Given a shift in focus to include growing partner government agency (PGA) controls, perhaps the term “customs broker” has become a misnomer in terms of the realities of the job, according to Megan Montgomery, executive vice president of the NCBFAA.
Customs brokers have been regulated by what is now U.S. Customs and Border Protection (CBP) under the Department of Homeland Security (DHS) since 2002.
Prior to that, the industry was regulated by the U.S. Customs Service, which was housed within the Department of Treasury, and had been since the birth of our nation, quite literally hundreds of years. The mission of the U.S. Customs Service was relatively straightforward: collect the revenue that the country was due on international trade.
With the realignment of the customs function to DHS, the expansion of security and border protection functions, and the rise in oversight activities of other regulating agencies, it is no surprise that the role of the customs broker has changed significantly over the past several decades. Once a purely customs-focused profession, the role of the broker has expanded to the point where it would be almost unrecognizable to a broker of 20-30 years ago.
So what’s a broker to do? Embracing the new world order of additional regulations, government oversight, and responsibilities has taken the profession to the edge of reason at times over the past few years, but ultimately the notion that brokers are one of the pillars of safety and security in the international trade universe makes the industry stronger.
As the National Customs Brokers & Forwarders Association of America’s (NCBFAA) vice president and current member of the Commercial Operations Advisory Committee (COAC), Amy Magnus of A.N. Deringer, recently noted, “Brokers have been preparing and educating themselves as the external environment continues to change. Not content with doing the same things the same ways, the brokers and their association, NCBFAA, have evolved to meet the new requirements.”
The widening of the scope of interaction with the government for the brokerage community has happened both in conjunction with and also alongside of the development of CBP’s Automated Commercial Environment (ACE), the agency’s single-window filing system. The ability of ACE to offer one portal to the government has certainly allowed this broadening of the profession to occur for customs related business, but there is more to the story than that.
While CBP remains the granddaddy of all agencies and the central point of trade control, dozens of other federal agencies regulate trade in broad and narrow scopes. As with CBP, these 45 plus agencies are motivated to enforce their missions and are using the new technology offered by ACE and the connected International Trade Data System (ITDS) to do so. They are also using the customs broker as a conduit to compliance.
In some cases, agencies that have a relatively limited understanding of the role brokers serve in facilitating the presentation of entries and cargo for admission and release, are seizing on the profession as a lifeline to compliance for corporate traders. Today, brokers often spend more time facilitating the release by the other agencies than by CBP.
Recently, much time has been devoted to understanding the growing partner government agency (PGA) controls, developing systems and processes to address those requirements, and then educating the importing companies. It is no longer a process focused solely on CBP, but rather on a much broader group. So, to use the term “customs broker” is a bit of a misnomer now in terms of the realities of the job – i.e. the management of dozens of additional regulating agencies.
Brokers often spend as much or more time educating their clients and the government about the opportunities for client service and the limits of their knowledge about the shipments, power and authority over the freight than they do filing entries! So, are we really still “customs” brokers or are we “government” brokers?
In addition to CBP, the brokerage community deals with 46 (and counting) PGAs, providing data, complying with regulations, engaging in mutual education across the various sectors, and working as a liaison between our clients and the increasingly engaged governmental players in international trade. Steadily, we are becoming experts in multiple agency regulations as those agencies gain a stronger touch on international trade, and the touch point for communicating the regulations, and fostering compliance by importers and exporters.
The development of ACE facilitated the exponential expansion of regulation and led to the explosion of data reported to and consumed by these agencies. Out of the darkness and into the regulating limelight these agencies have come! Agencies that had no hope a few years ago of collecting the type of data they now have access to through ACE are learning how use their embarrassment of riches and, more importantly, how to leverage the regulated entity – the professional customs broker – to ensure compliance from the trader.
Government agencies are comfortable dealing with customs brokers as they recognize the importance of the customs license. While not licensed by these other agencies, the customs broker has become the de facto government broker. We see no end to the expansion of the role of the broker as a one-stop shop for guidance and support for all government interaction with international trade.
So, what’s in a name? At the end of the day, if brokers focused exclusively on Customs controls, we would all be cold (EPA), hungry (USDA), and have a headache (FDA).
Megan Montgomery is executive vice president of the National Customs Brokers & Forwarders Association of America, Inc. (NCBFAA). Headquartered in Washington, DC, the NCBFAA represents nearly 940 member freight forwarders, customs brokers, ocean transportation intermediaries (OTIs), NVOCCs and air cargo agents serving more than 250,000 U.S. importers and exporters.