Background

The Census Bureau is responsible for collecting, compiling, and publishing import and export trade statistics for the United States. As part of this responsibility, the Census collects Electronic Export Information (EEI) in concert with the export control and enforcement functions of U.S. Customs and Border Protection (CBP) of the Department of Homeland Security (DHS), the Bureau of Industry and Security (BIS), and the Directorate of Defense Trade Controls (DDTC).

Public Law 107-228 directed the Census to publish regulations requiring exporters to file Shippers’ Export Declarations. As a result, the bureau experienced an increase in the number of inquiries regarding in-transit movements. Accordingly, in October of 2024 the Census solicited comments on a proposed rule to clarify its regulations governing in-transit shipments. The bureau received 11 letters and emails commenting on the proposed rule.

Key Changes

In addition to making definitional, grammatical and style changes, the rule: (i) clarifies who is the USPPI; (ii) makes changes to mandatory filing requirements; (iii) makes changes to voluntary self-disclosures.  

Who is the USPPI

The U.S. Principal Party in Interest (USPPI) is the person or legal entity in the United States that receives the primary benefit, monetary or otherwise, from an export transaction. The rule clarifies which party is the USPPI when goods are entered into the United States for consumption or warehousing then stored in a warehouse or storage facility, admitted into an FTZ, or entered into a bonded warehouse before exportation. 

When these movements occur prior to exportation, the USPPI may be one of the following: 

• A customs broker
• An operator of the warehouse, storage facility, FTZ, or bonded warehouse 

When the customs broker is the USPPI and supports the preparation or filing of the EEI, the customs broker must have consent from the importer of record to disclose confidential information to third parties. When a warehouse, storage facility, FTZ or bonded warehouse operator is the USPPI, they are responsible for the EEI based on information they have or have received from other parties to the export transaction.

Changes to Filing Requirements

The Rule makes several changes to the mandatory filing requirements for EEI.

The rule clarifies that an EEI filing is not necessary when goods are moving in-transit through the United States, Puerto Rico, or the U.S. Virgin Islands from one country or area to another where goods do not enter the United States for consumption or warehousing.

It also amends the “General Filer Requirements” to clarify that that the filer must be located physically in the United States when filing the EEI, and that the EEI must be filed completely, accurately, and timely.

Voluntary Self-Disclosure

The rule clarifies that foreign persons may not submit a Voluntary Self-Disclosure (VSD) and states that parties will not be deemed to have made a VSD unless the individual making the disclosure did so with the full knowledge and authorization of senior management. The Bureau will not accept a disclosure from a Foreign Principal Party in Interest (FPPI) or legal counsel or other party representing a FPPI.

The rule also amends the Census Bureau’s actions when responding to a VSD. The Bureau is no longer required to notify CBP, Immigrations and Customs Enforcement (ICE), and the Office of Export Enforcement (OEE) of the receipt of the VSD. In addition, the rule relaxes the requirements for the Bureau when issuing a letter in response to a VSD. Instead of issuing a warning letter or letter setting forth corrective measures required, the Bureau may now simply issue a letter.

All importers and exporters involved in in-transit shipments should review the rule and ensure their internal processes and procedures are updated accordingly. Get in touch with Diaz Trade Law to learn more about how this new rule may impact your business: 305-456-3830 and info@diaztradelaw.com.

Learn more:

• Census Proposes Changes to Foreign Trade Regulations Filing Requirements
• Submitting a Voluntary Self-Disclosure to Census
• Webinar: What is Electronic Export Information (EEI) and Why Does it Matter?
• Webinar: Building and Maintaining an Effective Export Compliance Plan

