2013 NCBFAA Annual Report



President’s Report
By Darrell Sekin, Jr.
        In some ways writing this report makes me feel like Bill Murray's character Phil Connors in the movie Groundhog Day as many of the items we tackled this year are the same ones we tackled last year and the year before. I guess one could say we are relentless. Nonetheless, there were a few new wrinkles in 2013.
        Government, in one way or another, affects virtually every aspect of what we do in our industry. So, it is no surprise that one of the more significant events of 2013 was the government shutdown. Once again, the members of this Association rolled up their sleeves and worked together with anyone they could find in the various government agencies who could still work with us. Fortunately, a handful CBP top level officials, almost single handedly, helped keep commerce moving. Many other government agencies simply took a hiatus and disappeared. What could have been a complete disaster, brought on by a broken Congress, was turned in to an inconvenience thanks to the efforts of CBP and many of our volunteer members who worked with CBP to help iron out the problems. I think this says a lot about the relationship that we have with CBP and the level of commitment of the high level officials in that agency.
        Our Customs Committee continued a busy schedule in 2013. ACE is moving ahead with an end in sight. In just about a short year and a half CBP will mandate the use of ACE for all electronic portions of the CBP cargo process. Thanks to the efforts, over many years, of many of our members through the Customs Committee, the TSN, various ACE sub-committees, and our hosting of the TSN vendor conferences we were able to get ACE back on track and moving towards a successful completion.
        ISF came into full force this past year with the enforcement phase of the program. While ISF is not really new to any of us there were some concerns about how the enforcement would be implemented. The ISF Sub-Committee worked together with CBP HQ staff to insure that the enforcement phase of ISF did not turn into an administrative nightmare.
        The Role of the Broker Sub-Committee continues to work ahead with CBP on various issues that fall under this endeavor. The issue of "customs business" - what it is, what it isn’t, what it should be – is extremely essential to the continued viability of the customs brokerage industry. The more that we allow infringement on the concept of "customs business" the more precarious our continued existence becomes. Along with the issue of "customs business" goes the issue of the district permit scheme. The permitting scheme has been a subject of much discussion over the years and deserves to be vetted out thoroughly by the brokerage industry, taking into consideration today’s business environment.
        One of the accomplishments that I am most encouraged by, involving role of the broker, is in the area of continuing education. I feel that we are ahead of the curve on this issue in that we have in place, through our NEI, a solid program that allows our members to maintain their level of professionalism through the various webinars, seminars and courses offered on a continual basis. Regardless of what comes out in the way of required continuing education we are ahead of that curve and offer real value to our membership and the trade community in this area.
        The Transportation Committee had a particularly busy year in 2013 with new items on their plate in the way of the Federal Maritime Commission's (FMC) Advance Notice of Proposed Rulemaking (ANPRM) and also with the enactment of the MAP-21 law. Both of these items have involved a great deal of time and expense for the Association.
        The FMC ANPRM, if it adopted as proposed, would have increased bond sizes, increased regulation and increased administrative expenses for all of our members, none of which is warranted in our opinion. We have had to expend a great deal of time and money to hopefully get this rule headed in the right direction.
        The MAP-21 has increased bond sizes and administrative expenses for all of those registered as property brokers. The law has also likely caused many non-registered members to enter into this regime, simply out of fear of the law. We were able to get put into the law wording that exempts customs brokers and freight forwarders from the law under certain circumstances; however each firm has to weigh their own tolerance for risks. Again, overreaching government action has caused businesses to incur increased expenses and unnecessary administrative overhead.
        The Regulatory Agencies Committee (RAC) has continued their process of trying to educate the Food and Drug Administration on what we as customs brokers do and how we fit into the overall picture. Headway is being made slowly but surely. The RAC has also continued their engagement with the Consumer Product Safety Commission and has likewise made steady progress with this agency on what we do and where we fit into the big picture.
        With this being my last year as president of the Association I want to thank everyone who has contributed their time and effort to this Association and to helping me personally as president. The one thing that has continually impressed me over the years is the tenacity and ingenuity of the many volunteers in this Association who refuse to be down and simply take what is being dealt out. Were it not for the selfless efforts of all of these people commerce would surely not move as efficiently as it does today nor would our industry have the input that we have today. There are a few people that I would like to say a special thanks to who have really gone above and beyond. People like Jan Fields, Mary Jo Muoio, Dan Meylor, Ken Bargteil, Roger Clarke, Scott Larson, Jeff Coppersmith, my fellow officers and many others. I would also be remiss if I did not say a special thanks to Chip Bown who retired at the first of the year and will be sorely missed by the industry. I also want to extend a special thanks to our three legal counsels, Alan Klestadt, Ed Greenberg and Jon Kent without whose guidance and support I would have never made it.
        Over the years there have been many gloom and doom forecast about our industry yet, like Phil Connors in Groundhog Day, we are still here today and will still be here tomorrow, which is a testament to the many forward thinking and hardworking individuals in the industry. We have to continue to strive as an industry to make sure that we don’t get commoditized and that we are recognized for the real value that we bring to the international community. We are the people who allow international trade to flow smoothly.


