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Customs Committee Agenda for 4/5/07 Meeting - ncbfaa

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<strong>07</strong>0222 v.1.0<br />

NCBFAA <strong>Customs</strong> <strong>Committee</strong><br />

draft <strong>Meeting</strong> <strong>Agenda</strong> – April 5, 20<strong>07</strong><br />

<strong>Meeting</strong> Room:<br />

NCBFAA <strong>Customs</strong> <strong>Committee</strong> Roster<br />

Voting Name Position RSVP<br />

Area 1 Amy Magnus Member<br />

Area 2 Bill Skinner Member<br />

Area 3 Ken Bargteil Chairman<br />

Area 4 Penny Ricas Member<br />

Area 5 Joe Trulik Member<br />

Area 6 Gary Ryan Member<br />

Area 7 Darrell Sekin Member<br />

Area 8 Neto Roser Member<br />

Area 9 John Peterson Vice Chairman<br />

Non-Voting<br />

Advisor Alan Klestadt <strong>Customs</strong> Counsel<br />

Advisor Harold Brauner Senior Counselor<br />

Advisor Art Litman Senior Counselor<br />

Advisor Michael Dugan Senior Counselor<br />

Automation Subcommittee Bob Perkins Chairman<br />

LB&F Subcommittee Chip Bown Chairman<br />

Drawback Subcommittee Michael Cerny Chairman<br />

Carrier Best Practices Subcommittee John Hyatt Co-Chairman<br />

CESAC Representative Stewart Hauser Chairman<br />

President Mary Jo Muoio ex-Officio<br />

Chairman of the Board Federico Zuniga ex-Officio<br />

08:30 – Call to order<br />

08:30 – Opening Remarks and Introductions<br />

08:40 – The Security Filing<br />

10:10 – Break<br />

10:30 – 1641 Penalties<br />

11:30 – CCS & <strong>Customs</strong> Outreach<br />

12:00 – Lunch<br />

<strong>Meeting</strong> <strong>Agenda</strong><br />

13:00 – Late Pay Penalty Guidelines<br />

13:50 – ACE eManifest<br />

14:40 – Break<br />

15:00 – Recordkeeping Amendments<br />

15:30 – Emergency Temporary Permit Regulation<br />

16:00 – EIP RLF Actual Use Merchandise<br />

16:30 – Adjourn<br />

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<strong>07</strong>0222 v.1.0<br />

08:30 – Call to order<br />

08:30 – Opening Remarks and Introductions<br />

Welcoming remarks, housekeeping notes and introductions will be made. Note taking<br />

responsibilities will be assigned. A sign-in sheet will be circulated.<br />

08:40 – The Security Filing<br />

At its February 2 nd meeting with Debbie Spero, Jayson Ahern, Michael Mullen, and Sam<br />

Banks, Debbie Spero agreed to provide NCBFAA with the legal basis <strong>for</strong> CBP’s determination<br />

that activities necessary <strong>for</strong> the security filing do not involve conducting customs business. The<br />

<strong>Customs</strong> <strong>Committee</strong> is anxious to receive this in<strong>for</strong>mation. NCBFAA has carefully studied this<br />

issue, and as reflected in its comments (see Attachment “A”) on the strawman proposal and<br />

NPRM recommendations, has come to the conclusion that the activities integral to the<br />

construction and transmittal of the security filing inescapably involve the filer in conducting<br />

customs business. The <strong>Customs</strong> <strong>Committee</strong> believes it is in the interests of both CBP and<br />

NCBFAA to have an open discussion on this issue and is requesting the participation in this<br />

discussion of the OR&R attorney principally responsible <strong>for</strong> CBP’s determination in this matter.<br />

Of equal importance to the <strong>Customs</strong> <strong>Committee</strong> in this matter are the practical realities of<br />

organizing such a dramatic change of international business practice, and the daunting challenge<br />

of doing so with the least disruption possible of the supply chain and competitive environment.<br />

