NCBFAA Files Brief on CBP's Deactivation of Broker's Filer Code Due to Misuse
The National Customs Brokers & Freight Forwarders' Association has filed an amicus curiae brief at the Court of International Trade in Lizarraga Customs Broker v. Customs and Border Protection ,et al.
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The NCBFAA's brief supports Lizarraga's request for a preliminary injunction, arguing that deactivating a filer code amounts to a revocation of the broker's license and requires full due process beforehand, and that the regulations governing "misuse" of the code are invalid.
(In an earlier motion opposing Lizarraga's request for a preliminary injunction, CBP stated that Lizarraga had sold the use of his code to unauthorized third parties and repeatedly misused it in other ways. CBP had argued that it only deactivated Lizarraga's filer code as a necessary security measure and not as a disciplinary measure. The agency reported that it had discovered that the broker was repeatedly providing his code to unauthorized parties in exchange for money, and that drug smugglers and multiple unknown foreign entities were among those using the codes.)
NCBFAA Argues That Filer Codes Have Property Rights Requiring Due Process
Noting that revocation of a broker's license has been held by the courts to require due process, NCBFAA asserts that a filer code is a critical part of the license, with property rights, and that its deactivation must be subject to the same due process as a license revocation. Thus CBP should have given a broker in Lizarraga's situation advance notification and an opportunity to present objections, as stipulated in the license revocation procedures defined in 19 USC 1641(d)(2)(B) and 19 CFR 111.50.81.
Deactivating of Filer Code Is Tantamount to Revocation of a Broker's License
According to the association's brief, deactivation of a filer code amounts to suspension or revocation of a broker's license because the CBP issues codes to all brokers, and nearly 100% of entries are filed with them. Filing entries manually is not a practical alternative, due to current practices at CBP and other agencies that use the Automated Broker Interface (ABI) in Customs' Automated Commercial System (ACS). CBP's assertion that the broker whose code was deactivated can carry on by filing entries manually is disingenuous, as a broker whose filer code is deactivated could not remain competitive, NCBFAA argues.
Broker Charged With "Misuse" of Filer Code Must Have Opportunity to Respond
NCBFAA further argues that "misuse" of the filer codes mentioned in 19 CFR 142.3a(d)1, is without definition, nor has CBP ever offered any guidance on it elsewhere, so it was unfair not to provide an opportunity to respond to the charges, according to the NCBFAA.
"Misuse" Regulation is Invalid, as no Advance Notice, Opportunity to Comment Provided
The NCBFAA argues that the Administrative Procedure Act (APA), at 5 USC 553, requires that proposed rules be published in the Federal Register and that interested persons be given the opportunity to comment. But the regulatory provision on misuse of codes was published as a final rule on May 28, 1986 with no advance notice or opportunity to comment, the association notes.
119 CFR 142.3a(d) reads as follows: "The Assistant Commissioner, Office of International Trade, or his designee may refuse to allow use of an assigned entry filer code if it is misused by the importer or broker."
(See ITT's Online Archives or 05/06/09 news, 09050620, for BP summary of the CBP motion before the CIT opposing the application for a preliminary injunction.)
NCBFAA Brief of Amicus Curiae available at http://www.ncbfaa.org/files/BriefAmicusCuriaeNCBFAA.pdf