Executive Vice President’s Report
By barbara reilly, CAE
        Like the Logistics Industry, the non-profit Association Industry had to examine the impact of uncertain economic conditions in our sector. While many were recovering the last few years from some of the harshest economic conditions they had ever faced, a comparative analysis that reflected the resilience of our members in times of both austerity and recovery demonstrated increased stability and optimism. This allowed us to redirect our focus away from short-term solutions to more deliberate strategies that bring promise of growth as the Association ends its 115th year.
        So what has changed for many associations since the onset of the past recession? For one thing, many of us have learned from the experience and are now more confident in our ability to anticipate and plan for the impact of the economy on our associations. Survival is paramount in a shrinking economy and during this time we strongly focused on member development and retention. We specifically took steps to aggressively bring the membership benefit portfolio into the forefront of priorities, and along with the guidance of Chairman Bruce Goodwin and his Committee Members Anne Marie Bush, Kathy Carlton, Dennis Kelly, Kathy Murray and Mary Peglow, we were able to take a more active approach to assisting members, provide added value to membership through information content, and continue the dialog on how best that can be accomplished.
        The offsite membership department was brought back into the HQ office, where broadened promotions and new member engagement programs have been implemented, as heightened association awareness continues through increased external marketing scheduled to continue through the upcoming year. Along with the ongoing efforts of the Affiliated Presidents Network Chaired by Scott Larson and Michelle Francis these efforts have ultimately resulted in expansion of industry and organizational programs and services, as NCBFAA Membership flourishes, and member engagement reaches an all-time high. Although membership retention and recruitment are some of the top areas of concern for 2014, in order for NCBFAA to accomplish its goals and missions these priorities are expected to broaden, and thereby increase overall awareness.
        Generally speaking, continued growth is best accomplished through improved and increased sessions where our members benefit from the numerous opportunities of sharing knowledge with other industry professionals whether through the ever expanding NCBFAA website content and resources, regularly scheduled news updates and analysis from our Communications Department and contributors, the significantly busy NCBFAA Volunteer Committee Meetings (more than 300 were logged in 2013), NEI webinars, or Annual Conferences focusing on both advocacy and our federal regulatory partner updates. Although the federal government shutdown and budget sequestrations of 2013 had an immediate effect on our conference speaker attendees, with their cooperation we were able to use other technological solutions that minimized the impact of their off-site participation.
        With the assistance of the NCBFAA Team that includes NEI Executive Director Federico "Kiko" Zuniga, Projects Coordinator Brittany Dismuke, NEI Director Cecilia Ferrara, Membership Development Director Chrystal Hunter, Communications Director Tom Mathers, Accounting Director Kimberly Murphy, Meeting Department Director Kim O'Beirne, NEI Administrative Assistant Brandon A. Pinkney, NEI Development & Compliance Coordinator David H. Tran and Project Assistant to EVP Drenda Williams, our Association, as the Voice of the Industry, is able to continue bringing the findings of our dedicated Volunteers and our member consensus to the proverbial "table," which ultimately reinforces the role of NCBFAA for at least the next 115 years. And in closing, we would like to thank President Darrell Sekin for his dedicated leadership and his yeoman efforts on behalf of our Association and its membership.