The <strong>Customs</strong> <strong>Committee</strong> would like to devote the balance of time allotted to this agenda item to<br />

explore pitfalls and possible solutions with regard to the data elements, filer qualification,<br />

transmission channels, timing issues, less-than-container-load shipments, corrections,<br />

confidentiality, and consequences.<br />

10:10 – Break<br />

10:30 – 1641 Penalties<br />

Prior to enactment of legislation authorizing <strong>Customs</strong> to en<strong>for</strong>ce monetary penalties against<br />

customs brokers, codified in 19 U.S.C. 1641(d), <strong>Customs</strong> and representatives of NCBFAA<br />

collaborated to construct a provision that would provide <strong>Customs</strong> with a necessary adjunct to<br />

their en<strong>for</strong>cement powers. In reaching agreement on the new monetary penalty provision<br />

NCBFAA’s principal concern was that the small family businesses that comprised the majority<br />

of its members not face financial ruin by reason of a penalty provision that was intended to be<br />

less momentous than suspension or revocation of the customs broker’s license. There is no<br />

doubt among those who participated in that collaboration that an agreement was reached, and<br />

that the $30,000 limitation was to be the sum total monetary penalty that might be assessed <strong>for</strong><br />

all violations prior to notice of penalty.<br />

The good faith that has been the hallmark of collaborations between <strong>Customs</strong> and the<br />

NCBFAA is a critical element <strong>for</strong> success as we meet the manifold challenges ahead. CBP’s<br />

current prosecution of multiple $30,000 monetary penalties against an NCBFAA member <strong>for</strong><br />

violations all occurring prior to the first notice of penalty has reverberated through our<br />

association. The <strong>Customs</strong> <strong>Committee</strong> would like to discuss this matter as a policy issue.<br />

Members of the NCBFAA Large Broker & Forwarder <strong>Committee</strong> have opened discussions<br />

with Vera Adams on the larger issue of broker compliance and monetary penalties. The theme<br />

of that ef<strong>for</strong>t has been to explore means by which the purpose of penalties, i.e., to bring about<br />

better compliance, might be more effectively achieved, in a more efficient regime. It is<br />

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<strong>07</strong>0222 v.1.0<br />

envisioned that our proposal will rely on self assessment and compliance measurement on an<br />

account basis. We have been tasked to present benefits to CBP in favor of our proposal. The<br />

<strong>Customs</strong> <strong>Committee</strong> would like to <strong>for</strong>malize this ef<strong>for</strong>t and achieve an agreement in principle at<br />

this meeting with CBP.<br />

11:30 – CCS & <strong>Customs</strong> Outreach<br />

In the spring of 2005 NCBFAA inaugurated its <strong>Customs</strong> Compliance Specialist program.<br />

The stated purpose of this program is to enhance the expertise and professionalism of our trade<br />

sector. At the heart of the program is a requirement <strong>for</strong> continuing education <strong>for</strong> annual<br />

recertification. A point system has been devised to objectify the accumulation of educational<br />

experiences throughout the year. In order to provide an enrollment that is nationwide the<br />

greatest opportunity <strong>for</strong> meaningful educational experiences, NCBFAA will recognize third<br />

party tuition with an appropriate point award. We believe that our CCS participants should be<br />

encouraged to attend CBP outreach opportunities, and deserve to earn continuing education<br />

points <strong>for</strong> those events. CBP cooperation is necessary to accomplish this. The <strong>Customs</strong><br />

<strong>Committee</strong> hopes to persuade CBP at this meeting of the merits <strong>for</strong> supporting our CCS program<br />

in this way.<br />

12:00 – Lunch<br />

13:00 – Late Pay Penalty Guidelines<br />

The <strong>Customs</strong> <strong>Committee</strong> Chairman filed in<strong>for</strong>mal comments with Jeremy Baskin on<br />

November 16, 2005 as follows: “As to the PMS penalty and mitigation guideline, NCBFAA<br />

would like to suggest –<br />

1. A $2,500 cap on the base amount + interest calculated at the official posted rates, and<br />

2. Clear language that an Option 1 penalty might be remitted in full, or substantially mitigated<br />

if it can be shown that the late pay resulted solely due to a customs broker automated<br />

systems “glitch” or similar (snow day type) failure.<br />

Clearly $2,500 is not an insignificant amount <strong>for</strong> even a large customs broker. It may represent<br />

the fees collected <strong>for</strong> as many as 100 entries (or more) at the border. When en<strong>for</strong>ced against a<br />

small customs broker, that amount will come right out of the owner’s pocket. I don’t know how<br />

that would feel <strong>for</strong> the CBP officials establishing this guideline, but it certainly would cause me<br />

very significant distress if it came out of my checking account. The majority of NCBFAA<br />

members are small businesses; $2,500 + interest is very meaningful. If your constituency<br />

disagrees, we would be interested to see some statistics to support the need <strong>for</strong> a larger penalty.<br />

