COAC Recommends Delay to Some Bona Fides Efforts While CBP Revises Form 5106
The Advisory Committee on Commercial Operations (COAC) Role of the Broker working group recommended that it suspend efforts to draft requirements for certain information collection on importers by customs brokers until the agency finishes a proposal on updates to the Importer ID Input Record (CBP Form 5106). The recommendation, voiced during the Nov. 15 COAC meeting, would allow the COAC to see which proposed Form 5106 changes overlap with the bona fides efforts. A CBP report recently released on the issue pointed outlined some of the difficulties the working group faced in developing a standard of bona fides requirements (see 13111225).
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Several members of the working group have felt that the 5106 elements were tied to bona fides, said Vince Iacopella, a COAC member and managing director at the Janel Group. "Much of the data and information that was discussed at the beginning of the discussion two years ago about what could be collected with bona fides, many of us felt could be collected through the 5106 vehicle," he said. "Given that the proposed changes to CBP Form 5106 will address many of the concerns surrounding validation of bona fides, we recommend no changes be made at this time to the current regulations regarding the collection of a valid power of attorney. We will revisit this recommendation after the proposed 5106 changes have been received by the COAC."
It's important that COAC returns to the bona fides issue quickly, said Lev Kubiak of the ICE Intellectual Property Rights Center. Kubiak thanked COAC for "struggling with this idea of bona fides" and urged them to continue the struggle with them. "From my side of the house, in the investigative side of the work, we see a continued and growing threat from our ability to protect the United States economy and the safety of U.S. consumers based on this growing prevalence of importer identity theft, shell corporations that don't really exist, importers that are totally offshore," he said. "Anything that you can do to creatively help us address this issue will go a long way," said Kubiak.
The working group also recommended a change to 19 CFR 111.36(c) to "require that brokers obtain a power of attorney directly from the importer," said Iacopella. "Nothing should prevent a broker from communicating directly with the importer," it said. The COAC also recommended that CBP continues to work to improve "admissibility determination via the proposed revisions to the CBP Form 5106," he said. "CBP should continue to consult with COAC to finalize the 5106 information requirements and the collections requirements" which would help address enforcement concerns.
The COAC also said CBP should develop a program to "recognize best practices within the broker industry and provide benefits to those brokers," Iacopella said. These best practices could include POA collection and validation, he said. "We expect the benefits will be discussed during future COAC meetings." While most brokers have a variety of best practices, "there is no standard across the brokerage industry" and "because some brokers are more desperate to get business and not vet the customer there's been some people that are not so compliant as far as investigation of background" which has led to a problem with "broker shopping," said COAC member Jeff Coppersmith of Coppersmith Global Logistics. "That is the reason for bona fides. That is our problem."