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U.S. proposed regulations: Customs broker verification of importer’s identity

Customs broker verification of importer’s identity

U.S. Customs and Border Protection (CBP) today released for publication in the Federal Register a notice of proposed rulemaking that would amend the CBP regulations to require customs brokers to collect certain information from importers to enable the customs brokers to verify the identity of importers, including nonresident importers.

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The proposed changes are being made to implement a measure under the Trade Facilitation and Trade Enforcement Act of 2015, which directs CBP to promulgate regulations to require brokers to verify the identity of the importers who are their clients.


Read the proposed regulations [PDF 425 KB]

Overview

CBP proposes to amend the CBP regulations to standardize the process by which customs brokers verify the identity of their clients, specifically importers and nonresident importers. The proposed regulations illuminate, for the international trade community and the public in general, the important role customs brokers have in verifying prospective clients and in providing the quality and integrity of the information they keep. As noted in the preamble to the proposed regulations, when brokers verify the bona fides of clients, “CBP is better assured that importers are conducting legitimate trade transactions.”

CPB intends to formalize the verification process and require that a re-verification process be carried out by brokers every year. The goal would be that a broker’s knowledge of its importer client would be improved, and that this improved broker knowledge could allow for commercial fraud prevention and revenue protection and help prevent the use of shell or shelf companies by importers that attempt to evade the customs laws of the United States. Further, CBP stated that preventing the use of shell or shelf companies by importers would help reduce instances of a misclassification of merchandise to avoid duties, protect against intellectual property rights violations, reduce antidumping/countervailing duty (AD/CVD) infractions, and reduce the importation of unsafe merchandise.

Comments on the proposed regulations must be received on or before a date that is 60 days from August 14, 2019 (the date when the proposed regulations are scheduled to appear in the Federal Register).

 

For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:

Doug Zuvich
Partner and Global Practice Leader
T: 312-665-1022
E: dzuvich@kpmg.com

John L. McLoughlin
Principal and East Coast Leader
T: 267-256-2614
E: jlmcloughlin@kpmg.com

Andy Siciliano
Partner and National Practice Leader
T: 631-425-6057
E: asiciliano@kpmg.com

Steve Brotherton
Principal and Global Export and Sanctions Leader
T: 415-963-7861
E: sbrotherton@kpmg.com

Luis (Lou) Abad
Principal, Washington National Tax
T: 212-954-3094
E: labad@kpmg.com

Irina Vaysfeld
Principal
T: 212-872-2973
E: ivaysfeld@kpmg.com

Amie Ahanchian
Managing Director
T: 202-533-3247
E: aahanchian@kpmg.com

Robert Waldrop
Principal
T: 212-954-8117
E: rwaldrop@kpmg.com

Gisele Belotto
Managing Director
T: 305-913-2779
E: gbelotto@kpmg.com

Christopher Young
Principal
T: 312-665-3229
E: christopheryoung@kpmg.com

Andy Doornaert
Managing Director
T: 313-230-3080
E: adoornaert@kpmg.com

George Zaharatos
Principal
T: 404-222-3292
E: gzaharatos@kpmg.com

Jessica Libby
Managing Director
T: 612-305-5533
E: jlibby@kpmg.com

 

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