• Elimination of Customs Broker District Permit Fee
  • Section 641 of the Tariff Act of 1930, as amended (19 U.S.C. 1641), provides that individuals and business entities must hold a valid customs broker’s license and permit to transact customs business on behalf of others. The statute also sets forth standards for the issuance of broker licenses and permits; provides for disciplinary action against brokers in the form of suspension or revocation of such licenses and permits or assessment of monetary penalties; and, provides for the assessment of monetary penalties against other persons for conducting customs business without the required broker’s license.
  • On June 5, 2020, U.S. Customs and Border Protection (CBP) published a notice of proposed rulemaking (NPRM) in the Federal Register (85 FR 34549), proposing the elimination of customs broker district permit fees in parts 24 and 111.
  • Consistent with the June 5, 2020, notice, CBP is publishing a final rule to, among other things, eliminate customs broker districts (see ‘‘Modernization of the Customs Broker Regulations’’ RIN 1651–AB16). Specifically, CBP is transitioning all brokers to national permits and expanding the scope of the national permit authority to allow national permit holders to conduct any type of customs business throughout the customs territory of the United States. As a result of the elimination of customs broker districts, CBP is amending in this document the regulations to eliminate customs broker district permit fees.
• Modernization of the Customs Broker Regulations
  • This document adopts as final, with changes, proposed amendments to the U.S. Customs and Border Protection (CBP) regulations modernizing the customs broker regulations. CBP is transitioning all customs brokers to a single national permit and expanding the scope of the national permit authority to allow national permit holders to conduct any type of customs business throughout the customs territory of the United States.
  • To accomplish this, CBP is eliminating broker districts and district permits, which in turn removes the need for the maintenance of district offices, and district permit waivers. CBP is also updating, among other changes, the responsible supervision and control oversight framework, ensuring that customs business is conducted within the United States, and requiring that a customs broker have direct communication with an importer. These changes are designed to enable customs brokers to meet the challenges of the modern operating environment while maintaining a high level of service in customs business.
  • Further, CBP is increasing fees for the broker license application to recover some of the costs associated with the review of customs broker license applications and the necessary vetting of individuals and business entities (i.e., partnerships, associations, and corporations).
  • Additionally, CBP is announcing the deployment of a new online system, the eCBP Portal, for processing broker submissions and electronic payments. Lastly, CBP is publishing a concurrent final rule document to eliminate all references to customs broker district permit user fees (see ‘‘Elimination of Customs Broker District Permit Fee’’ RIN 1515–AE43) to align with the changes made in this final rule document.
  • This final rule is effective December 19, 2022.
• BGH Edelstahl Siegen GmbH v. United States and Ellwood City Forge Company, et al.
  • Before the court was BGH Edelstahl Siegen GmbH’s (“BGH”) Rule 56.2 motion for judgment on the agency record challenging various aspects of the U.S. Department of Commerce’s (“Commerce”) final determination in its countervailing duty (“CVD”) investigation of forged steel fluid end blocks (“Fluid End Blocks”) from the Federal Republic of Germany (“FRG”).
  • BGH challenged Commerce’s Final Results on three grounds, arguing (1) that Commerce improperly initiated its CVD investigation and impermissibly expanded the CVD investigation to include new subsidy programs, (2) failed to include ex-parte communications in the record, and (3) incorrectly determined that seven programs used by BGH during the period of investigation were countervailable subsidies.
  • Defendants argued that Commerce’s decisions to initiate and expand its CVD investigations were in accordance with law because the petition to initiate the CVD investigation “included the relevant laws and policies that provided the countervailable subsidies, tied those facts to the legal framework, and established a reasoned basis to conclude that BGH received subsidy benefits[,]” and that Commerce may consider new subsidy programs uncovered during its investigation.
  • Defendants further argued that the record for the CVD investigation is complete because the ex parte communication that BGH asserts is missing from the record pertained to the antidumping investigation, not the CVD investigation, and therefore need not be included in the record. Finally, Defendants argued that Commerce correctly determined the Contested Programs are countervailable.
  • The CIT held:
    • 1. That Commerce’s Final Results are sustained with respect to the initiation of the CVD investigation, the determination that the administrative record is complete, the determination that the provisions of the Electricity Tax Act and the Energy Tax Act, the EEG and KWKG Reduced Surcharge Programs, the ETS Additional Free Emissions Allowances, and the CO2 Compensation Program are countervailable subsidies, and the determination that Commerce’s calculations for the EEG and KWKG Reduced Surcharge Programs, the ETS Additional Free Emissions Allowances, and the CO2 Compensation Program are supported by substantial evidence;
    • 2. That Commerce’s Final Results are remanded for further explanation or reconsideration consistent with this opinion with respect to its determination that the KAV Program is a specific subsidy;
    • 3. That Commerce’s Final Results are remanded for further explanation or reconsideration consistent with this opinion with respect to its calculations of the CVD rates for the Electricity Tax Act and the Energy Tax Act; and it is further ORDERED that Commerce shall file its remand redetermination with the court within 90 days of this date;
    • 4. That Commerce shall file the administrative record within 14 days of the date of filing of its remand redetermination;
    • 5. That the parties shall file any comments on the remand redetermination within 30 days of the date of filing of the remand determination;
    • 6.That the parties shall have 30 days to file their replies to the comments on the remand redetermination;
    • 7. That the parties shall file the joint appendix within 14 days of the date of filing of responses to the comments on the remand redetermination.
• Keirton USA v. United States
  • Before the court was Keirton USA, Inc.’s (“Keirton”) Rule 12(c) motion for judgment on the pleadings.
  • Keirton challenged CBP’s protest denial arguing possession and importation of the subject merchandise is permissible because Washington State law authorizes the possession and importation of marijuana paraphernalia.
    • Keirton sells Twisted Trimmers to companies in the State of Washington that process marijuana plants.
  • Defendant United States argued that, although Washington State repealed its laws criminalizing possession of marijuana paraphernalia like the Twisted Trimmer, that repeal does not explicitly authorize Keirton to use the subject merchandise to manufacture, possess, or distribute marijuana paraphernalia under Federal law.
  • The CIT held that it is lawful for Keirton to possess and import its merchandise into the state of Washington. Therefore, Keirton’s motion for judgment on the pleadings is granted, and Defendant’s cross-motion for judgment on the pleadings is denied.

UFLPA

The Uyghur Forced Labor Prevention Act (UFLPA) establishes a rebuttable presumption that goods mined, produced, or manufactured wholly or in part in the Xinjiang Province of China or by an entity on the UFLPA Entity List are prohibited from importation into the United States under 19 U.S.C. § 1307. However, if an Importer of Record can demonstrate by clear and convincing evidence that the goods in question were not produced wholly or in part by forced labor, fully respond to all CBP requests for information about goods under CBP review and demonstrate that it has fully complied with the guidance outlined in this strategy, the Commissioner of CBP may grant an exception to the presumption.