Treasurer’s Report
By William S. App, Jr.
        Because this is my last Treasurer’s report, I want to express to you what a pleasure it was to serve you as well as thank you for the confidence that you had in me.
        The job of Treasurer in an Association, or any organization for that matter, is filled with accounts, figures, projections, decisions, essentially, an unending string of dry and objective facts. But, what I have come to realize, is that behind each of these facts is a need and a purpose, in effect, a reason for them to be. And that reason is the membership of the NCBFAA.
        With that knowledge in mind, I have been happy to volunteer my time and efforts because I have long believed the NCBFAA is critical to the health and well-being of our industry. My personal association with the NCBFAA goes back many years and over that time I have seen many changes in our business but one thing has always remained constant, the NCBFAA’s efforts on our behalf.
        In concluding my two–year term as NCBFAA Treasurer, I am pleased to report that your Association’s senior management remains committed to conducting the affairs of your Association in a fiscally responsible manner that enables it to achieve the mission and service goals of the NCBFAA. As a result of this effective stewardship, the state of our Association’s financials is solid and all indications are that they will remain so in coming years. Your Association leadership has effectively executed its fiduciary obligation in shepherding the NCBFAA’s finances by paying close attention to the details of the budget and only authorizing those expenses deemed absolutely essential to furthering its mission.
        Throughout my tenure as your Treasurer a recurring theme has been the unrelenting pressure presented by the ever-present regulatory challenges that originate in the halls of Congress and the corridors of federal and state agencies. The efforts required to confront these challenges, especially those with the potential to be particularly disruptive to our businesses, are often time-consuming and expensive. But failure to engage these undertakings runs counter to our mission of securing the interests of our industry and protecting our members.
        That is why the Association has assumed the responsibility to help guide these regulators as they fine-tune their regulatory docket to ensure that, while they can accomplish their goal, it is not at the expense of the commercial interests of our members and the nation, at large. As I noted this activity comes with a price but thanks in large measure to the loyalty and devotion of our membership the NCBFAA has enjoyed the financial strength over these past few years to weather these demands on our resources.
        In fact, because of this substantial support shown by our membership we have had the luxury of being able to adequately fund our Customs Counsel, Transportation Counsel and Legislative Representative in their myriad endeavors on our behalf. The confidence of our Officers and Board of Directors in the financial wherewithal of the Association was measured during 2013 when it was called on to approve a 2013 budget that was $45,000 in the red. It did but thanks to the yeoman efforts of all the Committee Chairs who did an excellent job of holding down spending while simultaneously delivering the services that our membership expects and the fine work done by our DC office management and accounting staff in their day-to-day oversight of the budget, we finished 2013 strongly in the positive.
        Of course, we still face these regulatory challenges in 2014, but owing to our very healthy financial position, I am supremely confident that we will succeed in our efforts as long as we maintain these following standards.
        The Budget Committee will:

  • Closely scrutinize all expense accounts
  • Monitor more closely all spending against the budget and report any discrepancies
  • Continue to make suggestions on how to improve the finances to the Board through the Executive Committee
  • Work with all parties to explore ways of spending our limited funds to the best benefit of the association.

The Board of Directors should:

  • Support the work of the association and its committees by actively working with the committees and encouraging firms to attend the seminars and conferences of the association
  • Actively solicit new members and sponsors for the Annual Conferences
  • Actively support and encourage a positive PR effort on behalf of the association
  • Listen carefully to financial suggestions and act in the best interest of all members

Our Washington staff should:

  • Carefully monitor expenditures, making sure that expenditures are properly approved and coded to the proper account
  • Monitor administrative expenses and make suggestions for possible savings in these expenditures
  • Pursue possible alternative sources such as grant money and reductions in expenses such as the use of interns.