As I said during our meeting, and as I’ve expressed to the NCBFAA <strong>Customs</strong> <strong>Committee</strong>, we<br />

know that the penalty must sting, but we would like to negotiate the lowest reasonable threshold<br />

<strong>for</strong> this.<br />

If you set the base amount of the penalty too high, you will simply exclude a large number<br />

of mostly small customs brokers from using broker periodic statements. CBP might still reach<br />

its goal <strong>for</strong> PMS duty collections, but as a byproduct CBP will be introducing an artificial<br />

anticompetitive obstacle into the customs brokerage market. Please believe me that there are<br />

already significant competitive advantages enjoyed by the large firms in this market space. If the<br />

base amount proves to be too low, CBP can always come back with an FRN and adjust the<br />

amount upward, as it has done <strong>for</strong> bond amounts.”<br />

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<strong>07</strong>0222 v.1.0<br />

The <strong>Customs</strong> <strong>Committee</strong> would appreciate the opportunity to reach an understanding with<br />

CBP on this important issue.<br />

13:50 – ACE eManifest<br />

As eManifest becomes mandatory we continue to experience problems related to systems,<br />

training, and acceptance. We can appreciate the investment CBP has made and continues to<br />

make to provide <strong>for</strong> a smooth transition, and we recognize that our community needs to be part<br />

of the solution and not part of the problem. The <strong>Customs</strong> <strong>Committee</strong> believes that in at least<br />

some cases CBP has been reluctant to seek practical solutions to acknowledged issues, allowing<br />

unwarranted penalties to result, the burden <strong>for</strong> resolution to fall unduly on our members, and our<br />

cost of doing business to unnecessarily escalate. If NCBFAA and its members can be of any<br />

practical assistance to make <strong>for</strong> a better transition as ACE eManifest advances, this <strong>Committee</strong><br />

would like to know the specific means by which that might be done. The <strong>Customs</strong> <strong>Committee</strong><br />

believes that it brings to this meeting important insight into ways by which CBP might improve<br />

this experience. For this discussion we think that the participation of Jim Swanson and/or Lou<br />

Samenfink would be beneficial.<br />

14:40 – Break<br />

15:00 – Recordkeeping Amendments<br />

The <strong>Customs</strong> <strong>Committee</strong>’s request <strong>for</strong> revision of the recordkeeping regulations (see<br />

Attachment “B”) would bring those requirements into con<strong>for</strong>mity with current business practice<br />

without compromising CBP’s legitimate interests to have records available <strong>for</strong> inspection and<br />

review at the port of entry within a reasonable period of time after making a demand <strong>for</strong><br />

production of those records. This very important consideration <strong>for</strong> our <strong>Committee</strong> and the entire<br />

customs brokerage industry has languished at headquarters <strong>for</strong> the last four years. On several<br />

occasions we were told by Betsy Durant that our request had been well received, that proposed<br />

rulemaking could be anticipated, and that we would be well pleased with the revisions. In the<br />

<strong>Committee</strong> Chairman’s last meeting with Larry Rosenzweig, as Acting Director <strong>for</strong> the Office of<br />