Clear and convincing evidence is a higher standard of proof than a preponderance of the evidence, and generally means that a claim or contention is highly probable. See e.g., Colorado v. New Mexico, 467 U.S. 310 (1984) (a forced labor case holding that complainant did not meet “clear and convincing” burden of proof because it failed to show that the evidence is highly and substantially more likely to be true than untrue; rather, the fact finder must be convinced that the contention is highly probable).

CBP will employ a risk-based approach, dynamic in nature, that prioritizes the highest-risk goods based on current data and intelligence. Currently the highest-risk goods include those imported directly from Xinjiang into the United States and from entities on the UFLPA Entity List. CBP will also prioritize illegally transshipped goods with inputs from Xinjiang, as well as goods imported into the United States by entities that, although not located in Xinjiang, are related to an entity in Xinjiang (whether as a parent, subsidiary, or affiliate) and likely to contain inputs from that region.

Below is a list of high-priority sectors for enforcement:

1. Apparel
2. Cotton and Cotton products
3. Silica-Based Products (including polysilicon)

• Silica is a raw material that is used to make aluminum alloys, silicon, and polysilicon, which is then used in buildings, automobiles, petroleum, concrete, glass, ceramics, sealants, electronics, solar panels, and other goods.

4. Tomatoes and downstream products

In addition for general guidance on how CBP will be implementing the UFLPA, please refer to our prior article “Uyghur Forced Labor Prevention Act (UFLPA): What You Need To Know.”

DHS Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced Labor in the PRC.

On June 17, 2022, per statutory requirement , the U.S. Department of Homeland Security (DHS) published the Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced Labor in the People’s Republic of China. The purpose of this publication is to provide guidance as to how the UFLPA will be implemented, and how it plans to prevent the importation of goods made with forced labor to enter into the United States. Below is a summarized guidance for importers with recommendations and guidance as to what evidence importers may provide to rebut the presumption that the goods were made with forced labor under the UFLPA as mentioned by DHS’ June 17, 2022 and earlier guidance published on June, 13, 2022 by CBP  of evidence required. The guidance for importers provided information on three topics:

1) Due Diligence,

2) Supply Chain Tracing, and

3) Supply Chain Management

What does due diligence mean?

DHS stated that for purposes of the guidance, due diligence includes assessing, preventing, and mitigating forced labor risk in the production of goods imported into the United States. An example of effective due diligence, may include the following elements:

• Engage stakeholders and partners
• Conduct a Forced Labor Risk Assessment
• Develop a written code of conduct

To perform a forced labor risk assessment, importers map their supply chains to identify any steps within the chain at risk of using Forced Labor. Such factors used to determine whether a risk exists are, but not limited to:

• Origin of imported goods or any raw materials or components in the imported good.
• Transactions among entities along the supply chain tied to the specific imported goods.
• Locations and identities of entities in the supply chain.

A written code of conduct should provide a framework on how you address the risk of forced labor in you supply chain. In addition, DHS recommends the written code of conduct be incorporated into supplier contracts. We separately recommend that you include your conditions on your purchase order as well.

Importantly, DHS noted that for supply chains that touch the Xinjiang or involve entities that use labor transferred from Xinjiang, the code of conduct MUST explicitly forbid the use of forced labor. Furthermore, as mentioned in our prior DTL post “U.S. Customs Targets Use of Forced Labor ,” importers should review the DOL’s Comply Chain  principles and create a compliance system as a business practice.

What Does it Mean to have an Effective Supply Chain Tracing System?

DHS has defined supply chain tracing, as the ability to demonstrate chain of custody of goods and materials from the beginning of the supply chain to the buyer of the finished product. An effective Supply Chain Tracing system is one that identifies who their suppliers are and labor sources at all levels of the supply chain system. Generally, there are three common practices importers may engage in for effective supply chain tracing:

1. Mapping: Importers should be able to map out their entire supply chain, including suppliers of raw materials used in the production of the imported good or material. Mapping allows the importers to identify who is doing the work at each step in the process of the supply chain and under which conditions the work is being done.
2. Identity preservation: This requires importers to preserve each product input to be packaged, processed, and traced separately from other product inputs or modifications throughout the supply chain. However, under this method product inputs are not allowed to be commingled at any point in the supply chain.
3. Segregation: This approach allows importers to commingle inputs, as long as each input to be commingled is fully traced and documented. It is essential to demonstrate that the inputs are free of forced labor prior to commingling. As an example, importers should have readily available evidence that indicates the source of each component of the good and documents showing how the imported goods was made from raw materials to finished good, by what entity, and where.

Supply Chain Management Measures

Importers should also have Supply Chain Management Measures in place, that reflects the measures taken to prevent and mitigate identified risks of forced labor. DHS identified that effective measures include:

1. Having a process to vet potential suppliers for forced labor prior to entering a contract with them; requiring that supplier contracts necessitate corrective action by the supplier if forced labor is identified in the supply chain; and
2. Outlining the consequences if corrective action is not taken, such as termination of the contractual relationship.
3. Having access to documentation, personnel, and workers for verification of the absence of forced labor indicators, including at the recruitment stage.

DHS noted as well that, under 18 U.S.C. Section 1589 (b), failure to take appropriate remedial action could expose an importer to potential criminal liability if the importer continues to benefit, financially or by receiving anything of value, from participating in a venture engaged in forced labor, while knowing of or recklessly disregarding the forced labor.

