[Federal Register: August 26, 2010 (Volume 75, Number 165)]
[Rules and Regulations]
[Page 52456-52458]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26au10-6]
[[Page 52456]]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
19 CFR Part 111
[USCBP-2008-0059; CBP Dec. 10-28]
RIN 1651-AA74
Customs Broker License Examination Individual Eligibility
Requirements
AGENCY: Customs and Border Protection, Department of Homeland Security.
ACTION: Final rule.
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SUMMARY: This final rule adopts, with one modification, proposed
changes U.S. Customs and Border Protection (CBP) regulations regarding
the requirements that an individual must satisfy in order to take the
written examination for an individual customs broker's license, which
is administered by CBP. Under this final rule, in order to be eligible
to take the examination, an individual must on the date of examination
be a citizen of the United States who has attained the age of 18 years
and who is not an officer or employee of the U.S. Government. These
changes will facilitate the overall licensing process by enabling
individuals who have attained the age of 18 to take the examination in
order to gain valuable experience while ensuring they would not be
precluded from obtaining a license upon turning 21 because of
citizenship or employment status.
DATES: Effective Date: This final rule is effective on September 27,
2010.
FOR FURTHER INFORMATION CONTACT: Anita Harris, Chief, Broker Compliance
Branch, Office of International Trade, (202) 863-6069.
SUPPLEMENTARY INFORMATION:
Background
Section 641 of the Tariff Act of 1930, as amended (19 U.S.C. 1641),
provides that a person (an individual, corporation, association, or
partnership) must hold a valid customs broker's license and permit in
order to transact customs business on behalf of others, sets forth
standards for the issuance of broker's licenses and permits, and
provides for the taking of disciplinary action against brokers that
have engaged in specified types of infractions. In the case of an
applicant for an individual broker's license, section 641 states that
the Secretary of the Treasury may conduct an examination to determine
such applicant's qualifications for a license. Section 641 also
authorizes the Secretary of the Treasury to prescribe rules and
regulations relating to the customs business of brokers as necessary to
protect importers and the revenue of the United States and to carry out
the provisions of section 641.
The Homeland Security Act of 2002, 6 U.S.C. 101 et seq., Public Law
107-296 (Nov. 25, 2002) (the ``HSA'') established the Department of
Homeland Security (DHS) and transferred the U.S. Customs Service from
the Department of the Treasury to DHS, effective March 1, 2003. Section
1502 of the HSA renamed the ``Customs Service'' as the ``Bureau of
Customs and Border Protection,'' which has since been renamed U.S.
Customs and Border Protection (CBP). See 72 FR 20131 (April 23, 2007)
and 75 FR 12445 (March 16, 2010).
Treasury Department Order No. 100-16 (see Appendix to 19 CFR Part
0) delegates to DHS the authority to prescribe the rules and
regulations relating to customs brokers.
The regulations issued under the authority of section 641 are set
forth in part 111 of title 19 of the Code of Federal Regulations (19
CFR part 111). Part 111 includes detailed rules regarding the licensing
of, and granting of permits to, persons desiring to transact customs
business as customs brokers. These rules include the qualifications
required of applicants and the procedures for applying for licenses and
permits. Section 111.11 (19 CFR 111.11) sets forth the basic
requirements for obtaining a broker's license. Paragraphs (a)(1)
through (a)(4) of Sec. 111.11 provide that, in order to obtain a
customs broker's license, an individual must: Be a citizen of the
United States upon applying for the license and not an officer or
employee of the United States; attain the age of 21 prior to the date
of application for such license; Be of good moral character; and,
obtain a passing grade on the written examination within a 3-year
period before submission of the application.
The regulations relating to the written examination for an
individual customs broker's license are set forth in Sec. 111.13 (19
CFR 111.13). Paragraph (b) of Sec. 111.13, pertaining to the date and
place of the examination, provides that an individual intending to take
the examination must advise the appropriate port director in writing at
least 30 calendar days prior to the scheduled examination date and
remit the $200 examination fee prescribed in paragraph (a) of Sec.
111.96. There were previously no additional requirements in Sec.
111.13 that were required to be fulfilled in order for an individual to
sit for the customs broker's license examination.
Notice of Proposed Rulemaking
On May 27, 2008, CBP published a notice of proposed rulemaking in
the Federal Register (73 FR 30328; the ``NPRM'') that proposed to amend
Sec. 111.13 to more closely align the basic requirements that an
individual must satisfy to take the written examination for a customs
broker's license with the basic requirements an individual must satisfy
to obtain an customs broker's license. In order to be eligible to take
the written examination under the amendments proposed in the NPRM, an
individual would be required to be a U.S. citizen on the date of
examination and not be an officer or employee of the U.S. Government,
and to have attained the age of 21 prior to the date of examination.
