represents the average, fully-loaded wage per hour, including
salary, benefits, premium pay, and non-salary costs (assuming 2,080
work hours/year). Source: Email correspondence with CBP's Office of
Finance on June 27, 2022.
Table 13--Costs to CBP To Designate Accreditors
[2022 U.S. dollars]
----------------------------------------------------------------------------------------------------------------
Personnel for Personnel for Fully-loaded
Year RFP evaluation wage rate \70\ Total hours Total
----------------------------------------------------------------------------------------------------------------
2023............................ 2 4 109.74 180 19,753
2024............................ 0 0 109.74 0 0
2025............................ 0 0 109.74 0 0
2026............................ 2 4 109.74 180 19,753
2027............................ 0 0 109.74 0 0
2028............................ 0 0 109.74 0 0
[[Page 41249]]
2029............................ 2 4 109.74 180 19,753
-------------------------------------------------------------------------------
Total....................... .............. .............. .............. .............. 59,260
----------------------------------------------------------------------------------------------------------------
* To
[…truncated; see source link]Indexed from Federal Register on June 23, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.