For additional guidance as to the type and nature of evidence that CBP will require if the goods are subject to the UFLPA, please refer to the following:

• Xinjiang Supply Chain Business Advisory
• DTL Article: “Importers: If you Can’t Answer these 12 Questions on Forced Labor You’re In Trouble”
• U.S. Department of Labor Sweat & Toil App 

Contact Us

Diaz Trade Law has significant experience in a broad range of import compliance matters including forced labor issues. For assistance with importer due diligence in relation to forced labor requirements; or for assistance in submitting documents to dispute the use of forced labor, contact our Customs and International trade law attorneys at info@diaztradelaw.com or call us at 305-456-3830.

Register today to to hear directly from Senior Trade Advisor, Don Woods, DTL’s president, Jennifer Diaz, and Associate Attorney, Denise Calle as they discuss real life stories, current trends/risks associated with the import process, proactive ways to stay compliant, and the importance of training to avoid costly encounters with CBP.

Why Should I Register for this Webinar?

CBP is actively enforcing its laws and regulations against non-compliant importers, as seen by the 70,683 seizure letters issued to importers in FY2021.  Importers are required to develop, maintain, and follow a compliant import plan. Importers must be aware of CBP’s various enforcement mechanisms, and more importantly,  how to avoid  such actions. CBP’s most common enforcement activities include seizures, detentions, and criminal prosecution.

In response to the increase in enforcement discussed below, Diaz Trade Law is hosting a NEI accredited webinar, Building & Maintaining an Effective Import Compliance Plan to train industry on top compliance tips to avoid enforcement, and best practices to maintain and effective and compliant import plan.

Seizures in FY21:

• With Fy21 yet to finish, the CBP has already had more than 70,000 trade seizures
• With Fy21 yet to finish, CBP has already had $2.5 billion worth of IPR Seizures – More than it has seized in each of the past 5 years!

Other Trade Enforcement Activities:

• 1,942 Trade Penalties Issued
• 16,302 Total Trade Liquidated Damages
• $16 million collected in Trade-related penalties and liquidated damages

In this webinar, you will learn the common risks associated with the import process and how to build and maintain an effective Import Compliance Plan . Presenters will discuss… The objective of the webinar is to teach participants how to create an effective import plan that allows importers to avoid CBP altogether.

Importers, Customs Brokers, Regulatory Affairs Professionals, and others engaged in the importation of goods into the United States are encouraged to attend either live on October 6, 2021 at 12:00 PM, or on demand thereafter. Register Here

All merchandise of foreign origin imported into the United States (U.S.) must generally be marked with its country of origin, and it is subject to a country of origin (COO) determination by CBP. The country of origin of imported goods may be used as a factor to determine eligibility for preferential trade treatment under a free trade agreement.

The country of origin of imported goods is also used to determine non-preferential trade treatment, such as admissibility, marking, and trade relief (310 duties, antidumping and countervailing duties (AD/CVD). CBP uses the “substantial transformation” standard to determine the COO of goods for non-preferential purposes. For a substantial transformation to occur, “a new and different article must emerge, `having a distinctive name, character or use.’” Anheuser-Busch Brewing Ass’n v. United States, 207 U.S. 556, 562 (1908) (quoting Hartranft v. Wiegmann, 121 U.S. 609, 615 (1887)).

CBP applies two different methods to determine if goods have been substantially transformed – even though both are intended to produce the same origin determinations:

1. Case-by-case decision based on court decision and CBP rulings (often criticized because of the varied case-specific interpretations of the basic rule that has resulted in a lack of predictability and increased uncertainty both within CBP and in the trade community). Using this method, the effect of a particular type of processing could have on impact on  origin determination.
2. Rules of Origin in 19 CFR 102 – these rules are included in the Harmonized Tariff Schedule of the U.S. (HTSUS) under General Notes and are often referred to as the “change in tariff classification” or “tariff shift” method.

Prior to the USMCA, under the NAFTA, COO marking determinations were made using the NAFTA marking rules codified in 19 CFR 102, to determine if substantial transformation existed when a good imported from Canada or Mexico (was not entirely of Canadian or Mexican origin). The 102 rules helped determine whether or not goods were substantially transformed through processes that resulted in changes in the tariff classification (i.e., tariff shifts) in Canada or Mexico. To determine the country of origin of goods imported from Canada or Mexico for other non-preferential purposes (i.e., purposes other than marking), CBP employed case-by-case adjudication to determine whether such goods were substantially transformed in those NAFTA countries. These different non-preferential country of origin-determination methods required some importers to determine and declare two different countries of origin for the same imported good!

The Current Problem with COO Determinations Under USMCA

Importers from Canada and Mexico are subject to two different non-preferential origin determinations for imported merchandise:

• One for marking; and,
• Another for determining origin for other purposes (e.g., 310 duties, AD/CVD).

Consequently, these importers must also potentially comply with requirements to declare two different countries of origin for the same imported good (e.g., Canada and China, forcing the import to also tender the additional 301 duties, but, also take advantage of the FTA not having to pay regular duties). This is not only a burden, but, also quite confusing, creating inconsistency, and vastly reduces transparency.

