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###### Department of Homeland Security

###### U.S. Customs and Border Protection

# AGENCY:

U.S. Customs and Border Protection, Department of Homeland Security.

# ACTION:

General notice.

# SUMMARY:

This document announces the commencement of the Broker Self-Assessment (BSA) Outreach Pilot (BSA Pilot). The BSA pilot is voluntary and is intended to be a partnership between U.S. Customs and Border Protection (CBP) and participating customs brokers. The primary goal of the pilot is to facilitate a higher level of broker compliance with CBP laws and regulations. In this regard, the BSA Pilot will allow for customs brokers to ascertain voluntarily with CBP how well they comply with their broker requirements, provide recognition and support to participating brokers, and facilitate legitimate trade so that CBP can focus on higher-risk trade enforcement issues. Under this program test, participating customs brokers will update and improve internal controls, perform periodic testing of these internal controls, and disclose to CBP deficiencies discovered through the testing. Any licensed customs broker, who is a member of the Customs-Trade Partnership Against Terrorism (C-TPAT) and who meets the other eligibility requirements of the pilot, may apply to participate. After closure of the application period and review of the applications received, CBP will select a limited number of customs brokers to participate in the BSA Pilot. This document sets forth information on the application process and the requirements for participation in the program test.

# DATES:

Application to participate in this pilot will be accepted from April 27, 2009 through May 27, 2009.

# FOR FURTHER INFORMATION CONTACT:

                        Anita Harris, Trade Liaison, Partnership Programs Branch, Trade Facilitation and Administration Division, Office of International Trade, U.S. Customs and Border Protection, (202) 863-6069,                         *BrokerSelfAssessment@cbp.dhs.gov*.                    

# SUPPLEMENTARY INFORMATION:

## Background

                    U.S. Customs and Border Protection (CBP) is strongly committed to encouraging members of the trade community to meet the responsibilities of complying with applicable trade laws and regulations. In furtherance of this goal, CBP announced the Importer Self-Assessment (ISA) program on June 17, 2002, in a general notice published in the                     **Federal Register**                     (67 FR 41298). The ISA program is a trade facilitation partnership program that recruits trade compliant companies in order to reduce both CBP and company resources required during entry and post entry, and to build cooperative relationships that strengthen compliance with trade laws. The ISA program is based on the premise that importers with strong internal controls achieve the highest level of compliance with CBP laws and regulations, and provides a means to recognize and support importers that have implemented such systems. The ISA program has successfully facilitated trade by strengthening importer compliance with CBP laws and regulations and by building cooperative relationships between CBP and participating importers. In addition, CBP announced the Importer Self-Assessment Product Safety Pilot (ISA-PS) program on October 29, 2008, in a general notice published in the                     **Federal Register**                     (73 FR 64356). The ISA-PS program adopted the self-assessment principles of the ISA program and has allowed for a voluntary approach to product safety compliance.                

## Description of the Broker Self-Assessment Outreach Pilot

### Overview

                    Based on the effectiveness of the ISA program, CBP is initiating a new outreach initiative called the Broker Self-Assessment (BSA) Outreach Pilot (BSA Pilot). This voluntary pilot will allow CBP to assist and facilitate broker compliance with their existing statutory and regulatory requirements under 19 U.S.C. 1641 and part 111 of title 19 of the Code of Federal Regulations (19 CFR part 111).[1]                                          In this respect, CBP recognizes the importance of customs brokers because they serve as intermediaries between CBP and the trading community and because they have played a significant role in the success of various CBP commercial initiatives, automation efforts, and security programs.                

The BSA program is intended to be a partnership program between CBP and licensed customs brokers that will build cooperative relationships and ultimately strengthen broker compliance with trade laws. The BSA program will utilize many of the self-assessment principles of the ISA program while incorporating new methodologies that will provide a more flexible approach to promoting broker compliance. In this regard, the BSA program is based on the premise that customs brokers with strong internal controls achieve the highest level of compliance with CBP laws and regulations. CBP believes that the program will facilitate legitimate trade so that CBP can focus on higher-risk trade enforcement issues.

All licensed customs brokers who are current members of the Customs-Trade Partnership Against Terrorism (C-TPAT) and who meet the other eligibility requirements identified in this document can apply to participate in the BSA Pilot by submitting the information and documentation set forth below. CBP will assess the broker submissions to determine each applicant's readiness to assume the responsibilities of the BSA Pilot. BSA Pilot applications will be accepted from April 27, 2009 to May 27, 2009.