Trade Relations, he said that he agreed with our request. To this date CBP has offered no<br />

substantive reason <strong>for</strong> the delay in coming <strong>for</strong>ward with proposed rulemaking based upon our<br />

draft revisions.<br />

For years CBP has publicized its progress toward business oriented and account based<br />

paradigms in rebuilding the agency to better accomplish its missions. Our community has<br />

worked mightily, as volunteers, alongside CBP in the TSN, COAC and other trade support<br />

ef<strong>for</strong>ts to help CBP realize its business goals. It is extremely disheartening when we make such<br />

a modest proposal that would greatly facilitate our own business practice without diminishing in<br />

any way CBP’s legitimate interests, and requiring only minimal ef<strong>for</strong>t on the part of CBP to<br />

accomplish, to have nothing to show <strong>for</strong> it after four years. The <strong>Customs</strong> <strong>Committee</strong> would<br />

appreciate the opportunity to discuss this item with the Assistant Commissioner and the<br />

responsible OR&R attorney.<br />

15:30 – Emergency Temporary Permit Regulation<br />

In view of the recent creation of the Office of Trade, the imperative <strong>for</strong> post incident<br />

resumption of trade readiness established in P.L. 109–347 dated October 13, 2006 (The SAFE<br />

Ports Act of 2006), Section 202, and in consideration of the key role played by customs brokers<br />

Page 4 of 17


<strong>07</strong>0222 v.1.0<br />

in facilitating the efficient clearance of goods, and the criticality of that function immediately<br />

following an federally declared emergency, the <strong>Customs</strong> <strong>Committee</strong> believes it is obliged to<br />

bring this agenda item to the Assistant Commissioner’s attention. There are four essential parts<br />

to this provision (See Attachment “C”):<br />

1. The rule comes into effect only on declaration of an emergency in the affected area by the<br />

federal government, applies only to those customs brokers having a permit in the affected area,<br />

and expires at the discretion of the CBP Commissioner.<br />

2. The provision authorizes the CBP Commissioner to grant a temporary permit in another<br />

district to which the customs broker has been <strong>for</strong>ced to relocate their place of business because of<br />

the emergency.<br />

3. The temporary permit will authorize the relocated customs broker to clear cargo <strong>for</strong><br />

customers pre-existing the emergency if the cargo arrives at ports in the same district as the<br />

affected area or in other ports at which cargo arrives when diverted from the affected area.<br />

4. The revocation of the temporary permit will be without prejudice and the customs broker<br />

will be allowed to conclude all transactions begun while the temporary permit was in <strong>for</strong>ce.<br />

16:00 – EIP RLF Actual Use Merchandise<br />

The <strong>Customs</strong> <strong>Committee</strong> considered whether the rationale given by CBP to explain its<br />

exclusion of actual use merchandise from the RLF prototype is consistent with regulatory<br />

provisions.<br />

§ 10.134 Declaration of intent. – "A showing of intent by the importer as to the actual use of<br />

imported merchandise shall be made by filing with the entry <strong>for</strong> consumption or <strong>for</strong> warehouse a<br />

declaration as to the intended use of the merchandise, or by entering the proper subheading of an<br />

actual use provision of the Harmonized Tariff Schedule of the United States (HTSUS) and the<br />

reduced or free rate of duty on the entry <strong>for</strong>m. Entry made under an actual use provision of the<br />

HTSUS may be construed as a declaration that the merchandise is entered to be used <strong>for</strong> the<br />

purpose stated in the HTSUS, provided the port director is satisfied the merchandise will be so<br />

used. However, the port director shall require a written declaration to be filed if he is not<br />

satisfied that merchandise entered under an actual use provision will be used <strong>for</strong> the purposes<br />

stated in the HTSUS." In the presumably very small number of cases when the final clause of 19<br />

CFR 10.134 is applicable, the Port Director could issue a CBP Form 28.<br />

The <strong>Committee</strong> concluded that CBP’s claim that there is a paper document required at entry<br />

is contrary to the plain language of the governing regulation. The <strong>Customs</strong> <strong>Committee</strong> would<br />

like to revisit this matter with CBP at this meeting.<br />

Blue headings indicate OLD BUSINESS<br />

Green headings indicate NEW BUSINES<br />

16:30 – Adjourn<br />

Page 5 of 17


<strong>07</strong>0222 v.1.0<br />

Attachment “A”<br />

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<strong>07</strong>0222 v.1.0<br />

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<strong>07</strong>0222 v.1.0<br />

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<strong>07</strong>0222 v.1.0<br />

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<strong>07</strong>0222 v.1.0<br />