The NPRM explained that the proposed amendments would facilitate
the overall licensing process by helping to ensure that those sitting
for the examination are not automatically precluded from obtaining a
license by reason of age, citizenship status, or employment. It was
also noted that limiting the examination to U.S. citizens is a
reasonable security measure that conforms to the existing citizenship
requirement for obtaining a license. In addition, by barring U.S.
Government employees from taking the examination, the changes proposed
in the NPRM would help to eliminate the appearance of any conflict of
interest or unfair advantage that might be associated with their
Federal Government employment.
The NPRM also proposed non-substantive amendments to Sec.
111.13(a), (c), and (e) to reflect the nomenclature changes effected by
the transfer of the U.S. Customs Service to the Department of Homeland
Security.
Comments were solicited in the NPRM of May 27, 2008. The comment
period closed on July 28, 2008.
Discussion of Comments
Four commenters responded to the solicitation of comments in the
NPRM. A description of the comments received and CBP's response is set
forth below.
Comment: One commenter did not support the proposed requirement
that an individual attain the age of 21 prior to the date of the broker
examination because this requirement would inhibit the career potential
of individuals who can currently take and pass the examination and
subsequently apply to obtain a customs broker's license upon turning 21
years old. In this regard, the commenter suggests that CBP reduce the
age limitation proposed in the NPRM.
CBP Response: After further considering the age limit issue, CBP
[[Page 52457]]
agrees with the commenter that the limit should be lowered from the
proposed 21 years to 18 years of age to provide greater opportunities
for individuals who have graduated from high school and are in the
process of gaining work experience before being eligible to apply for a
broker's license. CBP notes that the age of majority (adulthood) in the
United States is generally considered to be 18 years and that age 18 is
consistent with the requirement that an application for an individual
broker's license must be submitted within a 3-year period after the
applicant takes and passes the written examination. See 19 CFR
111.12(a). A less restrictive age requirement ensures that an
individual will still be able to apply to obtain a license upon turning
21 years old while having the opportunity to work under the supervision
and control of a licensed broker or brokerage for a greater time period
after having taken the exam. Accordingly, since CBP is adopting the
commenter's suggestion to modify the age limit, Sec. 111.13(b) is
amended in the final rule to require that an individual must only be 18
years old on the date of the examination.
Comment: One commenter, an association that provides a preparatory
training course for individuals intending to take the written
examination, stated that it was initially concerned that the age and
citizenship requirements proposed in the NPRM would negatively impact
its business by reducing the number of applicants who are eligible to
sit for the examination. However, the commenter specifically noted that
only one out of 203 applicants enrolled in its course for the October
2008 examination would not have met the age and citizenship
requirements to take the examination as proposed in the NPRM. As such,
the commenter supports the proposed amendments since there was no
economic impact on its business.
CBP Response: CBP appreciates the commenter's input and its review
of the potential impact that the proposed amendments would have had on
its business. Since CBP is modifying the age requirement from 21 years
to 18 years based upon the input of another commenter, CBP believes
there is even less of a restriction on those who would likely enroll in
the commenter's preparatory course.
Comment: A commenter opposed the amendments in the NPRM based upon
the amount of time it takes to obtain a license after passing the
examination. The commenter would only support the proposed amendments
if CBP was required to issue a license within six months of passing the
examination.
CBP Response: CBP understands the commenter's concern regarding the
timely issuance of customs brokers' licenses after passing the
examination. However, CBP believes that requiring licenses to be issued
within a mandatory timeframe would not be operationally practical or in
furtherance of CBP's mission of facilitating legitimate trade. In this
regard, CBP initially notes that the broker's examination is intended
only to evaluate and verify an applicant's knowledge of relevant
customs laws and regulations. The background investigation described in
Sec. 111.14, which must be completed after an individual passes the
examination but before a license is issued, is intended to verify the
accuracy of the statements made in the application, the business
integrity of the applicant, and the moral character and reputation of
the applicant. CBP has a legitimate interest in closely scrutinizing
applicants who will be transacting customs business on behalf of
importers before granting a license. Considering the general scope of
the background investigation, the circumstances unique to each
applicant's background that may require more time to investigate, and
the number of Federal agencies that may ultimately assist in the
investigation (e.g., Federal Bureau of Investigation, U.S. Immigration
and Customs Enforcement, CBP), it is clear that imposing a regulatory
requirement to issue a license within an arbitrary time frame would not
be operationally practical and would hinder CBP's ability to verify
that licenses are issued to qualified individuals.
