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Federal Register / Vol. 86, No. 173 / Friday, September 10, 2021 / Proposed Rules
requirements. For example, the Trade Facilitation and Trade Enforcement Act of 2015 TFTEA Pub. L. 114125, 130
Stat. 122, February 24, 2016 required the issuance of new rules to protect domestic industry from dumping by foreign competitors 19 CFR part 165
and to modernize the processes surrounding duty refunds through the drawback program 19 CFR part 190.
Both of these rules are complicated and detailed, requiring entities involved in international tradeparticularly, customs brokers serving as the fiduciary agents of the affected importers and drawback claimantsto learn entirely new legal and technical processes. In addition to understanding the implementation of new regulations, a customs broker also needs to know how to research answers to complex questions. For example, determining the country of origin of imported merchandise is much less straightforward than it was in the past, as traders source inputs from various countries and may assemble those inputs in yet another country before a final product is fully manufactured or produced.
The past several years, in particular, have posed challenges for both CBP and entities involved in international trade, requiring quick adaption to new requirements that compelled changes to operational processes. Low-value shipments 19 U.S.C. 1321a2C, the volume of which has exploded with the increase in the de minimis limit from $200 to $800 as a result of section 901c of TFTEA and the online shopping revolution, have created multiple levels of issues for international trade that implicate security, health, safety, information collection, timely clearance, and duty evasion. The 2020 statutory implementation of the Agreement between the United States of America, the United Mexican States and Canada the USMCA, which replaced the North American Free Trade Agreement NAFTA, requires a new body of knowledge to successfully implement and maintain compliance. See United States-Mexico-Canada Agreement Implementation Act, Public Law 116
113, 134 Stat. 11 19 U.S.C. Chapter 29.
The ongoing COVID19 pandemic created an unprecedented impact on supply chains and international trade processes.
The customs broker is at the heart of the aforementioned challenges, as the agent of the importer/drawback claimant who works with CBP to resolve problems and facilitate the safe and secure movement of legitimate cargo.
CBP believes that the complex and evolving nature of international trade
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requires a mandatory continuing education framework for individual brokers involved in these trade processes. Simply relying on selfinitiated efforts to maintain current knowledge is insufficient to ensure compliance with the wide array of applicable and evolving laws that is necessary to protect the revenue of the United States. Brokers who were assessed penalties by CBP between 2017
and 2020 have held their individual broker license for, on average, 37 years.
In contrast, the average individual customs broker license has been held for just 24 years. This suggests that as more time passes since the passing of the customs broker exam, more errors are made. Additionally, as addressed in greater detail in section V.A. of this NPRM, which pertains to the requirements of Executive Orders 13563
and 12866, CBP has seen a recent increase in penalties while data indicates that companies employing individual brokers who voluntarily pursue continuing education in the form of industry certifications generally commit fewer errors.
Regular continuing education is a professional requirement for many dynamic professions, such as in the accounting, legal, and medical industries. The Internal Revenue Service IRS, for example, has regulations covering tax professionals that include both an examination and a continuing education requirement. See 31 CFR part 10. These regulations were based, in part, on the Return Preparer Review report January 4, 2010, which recommended continuing education for tax preparers to better leverage the tax return preparer community with the twin goals of increasing taxpayer compliance and ensuring uniform and high ethical standards of conduct for tax preparers. 2 The IRS serves as the primary revenue collector of the U.S.
Government and has a responsibility for protecting the revenue of the United States. Similarly, CBP is the second largest collector of revenue in the federal government, in the form of duties, taxes, and fees for imported merchandise, and likewise has a responsibility for protecting the revenue of the United States.
As CBP licenses customs brokers to conduct customs business, it is in the best interests of CBP and the PGAs to have a well-educated customs broker community. A customs brokers involvement in import and/or drawback 2 Internal Revenue Service, U.S. Department of the Treasury, Return Preparer Review, IRS
Publication No. 4832 January 4, 2010, available at https www.irs.gov/pub/irs-news/fs-10-01.pdf.

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transactions eases the burden of the government; the customs broker takes on a large part of the role of educating importers and drawback claimants on the technical requirements of filing in the Automated Broker Interface ABI 3
and informing them of regulatory requirements for the customs transactions in which they are involved.
While there are some self-filers, the vast majority of entries of imported merchandise are filed by customs brokers on behalf of the importers of record. This dynamic generally allows CBP to target a smaller group of individuals when managing trade compliance for revised or new filing requirements. Thus, a customs broker community that continues to stay abreast of changes in the customs practice helps support CBPs crucial work. As the quality of such brokerage services suffers, this would cause CBP
to expend additional resources to assist entities involved in international trade with navigating complex import and drawback requirements, which diverts limited resources away from other critical aspects of CBPs trade mission.
To ameliorate that consequence, CBP
proposes to require customs brokers to maintain their knowledge and skills through the completion of continuing customs broker education.
Importers and drawback claimants also benefit from well-educated customs brokers who are aware of current requirements in the complex and evolving realm of international trade.
When an importer or drawback claimant enlists the services of a customs broker, that customs broker is perceived to be knowledgeable of customs laws, regulations, and operational processes;
however, an importer or drawback claimant does not know with certainty that the customs broker is in fact knowledgeable of all newly emerging requirements. The continuing broker education requirement would provide importers and drawback claimants with greater assurance that their agents are knowledgeable of customs laws and regulations, familiar with operational processes, and can properly exercise a brokers fiduciary duties.
In recent years, the need for continuing broker education has also attracted the attention of international intergovernmental organizations, such as the World Customs Organization 3 The Automated Broker Interface ABI is an electronic data interchange that allows brokers and entry filers self-filers to transmit immediate delivery, entry, and entry summary data electronically to, and receive electronic messaging from, CBP in the Automated Commercial Environment ACE. See 19 CFR 143.1 and 143.32a.

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