Direct Communication between brokers and importers is being emphasized by CBP
CBP has published the new modernization act to strengthen and reinforce some compliance regulations for customs brokers, including this particular provision,
"CBP has also updated, among other changes, the responsible supervision and control oversight framework, ensuring that customs business is conducted within the U.S. and requiring that a customs broker has direct communication with an importer. "
The brokers used to physically meet with the client and shake their hands in the initial meeting. The broker used to pick up the phone, ask clients questions about their imported commodity, and act as the client's consultant. Why CBP needs to emphasize this point now? Because CBP notices that some companies purposely set up many barriers internally that make it brokers challenging to do this job.
The salesperson would tell you, "I need this power of attorney back this afternoon. If you cannot approve it today, I will lose this deal, which is all your fault. Here is all the information I get from the client. Please get it done. "
The operation guy would tell you, "I already booked the truck today because we cannot delay this VIP customer. Please clear this product by all means today. I am sure you cannot afford the consequence of getting these products delayed."
The forwarder guy would tell you," Please clear the product using this tariff code. We have used it before. I want you to refrain from bothering my client with this tedious stuff. "
In every other department, staff says, customs broker(s) is a potential obstacle. To eliminate this "obstacle," they set many barriers to prevent brokers from obtaining client information or directly communicating with them. And now CBP feels it is time to make a change. They say," Stop, let brokers be brokers. I need my licensed customs brokers to do the real compliance job so I can trust your company's importation data. Otherwise, I can issue a few penalties paper and wash away all your previous shipment profits. "
Also, importers want to hide fraudulent activity called "borrowing IOR." Importers would ask freight forwarders to sell them IOR or POA for customs clearance. So these importers clear their shipment using other companies' identities ( POA, Tax number, commercial invoice template...) to give themselves some favor, including but not limited to
Hide export sales revenue to falsify VAT, thus causing tax evasion
Circumvention of foreign exchange control resulting in abnormal foreign exchange collection
Evade the supervision of the inspection and quarantine department
Money laundering
That is why some brokers told me they started to see some entries receive an "unauthorized to make entry" notice from CBP. That is a red flag for identity theft. Therefore, CBP has started to demand that brokers communicate directly with the importer regularly instead of through the freight forwarder. Remember the 911 tragedy? That broker clears the boom because he does not know the terrorists are stealing his client's identity.
Overall, I support this provision within the new modernization act. Let brokers do what they are supposed to do.
On Oct. 18, CBP published final regulation modernizing the customs broker regulations with a 60-day implementation or by Dec. 19.
https://public-inspection.federalregister.gov/2022-22445.pdf