Page 10 of 17


<strong>07</strong>0222 v.1.0<br />

________________________________________________________<br />

Attachment “B”<br />

NATIONAL CUSTOMS BROKERS AND<br />

FORWARDERS ASSOCIATION OF AMERICA, INC.<br />

________________________________________________________<br />

Office of General Counsel Phone: (212) 944-6611<br />

One Astor Plaza Facsimile: (212) 944-9779<br />

1515 Broadway - 43rd Floor e-mail: hisaacs@tdllp.com<br />

New York, N.Y. 10036<br />

October 2, 2003<br />

Douglas M. Browning, Deputy Commissioner<br />

United States <strong>Customs</strong> Service<br />

1300 Pennsylvania Avenue, N.W.<br />

Washington, DC 20229<br />

Re:<br />

Proposed Revisions To <strong>Customs</strong> Broker<br />

“Recordkeeping” Regulations_________<br />

Dear Deputy Commissioner Browning:<br />

This letter sets <strong>for</strong>th a request by the National <strong>Customs</strong> Brokers and Forwarder’s<br />

Association of America, Inc., (“NCBFAA”) to approve two much-needed revisions of the current<br />

regulatory requirements relating to recordkeeping requirements <strong>for</strong> licensed customs brokers. 1<br />

Section 163.5(b)(2)(iii), C.R. 2<br />

Pursuant to section 163.5(b)(2), C.R., many of our members have received permission<br />

from <strong>Customs</strong> and Border Protection (“CBP”) to maintain the “original” of “entry records” in an<br />

alternative, electronic, <strong>for</strong>mat. The approved methods maintain permanent copies of the original<br />

documents.<br />

In practice, all records relating to a broker’s customs business are filed as the broker<br />

receives them and/or at the time the broker files the entry. However, solely because of section<br />

163.5(b)(2)(iii), the broker must keep the original of “entry records” <strong>for</strong> a minimum of 120 days<br />

1 We <strong>for</strong>mally withdraw our letter, dated May 28, 2002, and ask this letter be considered in its stead.<br />

2 Section 163.5(b)(2)(iii) presently provides that, “Except in the case of packing lists (see § 163.4(b)(2)), entry<br />

records must be maintained in their original <strong>for</strong>mats <strong>for</strong> a period of 120 calendar days from the end of the release or<br />

conditional release period, whichever is later, or, if Page a demand 11 of <strong>for</strong> 17 return to <strong>Customs</strong> custody has been issued, <strong>for</strong> a


<strong>07</strong>0222 v.1.0<br />

In practice, all records relating to a broker’s customs business are filed as the broker<br />

receives them and/or at the time the broker files the entry. However, solely because of section<br />

163.5(b)(2)(iii), the broker must keep the original of “entry records” <strong>for</strong> a minimum of 120 days<br />

after release of the imported merchandise, irrespective of the fact that the paper document has<br />

been electronically stored. In essence, this requires that the brokers that have been approved <strong>for</strong><br />

electronic storage must also maintain a separate “paper” filing system. Further, because the<br />

period <strong>for</strong> retention varies, depending upon the extent of the “conditional release” period and/or<br />

whether a redelivery notice has been issued, a broker is precluded from establishing a reliable<br />

schedule <strong>for</strong> the routine systematic destruction of the original documents. In most cases, the<br />

result is that the broker maintains these records <strong>for</strong> the entire recordkeeping period set <strong>for</strong>th<br />

under 19 C.F.R. §163.4.<br />

While customs brokers understand and appreciate the fact that paper “entry records” are<br />

no longer automatically filed with, and maintained by, the <strong>Customs</strong> Service, the retention of the<br />

original creates an unnecessary burden on our member brokers. Certainly, at the time the<br />

regulations were promulgated, no one could <strong>for</strong>esee the great strides that would occur in<br />

electronic imaging and storage or the economic and recordkeeping burden this requirement<br />

would cause.<br />

In addition, under amended 19 U.S.C. §1509, the importer is the primary keeper of the<br />

“entry records.” In many instances, the customs broker only receives copies of these documents<br />

from the importer and that is the record that the broker is now required to keep. In a practical<br />

and legal sense, they are “evidence” of the record the broker relied upon in submitting the<br />

entry/entry summary. An electronic image of the documents serves exactly the same purpose.<br />