CBP’s Proposed Solution

CBP is proposing to amend the scope provision in 19 CFR 102 by adding new language to apply the substantial transformation standard consistently across country-of-origin determinations CBP makes for imported goods from the USMCA countries of Canada and Mexico for non-preferential purposes. With this regulatory change, all non-preferential country of origin determinations by CBP for goods imported from Canada or Mexico would be based on the tariff shift rules in 19 CFR part 102.

Since importers must exercise reasonable care in determining the country of origin of their goods and may seek advice from CBP to determine the country of origin for their goods for preferential and/or non-preferential purposes; the proposed solution means CBP will no longer need to issue CBP rulings with non-preferential origin determinations for goods imported from Canada or Mexico, and there would no longer be rulings that conclude that a good imported from Canada or Mexico has two different origins under the USMCA (i.e., one for marking and one for other, customs non-preferential purposes).

CBP is proposing these changes to simplify and standardize country of origin determinations by CBP for all non-preferential purposes for goods imported from Canada or Mexico.

Comment Opportunity

Interested persons are invited to comment on the proposed rule by submitting written data, views, or arguments on all aspects of the proposed rule. CBP is seeking comments related to the economic, environmental, or federalism effects that might result from this proposed rule.

Deadline: Comments must be received on or before September 7, 2021 (extended from August 5, 2021).

Impacted Parties

Certain Canadian and Mexican importers are directly affected by the proposed change. In fiscal year (FY) 2019, 38,832 importers made 2.6 million non-NAFTA-preference entries. All of these entries were subject to non-preferential country of origin marking requirements, and some were also subject to trade remedies, that involve case-by-case adjudication. Around the same time, in FY 2020 and the start of FY 2021, CBP issued 52 rulings determining the origin of goods imported from Canada and Mexico for non-preferential purposes. These rulings, except for those involving the importation of certain textile and apparel products, were issued on a case-by-case basis to determine whether such goods were substantially transformed in Canada or Mexico or another country.

Impact on other Free Trade Agreements

While the Federal Register Notice (86 FR 35422) announcing the proposed rule and requesting comments from trade is focused on USMCA, this may be the future for all FTAs. The  Federal Register Notice makes clear that  19 CFR 102 was established to promulgate the U.S.’s responsibilities under the North American Free Trade Agreement (NAFTA); however, thereafter, 19 CFR 102 has been extended to apply to numerous other FTAs as CBP has found them to be reliable, simplified, and standardized method to determining the COO of a good. Specifically, 19 CFR §§ 102.21 through 102.25, are also to be used by CBP to determine the COO of textile and apparel products (imported from all countries except Israel).

As we learn more, we will keep you up to date on whether this change will also be adopted for FTAs that are silent as to how the country of origin should be determined for marking and other non-preferential purposes.

Contact Us

Jennifer Diaz and Denise Calle have extensive expertise on FTA’s and in preparing and submitting comments for federal rulemaking. Please reach out to our trade attorneys to prepare and submit your comments to CBP. If you would like more information on this issue, contact Diaz Trade Law at info@diaztradelaw.com and 305-456-3830.

Co-Authored by Jen Diaz & Denise Calle

The Florida Customs Brokers & Forwarders Association (FCBF) encourages all custom brokers, patent, trademark and all international trade professional to join its Intellectual Property Rights (IPR) with U.S. Customs and Border Protection (CBP) and UL. This one-hour webinar will give custom brokers, importers, and all other international trade professionals the ability to learn and understand CBP’s IPR customs and enforcement. 

This webinar will be Friday, September 3, 2021 at 11:30 AM EST.  

Register Now! 

Importers, Manufacturers and Customs Brokers, and others interested in CBP and IPR matters, regardless of affiliation or membership, are invited and encouraged to attend. Learn what customs brokers and importers need to know about UL and the increased safety risk associated with counterfeit products. The webinar will cover: 

• Overview of CBP’s IPR enforcement regime
• Timeframes followed by CBP in suspected IPR violations
• Information CBP is authorized to share with the broker
• Examples of notices and most pertinent information therein
• CBP’s perspective on gray market shipments
• How brokers can be proactive to limit the time flagged shipments are detained
• Best contacts at CBP for any IPR-related inquiries
• Programs available to the trade community

Learn more about our speakers:

President and Founder of Diaz Trade Law, Jennifer (Jen) Diaz is a Chambers ranked, Board Certified International Attorney specializing in customs and international trade. For more than 15 years, Jen has provided legal advice and customized training on import and export compliance to industry, with a strong record of success in mitigating federal administrative enforcement actions. 

Jen has received many accolades from the legal community, including being recognized by “Super Lawyers” as a Top International Attorney, having an AV rating of “Superb,” and serving as President of the Organization of Women in International Trade (2018-2019). 

A frequent media commentator, Jen has authored book chapters, journal articles, and other articles for The Florida Bar, the American Bar Association, Bloomberg Law, and others. Jen is Editor of “Customs & International Trade Law,” a blog recognized by the U.S. Library of Congress as being an important part of the legal historical record. 

