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Federal Register / Vol. 86, No. 173 / Friday, September 10, 2021 / Proposed Rules
continuing education credit, without the approval by a CBP-selected accreditor.41

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iv. Performance Improvement Once brokers have passed the broker exam, thereby proving their basic knowledge and competency to perform the duties of a licensed customs broker at the time of the exam, they are free to practice in perpetuity unless the license is suspended or revoked. Statute dictates that while practicing under the auspices of his or her broker license, a customs broker must maintain responsible supervision and control.42
CBPs regulations likewise place additional legal obligations upon customs brokers, including, but not limited to, the requirement for exercising due diligence in making financial settlements, answering correspondence, and preparing or assisting in the preparation and filing of information relating to customs business.43 Staying current on developments in customs law is needed for customs brokers to comply with their legal obligations, but presently there are no standards for how much continuing education is needed.
Under baseline conditions, meaning the world as it is now, CBP does not require brokers to complete any additional training or prove their ongoing knowledge. The broker exam only attests knowledge of customs and related laws that are in place at the time of the exam. While the exam ensures that brokers have a solid base level of knowledge when they begin practicing, there is no requirement that they keep up the knowledge, and evidence suggests that as more time passes since brokers took their exam, the more errors they make. Brokers who were assessed penalties by CBP between 2017 and 2020 have held their individual broker license for, on average, 37 years. In contrast, the average individual broker license is 24 years old. This suggests that as more time passes since the passing of the customs broker exam, more errors are made. Furthermore, the exam does not test for any of the requirements of the more than 40 PGAs 41 Per proposed 111.103a1i, a training or educational activity offered by a U.S. Government agency other than CBP must be relevant to customs business.
42 See 19 U.S.C. 1641b4.
43 See 19 CFR 111.29a, and 19 CFR part 111
generally for additional obligations.

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involved in regulating imports.
Depending on the brokers needs, CBP
believes that continuing education should also include courses relating to the PGAs international trade requirements, although there is no minimum requirement for certain subject matters in this proposed rule.
Given the often fast-paced and evolving nature of the international trade environment, CBP believes that a continuing education requirement would help to ensure that brokers remain current with their understanding of international trade laws and continue to expand their knowledge of customs regulations and practices. A more competent and educated customs broker community would also prevent costly errors, potentially saving brokers clients time and money, as well as relieving CBP from expending valuable audit and penalty assessment and collection resources.
3. Overview of Assessment The proposed rule would result in costs and benefits for customs brokers, accreditors, providers of continuing education, and CBP. Many of the costs for brokers come in the form of time spent researching, registering for, attending, and reporting trainings.
Brokers would also experience some opportunity cost as they forgo time spent on other tasks in favor of fulfilling a continuing education requirement.
Accreditors must apply to CBP. Though CBP would not charge a fee, the accreditors would need to spend time in creating their applications. Similarly, providers of continuing education must apply to accreditors to have their coursework certified. Finally, CBP must designate accreditors, and, following the full implementation of the proposed framework, CBP may audit individual brokers for compliance.
The benefits from the proposed rule would be largely qualitative. A
continuing education requirement would help to professionalize and improve the reputation of the customs broker community, as well as to improve customer service and outcomes. Quantitatively, continuing education would likely lead to a reduction in errors in documentation and associated penalties assessed by CBP for some infractions and violations.
Not only would individual brokers not need to pay the associated penalties, but
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CBP would save the time of identifying, assessing, and collecting such penalties.
Similarly, CBP would likely see a reduction in regulatory audits of individual brokers.
4. Historical and Projected Populations Affected by the Rule The proposed rule applies to any individual holding an active customs broker license.44 Brokers who have voluntarily suspended their licenses are not required to complete continuing education until they elect to reactivate their license, at which point the requirements are pro-rated depending upon the timing within the triennial reporting cycle. Brokers who have not held their license for an entire triennial period at the time their first triennial report is due are also exempted from completing training and reporting in their first triennial report, though are bound by the terms of the proposed rule in the following years. As of 2021, there are 13,822 active, individual broker licenses.45 Because 2021 is a reporting year and triennial reports are due in February, those brokers who receive their licenses in 2021, 2022, and 2023
will only be required to complete continuing education beginning on February 1, 2024, the next reporting year.46 Similarly, brokers who receive licenses in 2024, 2025, and 2026 would not need to pursue continuing education until after their first report is due in 2027.
CBP approves approximately 600 new licenses per year, although the number of licenses added annually has been decreasing since 2015. See Table 2 for a summary of licensing history for the previous six years.
44 Entities holding corporate, association, or partnership licenses must employ at least one individual broker, who would be required to comply with the rule. See 19 CFR 111.11a and b.
45 2021 is triennial reporting year. The CBP
Broker Management Branch anticipates that the number of active, individual customs brokers could decrease by approximately 6001,000 in MayJuly of 2021 as brokers choose not to renew or to voluntarily suspend their licenses. This number would be partially offset by new, individual customs brokers applying for licenses after passing the broker exam, which is held bi-annually.
46 Triennial reports are due in February.
Therefore, all those brokers who receive licenses in 2021, 2022, and 2023 will submit their first triennial reports in February of 2024 and would then need to complete 36 hours of training before the triennial report is due in February of 2027.

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