E9-24489. Customs Broker License Examination Appeals

AGENCY:

Customs and Border Protection, DHS.

ACTION:

Final rule.

SUMMARY:

This final rule amends the U.S. Customs and Border Protection (CBP) regulations, which govern the licensing and conduct of customs brokers. The rule specifies the proper CBP official who is authorized to decide the final administrative appeal of a failing grade on the customs broker written examination. The current regulations provide that the final administrative appeal on a failing grade on the broker's exam should be sent in writing to the Secretary of Homeland Security, or her designee. This final rule amends the CBP regulations to specify that examinees should submit final administrative appeals to the Assistant Commissioner, Office of International Trade.

DATES:

This final rule is effective on October 13, 2009.

FOR FURTHER INFORMATION CONTACT:

Russell Morris, Broker Compliance Branch, Trade Policy and Programs, Office of International Trade, [phone].

SUPPLEMENTARY INFORMATION:

Background

Section 641 of the Tariff Act of 1930 (Tariff Act), as amended (19 U.S.C. 1641) authorizes the Secretary of the Treasury to prescribe rules and regulations relating to the customs business of brokers as necessary to protect importers and the revenue of the United States. Specifically, section 641 provides that a person (an individual, corporation, association, or partnership) must hold a valid customs broker's license and permit in order to transact customs business on behalf of others. In the case of an applicant for an individual broker's license, section 641 states that the Secretary of the Treasury may conduct an examination to determine an applicant's qualifications for a license.

The Homeland Security Act of 2002 (Homeland Security Act) generally transferred the functions of the U.S. Customs Service from the Treasury Department to the Secretary of Homeland Security. 6 U.S.C. 101 et seq. Section 412 of the Homeland Security Act (6 U.S.C. 212) provides that the Secretary of the Treasury retains customs revenue functions unless the Secretary of the Treasury delegates the authority to the Secretary of Homeland Security. The regulation of customs brokers is encompassed within the customs revenue functions set forth in section 412 of the Homeland Security Act. On May 15, 2003, the Secretary of the Treasury delegated authority related to the customs revenue functions to the Secretary of Homeland Security subject to certain exceptions. See Treasury Order No. 100-16 (Appendix to 19 CFR Part 0). Since the authority to prescribe the rules and regulations related to customs brokers is not listed as one of the exceptions, this authority now resides with the Secretary of Homeland Security.

Pursuant to section 641 of the Tariff Act, part 111 of title 19 of the Code of Federal Regulations sets forth the conduct and licensing requirements for customs brokers. Section 111.11 sets forth the basic requirements for obtaining a broker's license, including the requirement that the applicant must obtain a passing grade on the written examination within a 3-year period before submitting the application for a broker's license. 19 CFR 111.11.

Section 111.13(f) provides that an examinee can appeal a failing grade on the written examination by first filing a written appeal with Trade Policy and Programs, Office of International Trade, U.S. Customs and Border Protection (CBP), within 60 calendar days after the date of the written notice of the examination results. 19 CFR 111.13(f). After reviewing the submission, CBP provides the examinee with a written notice setting forth the decision on the appeal. If CBP's decision on the appeal reaffirms the result of the examination, the examinee may subsequently request review of CBP's decision on the appeal by writing to the Secretary of Homeland Security, or her designee, within 60 calendar days after the date of the notice from CBP.

Explanation of Amendment

As noted above, the Secretary of the Treasury delegated to the Secretary of Homeland Security the authority to prescribe rules and regulations relating to customs brokers. The Secretary of Homeland Security, in turn, delegated some of this authority to the Commissioner of CBP including the authority to regulate brokers. See Delegation Number 7010.3, dated May 11, 2006.

On October 19, 2007, CBP published a final rule in the Federal Register, at 72 FR 59166, setting forth technical corrections to the CBP regulations to reflect changes in CBP's organizational structure. Among the many technical changes in that document, consistent with the Homeland Security Act and Treasury Delegation 100-16, CBP amended 19 CFR 111.13(f) to remove the Secretary of the Treasury as the official with the authority to issue the final administrative appeal on a failing grade on the broker's exam and gave the Secretary of Homeland Security or her designee that authority.

Since the publication of the final rule regarding this particular technical amendment, CBP has determined that the Assistant Commissioner in CBP's Office of International Trade is the most appropriate official to issue the final administrative appeal on a failing grade on the written customs broker's exam. This designation is consistent with DHS Delegation Number 7010.3, which delegates the authority to regulate customs brokers to the Commissioner of CBP. In addition, CBP notes that the Office of International Trade is staffed with examination subject matter experts and is uniquely positioned to independently and expeditiously review examination appeals. Accordingly, § 111.13(f) is being amended in this document by removing “Secretary of Homeland Security, or his designee” and adding, in its place, “Assistant Commissioner, Office of International Trade, U.S. Customs and Border Protection.”

Administrative Procedure Act

Since this rule pertains to matters relating to rules of agency organization, procedure, or practice, this rule is not a substantive rule and is exempt from the notice and comment rulemaking requirements under the Administrative Procedure Act. See 5 U.S.C. 553(b)(A). In addition, the delayed effective date requirement of 5 U.S.C. 553(d) does not apply to this rule for these same reasons.

Regulatory Flexibility Act

Because this rule is not subject to the notice and public comment procedure requirements of 5 U.S.C. 553, it is not subject to the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).

Executive Order 12866

These amendments do not meet the criteria for a “significant regulatory action” as specified in Executive Order 12866. Therefore, the Office of Management and Budget (OMB) has not reviewed this rule.

Signing Authority

This document is being issued by CBP in accordance with § 0.1(b)(1) of the CBP regulations (19 CFR 0.1(b)(1)).

List of Subjects in 19 CFR Part 111

• Administrative practice and procedure
• Brokers
• Customs duties and inspection
• Imports
• Licensing
• Reporting and recordkeeping requirements

Amendments to the CBP Regulations

For the reasons set forth above, part 111 of title 19 of the Code of Federal Regulations (19 CFR part 111) is amended as follows:

PART 111—CUSTOMS BROKERS

1. The general authority citation for Part 111 continues to read as follows:

Authority: 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized Tariff Schedule of the United States), 1624, 1641.

2. In § 111.13, paragraph (f) is revised to read as follows:

§ 111.13

Written examination for individual license.

* * * * *

(f) Appeal of failing grade on examination. If an examinee fails to attain a passing grade on the examination taken under this section, the examinee may challenge that result by filing a written appeal with Trade Policy and Programs, Office of International Trade, U.S. Customs and Border Protection, Washington, DC 20005 within 60 calendar days after the date of the written notice provided for in paragraph (e) of this section. CBP will provide to the examinee written notice of the decision on the appeal. If the CBP decision on the appeal affirms the result of the examination, the examinee may request review of the decision on the appeal by writing to the Assistant Commissioner, Office of International Trade, U.S. Customs and Border Protection, within 60 calendar days after the date of the notice on that decision.

Dated: September 21, 2009.

Janet Napolitano,

Secretary.