Alaina van Horn currently serves as the Chief of the Intellectual Property Rights Branch of U.S. Customs and Border Protection, Office of Trade, where she supervises a team of attorneys and paralegals specializing in border enforcement of intellectual property rights. Prior to this position she served a one year detail in the Office of the U.S. Intellectual Property Enforcement Coordinator (IPEC) in the Executive Office of the President, as a Policy Advisor specializing in customs law. Prior to joining the IPEC she was a Senior Attorney-Advisor in the Intellectual Property Rights Branch of CBP’s Office of Trade for over a decade, where she provided legal support to all ports of entry on border enforcement of trademarks and copyrights, adjudicated administrative petition for relief from seizure, issued binding rulings and infringement determinations, and administered patent and trade secrets based exclusion orders issued by the U.S. International Trade Commission. Ms. van Horn has conducted numerous capacity building trainings on border enforcement of intellectual property rights to foreign governments, international organizations, and domestic audiences in both the public and private sectors.

Lisa Deere has over 20 years’ experience in Intellectual Property, Anti-Counterfeiting, and prosecution. In late 2017 Lisa joined the Global Security and Brand Protection team of UL LLC (Underwriters Laboratories) as a Brand Protection Manager overseeing the United States and Canada.

Prior to joining UL, Lisa was responsible for the enforcement program at Conair Corporation where she launched the Anti-Counterfeiting program, initially with just

the US market, and eventually expanded the program globally.

Lisa’s IP career began while working for a major US charity. During her tenure with the charity, she worked closely with in-house counsel to build an international trademark portfolio, aggressively protected the brand through online enforcement, and assisted in defending against misuse of the charity’s well-respected name.

Lisa is actively involved in several Anti-Counterfeiting organization, including the International Anticounterfeiting Coalition (IACC), the International Trademark Association (INTA), and the Canadian Anti-Counterfeiting Network (CACN). She has served two terms as a member of INTA’s Anti-Counterfeiting committee, numerous terms on the INTA Round Table Subcommittee, and is currently serving as Vice Chair of the CACN Steering Committee. Lisa is a frequent moderator and roundtable host, and often speaks on the topic of health & safety issues related to counterfeit electronics.

REGISTER TODAY!

Join us IN PERSON in Baltimore, MD, July 26-27, 2021. NCBFAA NEI and hotel staff will be complying with all state and venue COVID-19 protocols so you can feel safe attending the event! Virtual attendance is available, so you can gain knowledge from anywhere!

REGISTER TODAY!

All trade professionals, regardless of membership or affiliation, are invited to join to:

• Learn from industry subject matter experts on today’s pressing matters
• Get an opportunity to voice your questions to federal, state and industry experts about the latest issues affecting your business
• Acquire fresh ideas by networking with business colleagues while meeting new people

Diaz Trade Law is enthusiastic to announce that our President, Jennifer Diaz will be a featured speaker alongside Adrienne Braumiller on the topic “Update on CBP Enforcement Efforts: IPR, Section 301, 232, AD/CVD” taking place on July 27th from 9:00 am to 10:30 am EST.

As we all know, Intellectual Property Rights, AD/CVD, Section 301 and 232 are all things on CBP’s priority list for enforcement. What do you have in place to make sure you are complying with the regulations? What have you done to assure yourself that your imports are not affected by the rules, and if they are, how you are managing the additional complexity of these movements?

Learn More About Jen Diaz!

President and Founder of Diaz Trade Law, Jennifer (Jen) Diaz is a Chambers ranked, Board Certified International Attorney specializing in customs and international trade. For more than 15 years, Jen has provided legal advice and customized training on import and export compliance to industry, with a strong record of success in mitigating federal administrative enforcement actions.

Jen has received many accolades from the legal community, including being recognized by “Super Lawyers” as a Top International Attorney, having an AV rating of “Superb,” and serving as President of the Organization of Women in International Trade (2018-2019).

A frequent media commentator, Jen has authored book chapters, journal articles, and other articles for The Florida Bar, the American Bar Association, Bloomberg Law, and others. Jen is Editor of “Customs & International Trade Law,” a blog recognized by the U.S. Library of Congress as being an important part of the legal historical record.

REGISTER TODAY!

Whether you are new to importing or seasoned, this one-hour webinar is a must attend. Register today to hear directly from this specialized, expert trio on the “Top 10 Tips When Importing to Ensure Compliance” with real case studies:

• President and Founder of Diaz Trade Law, Jennifer (Jen) Diaz is a Chambers ranked, Board Certified International Attorney specializing in customs and international trade,
• Trade Advisor at Diaz Trade Law, Donald Woods has worked in the express delivery, freight forwarding, and logistics industries for 34 years in both imports and exports. He retired from UPS after 34 years of service as the VP, Customs & Trade Compliance for the Customs Brokerage business unit.
• Associate Attorney of Diaz Trade Law, Denise Calle assists U.S. and foreign manufacturers, distributors, and importers, with a range of import compliance, regulatory compliance, and enforcement matters involving U.S. Customs.

This one-hour webinar describes the importer’s role as the responsible party for an import transaction. Our speakers will discuss how to comply with U.S. Customs and Border Protection’s (CBP) vast laws and regulations. By the end of the webinar, you will know and understand the importance of tariff classification, customs valuation, country of origin marking, intellectual property rights and free trade agreements.

You will also learn basic customs concepts and terms like CBP Form 7501, CBP 28, CBP 29, protests, detention and seizure cases, liquidated damage claims, penalties/fines, prior disclosures, and the FP&F process. Additionally, you will learn the top 10 tips when importing to ensure compliance. This webinar will provide valuable assistance to all importers, customs brokers, and all trade professionals.