Comment: One commenter, a large clothing retailer, did not support
the amendment in the NPRM to preclude non-U.S. citizens from taking the
examination. In support of its position, the commenter states that the
private sector does not have an equivalent to the examination and notes
that employers may hire and promote individuals based solely upon their
ability to pass the examination. In addition, the commenter states that
preventing non-U.S. citizens from taking the examination would be
discriminatory since it would prevent legal resident aliens from
advancing their careers in the sense that the examination is the only
measurement of an individual's competence in the trade compliance
field.
CBP Response: CBP initially notes that the customs broker's license
examination is not designed to be used as a tool by private sector
employers to gauge whether job applicants or current employees possess
the requisite knowledge to be employed or promoted in the trade
compliance field. Rather, the examination is administered so that CBP
can evaluate and verify an applicant's knowledge of relevant customs
laws and regulations for purposes of granting an individual customs
broker's license. In addition, CBP disagrees that the examination is
the only measurement of an individual's competence in the trade
compliance field because employers have the option to utilize
privately-developed benchmarks or other academic tools to evaluate an
individual's aptitude. Moreover, CBP disagrees that preventing non-U.S.
citizens from taking the examination would be discriminatory because
the amendment set forth in the NPRM and adopted in this document will
merely align the requirement for taking the examination with the
existing statutory requirement of citizenship for obtaining a license.
See 19 U.S.C. 1641(b)(2).
Conclusion
After analysis of the comments and further review of matter, CBP
has decided to adopt as final, with the modification discussed above in
the comment analysis, the NPRM published in the Federal Register (73 FR
30328) on May 27, 2008. In addition, minor editorial changes have been
made to the regulatory text for clarity.
Regulatory Flexibility Act
Pursuant to the provisions of the Regulatory Flexibility Act (5
U.S.C. 601 et seq.), it is certified that the amendments in this
document do not have a significant economic impact on a substantial
number of small entities because the final rule more closely aligns the
requirements for taking the written examination for an individual
customs broker's license with the requirements for actually obtaining a
customs broker's license as to citizenship and employment. Accordingly,
the amendments set forth in this document are not subject to the
regulatory analysis or other requirements of 5 U.S.C. 603 and 604.
Executive Order 12866
This final rule does not meet the criteria to be considered an
economically ``significant regulatory action'' under Executive Order
12866 because it will not result in the expenditure of over $100
million in any one year. The Office of Management and Budget (OMB) has
not reviewed this rule under that Order.
[[Page 52458]]
Signing Authority
This document is being issued by CBP in accordance with Sec.
0.1(b)(1) of the CBP regulations (19 CFR 0.1(b)(1)).
List of Subject in 19 CFR Part 111
Administrative practice and procedure, Brokers, Customs duties and
inspection, Imports, Licensing, Reporting and recordkeeping
requirements.
Amendments to the CBP Regulations
0
For the reasons set forth in the preamble, part 111 of title 19 of the
Code of Federal Regulations (19 CFR part 111) is amended as set forth
below.
PART 111--CUSTOMS BROKERS
0
1. The general authority citation for part 111 continues to read as
follows:
Authority: 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized
Tariff Schedule of the United States), 1624, 1641.
* * * * *
0
2. In Sec. 111.13:
0
a. Paragraph (a) is amended by removing the words ``Customs
Headquarters'' and adding in its place, the words ``Customs and Border
Protection (CBP) Headquarters'';
0
b. Paragraph (b) is amended by revising the heading and adding a new
first sentence;
0
c. Paragraph (c) is amended by removing the word ``Customs'' each place
it appears and adding in its place, the term ``CBP''; and
0
d. Paragraph (e) is amended by removing the word ``Customs'' in the
first sentence and adding in its place, the term ``CBP''.
The addition and revision to paragraph (b) read as follows:
Sec. 111.13 Written examination for individual license.
* * * * *
(b) Basic requirements, date, and place of examination. In order to
be eligible to take the written examination, an individual must on the
date of examination be a citizen of the United States who has attained
the age of 18 years and who is not an officer or employee of the United
States Government. * * *
* * * * *
Dated: August 18, 2010.
Alan Bersin,
Commissioner, U.S. Customs and Border Protection.
[FR Doc. 2010-21254 Filed 8-25-10; 8:45 am]
BILLING CODE 9111-14-P