Customs Committee Report
By Mary Jo Muoio, LCB, CCS
        The Customs Committee and strategic sub-committees and working groups had full and productive agendas throughout 2013. First and foremost overarching all of our efforts was our attention to maintaining our excellent professional relationship with the leadership of CBP. This required extra attention throughout the year as we experienced numerous changes in CBP personnel. Notably, we had no less than three changes in Commissioners: Acting Commissioner David Aguilar retired and Thomas Winkowski ascended and just recently we had the confirmation of R. Gil Kerlikowske as the first Commissioner since 2009. Each change in Commissioner touched off a round of changes in the Acting Assistant and Deputy Commissioners not to mention other key leaders. We successfully earned the respect of each of these leadership teams and maintain very successful working relationships. Acting Commissioner Winkowski conveyed his appreciation for the approach in a letter, speaking of the Customs Committee and NCBFAA, "Your engagement and openness with us is very much appreciated. We know that there are many important issues that we can continue to find solutions by working together." While not always agreeing on the issue, path, or solution, we are always able to have a productive and influential conversation with CBP.
        The Customs Committee considers CBP actions with one filter in mind: how does this impact the membership of the NCBFAA and our industry. At times, we push back. Recent CBP messaging focused on their trade transformation efforts and how their actions will "drive down the transaction costs of importing." We felt that this sent a confusing message to importers as often changes implemented by CBP do not remove costs but rather move processes and costs from CBP to the brokerage community. The brokerage community is then in the difficult and undesirable position of having to explain this to importers who understood the Government to say that their costs would go down. One indication that our voice was heard came in a speech by Acting Deputy Commissioner Alan Gina in July. When addressing Broker ISA Pre-Certification pilot trainees, he said, "I am not sure if you know Mary Jo Muoio or not, but we have met several times with her, Darrell Sekin, Geoff Powell and others on issues such as the role of the broker, facilitating trade, and CBP trade transformation. One point she has driven home and I have it pinned in my mind is that every time Customs says we are going to drive down transaction costs for the importer, it costs the brokers money. We now know that and are looking at how we can work smarter without costing you guys money!" In a later meeting with CBP, Acting Commissioner Winkowski offered the same recognition saying, "We get it."
        Nothing impacts our membership and industry more directly than the work on changes to the broker regulations. The challenge offered by CBP of "where does the brokerage industry see itself in the future" continued to be the test against which much of the committee work was measured.
        Speaking to the connection between the Role of the Broker and regulatory changes, Acting Deputy Commissioner Gina said that, "CBP needs the help of the NCBFAA envisioning the future. As business regulators, CBP does not want to regulate brokers out of business." He went on to say that brokers are critical to CBP and CBP wants to "assist brokers in being successful." The Acting Commissioner continued that he sees the brokerage community as continuing to play a bigger role than it plays today.
Regulatory Changes—Section 111
        Following much engagement, regulatory worksheets have been prepared by CBP which cover several key areas of change.
  • Bona fides - As validating importer identities continued to be an area of focus for CBP, it was on our agenda as well. The Customs Committee was asked by CBP to review proposed changes to Customs Form 5106. The Customs Committee focused on ensuring that the burden did not rest unduly on the shoulders of brokers. We promoted regulatory change which would require importers to provide, and brokers to collect, the additional identifying information CBP seeks. We also provided input to CBP on proposed information collection and directions for use of the CF5106.
  • Broker Penalty Provisions - While CBP committed to focus on meaningful penalties, a long-term statutory goal for the NCBFAA is to obtain prior disclosure privileges for customs brokers.
  • Customs Business - The dialogue on how the definition applies to our businesses remains to be mainly within our membership however it is on CBP’s radar as well. CBP reports that they hear from stakeholders that there needs to be changes which permit interaction across multiple parts of a business.
  • Continuing Education - While CBP embraced the establishment of a continuing education requirement for licensed brokers, there was skepticism and hesitation by some brokers. It was necessary for our members and all licensed brokers to understand that "care of the license" was important to us and to CBP and that CBP sees continuing education as taking care of the license. The Customs Committee and CBP conducted outreach to the trade community. At this time CBP has written a regulatory worksheet for the continuing education regulations—based extensively on the NCBFAA proposal—and is going through the economic impact analysis. Acting Deputy Commissioner DiNucci stressed recently that CBP is still excited about continuing education. Hit the books folks!
  • Permits - The leadership of the NCBFAA and the Customs Committee is actively surveying the membership and considering concepts for the permitting structure of the future. Although this topic appears on many trade agendas, CBP has assured the NCBFAA that they are in no rush to force a change. However, CBP forces such as CEE organization and ACE functionality test the limits of the current permit structure. Business forces such as consolidation and automation also stress the limits of the benefits of the current permit structure. Association motivation to focus on the value of the license and promotion of the licensed broker are also at risk with the current regulations. The dialogue within the membership of the NCBFAA and between the NCBFAA and CBP will continue.
  • Licensing - New leadership in the Broker Management office has committed to "cleaning up" the licensing process and reducing delays. The Customs Committee made suggestions on the application process, improving the collection of information at the port, and streamlining headquarters processing.

