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[Federal Register Volume 74, Number 79 (Monday, April 27, 2009)]
[Notices]
[Pages 19103-19104]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-9551]

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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

Broker Self-Assessment Outreach Pilot

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

ACTION: General notice.

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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, [email protected].

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.
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    \1\ Notwithstanding this pilot, all existing requirements 
continue to apply.
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    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.

[[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.
[FR Doc. E9-9551 Filed 4-24-09; 8:45 am]
BILLING CODE 9111-14-P
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