In view of the above, we request that your office give favorable consideration to<br />

amending the provisions of section 163 to allow <strong>for</strong> the immediate retention of an electronic copy<br />

of entry records. Enclosed is our suggested language.<br />

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<strong>07</strong>0222 v.1.0<br />

Section 111.23, C.R. 1<br />

Pursuant to section 19 C.F.R. §111.23(a), licensed customs brokers are required to<br />

maintain records “within the broker district that covers the port to which they relate.” 2 The<br />

regulations (19 C.F.R. §119(b)(6)) also provide that, in connection with an application <strong>for</strong> a<br />

“Permit,” the broker shall provide CBP with “The place where the applicant's brokerage records<br />

will be retained and the name of the applicant's designated recordkeeping contact.”<br />

Because many brokers maintain more than one office within a “broker district” and/or have<br />

more than one permit, the place or retention is often not the permitted location <strong>for</strong> which the<br />

application is filed. Further, the licensee may elect to have the entry/entry summary and the<br />

duty payment done from other locations. 3 As a result, the broker would prefer to consolidate the<br />

non-electronic records pertaining to its “customs<br />

1 Section 111.23, C.R., provides as follows:<br />

Retention of records.<br />

(a) Place and period of retention-<br />

(1) Place. Records must be retained by a broker in accordance with the provisions of this part and part 163 of<br />

this chapter within the broker district that covers the <strong>Customs</strong> port to which they relate unless the broker<br />

chooses to consolidate records at one or more other locations, and provides advance notice of that<br />

consolidation to <strong>Customs</strong>, in accordance with paragraph (b) of this section. * * *<br />

(b) Notification of consolidated records-<br />

(1) Applicability. Subject to the requirements of paragraph (b)(2) of this section and except when a<br />

restriction applies under § 1 Under 19 C.F.R. §111.21, they include both its “records of account” and those<br />

relating to its “customs business.” 63.5(b) of this chapter, the option of maintaining records on a consolidated<br />

system basis is available to brokers who have been granted permits to do business in more than one district.<br />

(2) Form and content of notice. If consolidated storage is desired by the broker, he must submit a written<br />

notice addressed to the Director, Regulatory Audit Division, U.S. <strong>Customs</strong> Service, 909 S.E. First Avenue,<br />

Miami, Florida 33131. The written notice must include:<br />

(i) Each address at which the broker intends to maintain the consolidated records. Each such location must<br />

be within a district where the broker has been granted a permit;<br />

be maintained, unless the Director, Regulatory Audit Division, in Miami is first notified. * * * *<br />

2 Page 13 of 17<br />

Under 19 C.F.R. §111.21, they include both its “records of account” and those relating to its “customs business.”<br />

3 This is also necessary in view of the anticipated adoption of “monthly duty payment.”


<strong>07</strong>0222 v.1.0<br />

business” using criteria that does not lend itself to the ability to advise CBP, in advance,<br />

of the location at which the “paper” documents will be stored. 1<br />

Our members are mindful of the requirement, under 19 C.F.R. §111.25, that these records<br />

“must be made available upon reasonable notice” by an authorized <strong>Customs</strong> official, at the<br />

district office that submitted the entry, irrespective of where they are located. However, we<br />

believe that the manner in which this requirement is satisfied should be left to the judgment of<br />

the individual licensee. 2<br />

In order to accomplish this result, we ask that you modify the current regulations so as to<br />

require only that the licensee provide the name of the individual, located within the particular<br />

broker district, designated as the “record keeper,” without also requiring the specific location of<br />

the records. Attached, <strong>for</strong> your consideration, are our suggestions to accomplish this.<br />

We would be pleased to meet with you or representatives of your staff to further discuss<br />

these matters. Please do not hesitate to contact us should further in<strong>for</strong>mation be required.<br />

Sincerely,<br />

HAI:jov<br />

Enclosures<br />

Harvey A. Isaacs<br />

General Counsel<br />

1 For instance, a broker may choose to keep records relating to a particular customer at the office that is designated<br />

to serve as the “point of contact” <strong>for</strong> that customer, rather than at a location within the “district.” Because this may<br />

involve storage at several locations <strong>for</strong> the records relating to a single permitted office, it may be impractical or<br />

burdensome to advise CBP as to the location of a particular record.<br />

2 Given, the fact that documents are routinely placed in storage at remote locations, and the fact that those records<br />

Page 14 of 17<br />

can be transferred between offices on an “overnight” basis, this would satisfy the requirement that they be<br />

“reasonably” available at the permitted location, although not stored there.