In This Webinar You Will Learn:

• Importance of CBP Rulings for Classification, Valuation and Country of Origin.
• Cost Savings practices like utilizing Free Trade Agreements.
• Importance of protecting intellectual property rights.
• Basic customs concepts and terms.
• Top tips to proactively work with your Customs Broker.
• What to do if you encounter a CBP detention and/or seizure case Learn when to submit a prior disclosure to CBP Top 10 tips when importing to ensure compliance.
• Learn key best practices and hear real life case studies.
• Learn what to do, and more importantly, what NOT to do, and what the consequences are for non-compliance.

Who should attend:

• Importers
• Customs Brokers
• Regulatory Affairs Professionals
• In-house Legal Counsel
• Product Development Managers
• Other Trade Members

This webinar is eligible for continuing education credit from the NCBFAA Educational Institute. Space is limited, registration required! Access instructions will be provided after your registration is complete. Don’t just take our word for how awesome Diaz Trade Law webinars are. Click here to see what our past attendees had to say. Be sure to join us on May 5, 2021!

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Background

Section 641 of the Tariff Act of 1930 provides that individuals and business entities must hold a valid customs broker’s license and permit to transact customs business on behalf of others. The statute also sets forth standards for the issuance of broker licenses and permits; provides for disciplinary action against brokers in the form of suspension or revocation of such licenses and permits; and provides for the assessment of monetary penalties against other persons for conducting customs business without the required broker’s license. Section 641 also authorized the Secretary of the 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.

Under 19 U.S.C. 1641(b)(4), a customs broker has the statutory duty to exercise responsible supervision and control over the customs business that he or she conducts. Maintaining current knowledge and competence is an inherent part of the statutory duty of the customs broker. A customs broker reasonably can be expected to uphold such responsible supervision over his or her employees and control over his or her customs business only by acquiring and maintaining the knowledge of customs and related laws.

The U.S. Customs and Border Protection (“CBP”) is responsible for administering licensing for customs brokers. All prospective customs brokers must pass a broker exam prepared by CBP, which is designed to determine the individual’s knowledge of customs and related laws, regulations and procedures, bookkeeping, accounting, and all other appropriate matters necessary to render valuable service to importers and exporters. After passing the customs broker exam, CBP investigates whether an applicant is qualified for a broker’s license, taking into account information provided by the applicant and other aspects pertaining to the applicant such as his or her business integrity. Following the issuance of a license, a broker administratively maintains a license primarily through the payment of fees and the submissions of reports and notifications required by 19 CFR 111.30.

While the broker exam provides a good initial indication of an applicant’s knowledge, it is, by necessity, limited in scope. The broker exam only captures a state of customs and related laws at a certain point in time and a person’s knowledge of such laws at a single point in time. The broker exam also does not test for any of the requirements of the approximately 50 Partner Government Agencies (“PGAs”) involved in regulating imports and exports. The complex nature of trade and the ever-changing and expanding requirements to comply with U.S. and international law require that a customs broker maintain a high level of functional and accessible knowledge to stay efficient and compliant over time.

U.S. Customs Considering Continuing Education Requirements

CBP is considering the promulgation of regulations to create a framework of continuing education requirements in order to maintain a high standard of professionalism in the customs broker industry. CBP’s goal with the publication of this advanced notice of proposed rulemaking (“ANPRM”) is to gather information and data from the broker industry in order to analyze and identify information that would help CBP in considering whether, and if so what type of, mandatory requirements would be beneficial for the trade community and CBP. CBP believes that requiring customs brokers to take continuing education courses would enhance the credibility and value of a customs broker’s license and improve a broker’s skills, performance, and productivity. CBP also believes that this would increase client service and compliance with the customs laws, which would protect the revenue of the United States and the trade community.

CBP believes that the vigorous pace and expanding scope of international trade require a more stringent continuing education framework for those individuals involved in the international trade process. Regular continuing education is a professional requirement for many dynamic professions, such as the accounting, legal, and medical industries. CBP believes that maintaining a high level of professionalism of the licensed customs broker is essential for safety, security, efficiency, and trade compliance.

Public Comments Requested

Based on CBP’s proposed rules published on the Federal Register notice, CBP seeks public comment on one or more of the following questions:

• How many hours of continuing education would be required?

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

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

Question 2. In addition to the opportunities offered by CBP and other government agencies as mentioned above, are you aware of other training or coursework that would likely qualify for a continuing education requirement? Please describe those opportunities in detail.

Question 3. Are you part of a brokerage or a company that employs licensed customs brokers? Please provide or describe any training materials or training policies that the company has that would likely qualify as continuing education for a licensed customs broker. If you do provide any training materials or training policies and deem any of the content to be confidential commercial information under 6 CFR 5.7, please submit your materials only as a written/paper submission as listed in the ADDRESSES section above. Please estimate the costs of providing this training on an annual basis.

Question 4. Are you a broker in a small business or do you live/work in a remote area of the country? Would you be able to avail yourself of internet-based training, webinars, or in-person trainings offered by a third party in order to meet a mandatory training requirement?

Question 5. Do you believe you would already meet the possible continuing education requirement (40 hours over 3 years) based on the activities you may be already engaged in that you believe would qualify as continuing education?

• Does all continuing education have to relate to international trade?