### BSA Pilot Participation Requirements

In order to be eligible to participate in the BSA Pilot, a licensed customs broker must:

1. Be a licensed customs broker for a minimum period of five years.

2. Be a member with full benefits of the C-TPAT.

3. Agree to comply with all applicable CBP laws and regulations.

4. Work in an automated environment through the Automated Broker Interface and the Automated Commercial Environment.

5. Possess a broker national permit.

6. Have and maintain a system of business records that demonstrates the accuracy of CBP transactions.

7. Complete a BSA Pilot Questionnaire and agree to:

a. Continue to maintain and update its internal controls;

b. Perform periodic testing of its internal control system based on risk;

c. Make appropriate adjustments to the internal controls system with an eye toward improvement;

d. Inform CBP, through certain voluntary disclosures permitted under the BSA Pilot, of deficiencies identified in periodic testing; and

                    e. Maintain an audit trail linking financial records to entries filed with CBP.                          ( print page 19104)    

### Application Process

#### 1. Required Information

A broker who meets the requirements set forth above may apply to participate in the BSA Pilot by submitting certain information and documentation to CBP. The information in this submission will be collectively referred to as the “BSA Pilot Application” and will consist of:

a. The broker's license number.

                    b. The broker's legal entity type (                    *i.e.,*                     sole proprietorship, partnership, association or corporation).                

c. The name of the individual qualifying the broker's license.

d. The broker's national permit number.

e. The name of the individual qualifying the broker's national permit.

f. All filer codes assigned to the broker.

g. All associated Importer of Record numbers utilized by the broker with suffixes.

h. The address of each permitted district office with the name of the individual qualifying the permit in each district.

i. An organizational chart of the brokerage firm which includes all permitted district offices.

j. The volume of entries by entry type code processed by all permitted offices during the previous 12-month period.

k. A summary of the broker's business operations that involve interaction with CBP.

l. A statement as to whether the broker participates in any of the following CBP programs:

(1) Periodic Monthly Statement;

(2) Automated Clearing House;

(3) Reconciliation;

(4) Electronic Invoice Processing/Remote Location Filing;

(5) Pre-Arrival Processing system; and

(6) Drawback.

m. A description, by type and activity code, of the customs bonds currently on file with CBP.

n. A statement as to whether the broker has a waiver in place pursuant to 19 CFR 111.19(d)(2) and, if so, a list of locations subject to the waiver. A description of how oversight of permitted district offices is handled and by whom.

o. A statement as to whether the broker has documented policies and procedural manuals relating to CBP business.

#### 2. CBP Review of BSA Pilot Application and Acceptance Into Program

After closure of the application period, CBP will review the BSA Pilot Applications received. CBP plans to select a limited number of broker applicants to participate in the BSA Pilot who are representative of key sectors of the brokerage community or whose structure and processes present potential challenges. Each broker chosen to participate will be provided with a BSA Participation Agreement and BSA Pilot Questionnaire for completion. A CBP multi-disciplinary team consisting of regulatory auditors, national account managers, and other field personnel necessary to conduct a review will then visit the applicant for a consultation to discuss and review the broker's internal controls on how they conduct their customs business. The purpose of the consultation will be to determine if the applicant has sufficient and adequate controls to be able to assess their own compliance with the statutory and regulatory requirements of 19 U.S.C. 1641 and 19 CFR part 111. The broker will be accepted into the BSA Pilot if CBP determines the applicant's internal controls are maintained and updated and the applicant is prepared to perform periodic testing of its internal control system based on risk; make appropriate adjustments to the internal controls system with an eye toward improvement; inform CBP, through certain voluntary disclosures permitted under the BSA Pilot, of deficiencies identified in periodic testing; and maintain an audit trail linking financial records to entries filed with CBP. At that time, CBP will countersign the BSA Participation Agreement. If a broker does not maintain these obligations, CBP reserves the right, in its discretion, to disqualify a broker from participation in the BSA Pilot.

                    Detailed information concerning the BSA Pilot and the questionnaire will be available on the CBP Internet Web site at:                     *http://www.cbp.gov/​xp/​cgov/​trade/​trade_​programs/​bsa.*

### Evaluation of BSA Pilot

CBP intends to review the BSA Pilot within one year after its effective date to measure its effects and achievements, and recommend whether the BSA program will become a permanent program.

Dated: April 22, 2009.

Jayson P. Ahern,

Acting Commissioner, U.S. Customs and Border Protection.

# Footnotes

1.                             Notwithstanding this pilot, all existing requirements continue to apply.                    
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[FR Doc. E9-9551 Filed 4-24-09; 8:45 am]

BILLING CODE 9111-14-P