<strong>07</strong>0222 v.1.0<br />

NCBFAA Proposed Amendment to Part 163<br />

1. Either, eliminate section 163.5(b)(1) from the <strong>Customs</strong> Regulations, or<br />

2. Amend the provision to require only that the importer maintain the original record <strong>for</strong><br />

the required period, as follows:<br />

§ 163.5 Methods <strong>for</strong> storage of records.<br />

* * * *<br />

(b) Alternative method of storage-<br />

* * * *<br />

(2) Standards <strong>for</strong> alternative storage methods. Methods commonly used in standard business<br />

practice <strong>for</strong> storage of records include, but are not limited to, machine readable data, CD ROM,<br />

and microfiche. Methods that are in compliance with generally accepted business standards will<br />

generally satisfy CBP requirements, provided that the method used allows <strong>for</strong> retrieval of<br />

records requested within a reasonable time after the request and provided that adequate<br />

provisions exist to prevent alteration, destruction, or deterioration of the records. The following<br />

standards must be applied by recordkeepers when using alternative storage methods:<br />

* * * *<br />

(iii) Except in the case of packing lists (see § 163.4(b)(2)), entry records must be maintained by<br />

the importer in their original <strong>for</strong>mats <strong>for</strong> a period of 120 calendar days from the end of the<br />

release or conditional release period, whichever is later, or, if a demand <strong>for</strong> return to CBP<br />

custody has been issued, <strong>for</strong> a period of 120 calendar days either from the date the goods are<br />

redelivered or from the date specified in the demand as the latest redelivery date if redelivery<br />

has not taken place;<br />

* * * *<br />

Page 15 of 17


<strong>07</strong>0222 v.1.0<br />

PROPOSED CHANGES TO PART 111, C.R.<br />

Amend section 111.19(b)(6) to read:<br />

“The name of the applicant's designated recordkeeping contact (see § 111.21 and<br />

111.23).”<br />

Amend section 111.23 to read:<br />

(a) Place and period of retention-<br />

(1) Place. Records must be retained by a broker in accordance with the provisions of this<br />

part and part 163 of this chapter and shall be reasonably available within the broker district that<br />

covers the <strong>Customs</strong> port to which they relate unless the broker chooses to consolidate records at<br />

one or more other locations, and provides advance notice of that consolidation to <strong>Customs</strong>, in<br />

accordance with paragraph (b) of this section.<br />

Page 16 of 17


<strong>07</strong>0222 v.1.0<br />

Attachment “C”<br />

Renumber current 111.2(b)(2)(iii) as 111.2(b)(2)(iv) and add the following new provision.<br />

Proposed 111.2(b)(2)(iii)<br />

Notwithstanding the provisions of section 111.2(b)(2)(i), whenever it is determined that due to<br />

Force Majeure or national emergency, normal customs operations within a district(s) are<br />

interrupted and a customs broker permitted in such district must relocate its offices to another<br />

district, the Commissioner may waive the requirements set <strong>for</strong>th under section 111.19(f) and<br />

grant the broker a temporary permit in such other district to which the customs broker has<br />

relocated, authorizing it to conduct customs business both in the original permitted district, as<br />

well as in any other district(s) to which cargo that will be enter in the name of the customs<br />

broker’s pre-existing customers, and ordinarily discharging in the original permitted district, is<br />

diverted. The temporary permit shall expire, without prejudice, at such time that it is determined<br />

by the Commissioner that normal business operations may be resumed in the original permitted<br />

district, or a new district permit has been established by the customs broker, whichever comes<br />

first. Notwithstanding the expiration of a temporary permit issued pursuant to this part, the<br />

customs broker will be permitted to complete all customs business on entries filed under the<br />

temporary permit.<br />

Page 17 of 17

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