Question 6. If a continuing education requirement is established, should there be different categories, and if so, how should those be weighted? For example, should continuing education be categorized as “CBP procedures and requirements”, “other government agency requirements”, and “specific areas related to international trade”, and should there be a certain number of courses within each category that must be taken?

• Do all brokers need to comply with continuing education requirements?

Question 7. Are there any categories of individuals holding licenses whom you feel CBP should exempt from the continuing education requirement?

• How should continuing education be tracked?

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

• How should completed education be reported to CBP?

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

• What happens if continuing education is not reported to CBP?

Question 10. What do you think is an appropriate disciplinary action for failing to complete a continuing education requirement?

Question 11. Is linking the reporting of the continuing education requirement to the individual license triennial report the most efficient way to communicate compliance without placing undue burden on customs brokers? If not, what alternative means would you recommend and why?

Question 12. Is 120 days to take corrective action to obtain the necessary continuing education credits a reasonable period of time? Please explain in your response why you believe the time period should be shorter or longer.

Question 13. What do you think is an appropriate disciplinary action for failing to report a customs broker’s compliance with a continuing education requirement?

• Should continuing education requirements apply during voluntary suspension?

Question 14. Should customs brokers with their licenses in voluntary suspension be required to meet the continuing education mandate while their licenses are in suspension?

Question 15. Should customs brokers with their licenses in voluntary suspension be required to meet the continuing education mandate before their licenses can be reactivated?

Question 16. Should customs brokers, who have been voluntarily suspended, be required to complete a certain number of continuing education credits the first year after re-activation, and if so, how many?

Question 17. Should CBP differentiate the reactivation requirements based on the nature of the suspension, i.e., a voluntary suspension versus involuntary suspension? If so, how, and why?

• What could the accreditation process look like?

Question 18. Should informational content that CBP currently provides (webinars, local and national events, industry trade days, etc.) automatically be considered eligible for credit toward a mandatory education requirement?

Question 19. Should CBP require accreditation? Why or why not? If yes, should CBP create a framework to accredit education provided by non-government entities?

Question 20. Would an established accreditation process help control the quality of the content of the various activities that would be eligible for continued education credit?

Question 21. Should CBP pursue a formal accreditation program with a third-party accreditor, or should CBP be the accrediting party?

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

Question 23. Is the above list of criteria to become an approved accreditor of continuing education reasonable? Should additional criteria be added?

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

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

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

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

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

• Costs and Benefits of a Future Rule

Question 29. To what extent do you as a customs broker or employer of brokers already satisfy the potential requirements (40 hours over 3 years) voluntarily or via company policy? Do you believe this is representative of the customs broker industry as a whole? Why or why not? Please provide examples of how you already fulfill the potential requirements.

Question 30. What is the number of hours currently spent on training in total by you as a customs broker or by customs brokers employed by you in an average year?

Question 31. Of the existing training options for customs brokers, how many hours are supplied in-house by employers of customs brokers, externally by Federal Government agencies, and by third-party providers, in an average year? What types of training options are you as a customs broker taking advantage of?

Question 32. Is the training for customs brokers that you provide or consume general, specific to a particular topic, or does it vary depending on the current work environment?

Question 33. Are the trainings for customs brokers that are currently provided accredited by some organization? If so, please provide the names of the organizations that accredit the trainings.

Question 34. Do employers and employees find these trainings for customs brokers to be beneficial? If yes, can you provide any examples of when training may have prevented or mitigated a negative outcome in a trade process? If no, can you explain how you as a customs broker or employer of customs brokers currently keep abreast of the ever-changing and expanding requirements to comply with U.S. and international law and other knowledge to stay efficient and compliant over time?

Question 35. If you are an employer of customs brokers, and the continuing education requirement were to be put in place, would you continue your current approach to education or make changes? If you would change, please explain the changes you might make and if you would increase or decrease the use of in-house, third-party, or Federal Government-produced sources of training?

Question 36. How often do you as a customs broker or employer of customs brokers currently attend events requiring travel, and how would a possible continuing education requirement affect the amount of travel, for you or your company?

Question 37. Can you provide information on the benefits and efficacy of mandatory continuing education for customs brokers and free trainings provided by CBP and other PGAs?

Question 38. In general, how often do you as a customs broker or your customs broker employees take advantage of these government-provided training resources?

Question 39. If you are considered a small business, what would the impacts be to your company of the potential continuing education framework for customs brokers?

Question 40. Should small businesses that struggle to meet continuing education requirements for customs brokers, due to new costs, receive accommodations in the form of discounts or exemptions?

Question 41. What types of costs do you or your company incur to maintain records of the completion of employee trainings? How high are these costs? If you or your company does not currently maintain training records, what types of costs would you incur to do so?

Question 42. If you are an individually-licensed customs broker, what would you consider reasonable costs per hour of continuing education, if you had to pay out of your own pocket? Would you take more trainings if the cost were discounted for small businesses?

• Potential Costs of a Future Rule

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

• Potential Benefits of a Future Rule

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

Contact Us

Diaz Trade Law has extensive expertise on customs broker licensing matters and in preparing and submitting comments for rulemaking. Please reach out to us if you would like to submit comments to CBP informing the agency of your business’ recommendations for continuing education for licensed customs brokers. Comments are due December 28, 2020. Diaz Trade Law can be reached at info@diaztradelaw.com and 305-456-3830.