        CBP has confirmed that several open issues are about to be resolved and closed. We have been pursuing revocation of rulings on confidentiality which constrain broker business needs. Regarding employee reporting, CBP orally advised that brokers are required to report only those personnel involved in transacting customs business for the firm. Written instructions have been requested. The Broker Exam working group has made tremendous headway on enhancements to the exam process and content. Some process changes have already been put in place and soon the format and content of the exam will be changed based on work done by this working group. The objective of the Working Group was to engage with CBP on ways to structure an exam that is efficient, consistent, and tests both regulatory knowledge and the application of that knowledge in functions performed by licensed customs brokers.

Trade Transformation

  • Centers of Excellence and Expertise Broker Working Group - The Customs Committee CEE Working Group holds regularly scheduled conference calls with CBP to address day-to-day operational issues faced by brokers and to ensure that the NCBFAA has a key voice in the ongoing development of this process. The topics addressed included ACH indicators and CEE team numbers, document submission to the CEEs, email standardization, paperless rates, and brokers as conduits for communication with the importer. The engagement of the NCBFAA Working Group with CBP led to CBP establishing a CBP Working Group on the CEEs pulling representation from the NCBFAA and other segments of the trade.
  • Trusted Trader Programs—The Broker-Known Importer Program - The NCBFAA concept is a unique addition to the Trusted Trader Programs CBP developed. CBP expressed an interest in leveraging the relationships that brokers have with clients. The Customs Committee expressed our interest in continuing to have an important role in the trade process and to support the CBP mission while maintaining our business and fiduciary relationship with our clients. Both parties see the NCBFAA Broker-Known Importer Program as a way to bring value to all parties—CBP, importers and, last but not least, brokers. Acting Deputy Commissioner Gina let us know that the concept was "very well received." CBP leadership recently confirmed that they are "on board" and that Troy Riley has been assigned to meet with the Committee to construct a delivery schedule and to set the groundwork for expansion of the program and benefits.

Automated Commercial Environment
        This past year was characterized as the year of getting serious about ACE. With CBP announcing the "drop dead" dates for ACE usage, the Customs Committee focused on ensuring that our members had the tools necessary for planning and transitioning and that the system performed to our needs and expectations. Some of the tools necessary come from CBP and some from private industry. Before the brokers can switch from ACS to ACE our software providers need to have the programs developed, tested, and available.
        In 2013 the NCBFAA Customs Committee stepped in to host an ACE Software Developers conference on behalf of CBP; a role we reprised in February 2014. We did this to ensure that the software developers upon whom we depend had access to CBP information and experts as they prepare to meet our needs. Feedback from the brokers and software developers in attendance prove that these sessions were worthwhile and productive. Acting Commissioner Winkowski and Executive Director Brenda Smith thanked the NCBFAA for making these critical conferences happen.
        The work of the Trade Support Network is also important to the development of ACE and to ensuring that our needs as users are met. The Customs Committee and the NCBFAA have active leadership roles and involvement in the TSN and are ever watchful of the needs of brokers. The committee championed the importance of a TSN plenary session giving us another face-to-face dialogue with CBP.
        From a systems and functionality perspective, the Committee worked on many issues. These diverse issues included expansion of ACE release, submitting documents via the Document Imaging System and email attachments, ACE employee reporting portal - upon review of the functionality, we raised concerns with CBP regarding the possible exposure of confidential personnel information - and many more.
        Interrelated to ACE development is the development of the International Trade Data System (ITDS). In the past year we worked with CBP as pilots for FSIS and EPA have begun. With the deadline for agencies to use ITDS established by Executive Order, the Customs Committee made recommendations to NCBFAA leadership on where we should participate to stay engaged and ensure that our interests are considered.
        The message from the Customs Committee has been that our members need to be aware of the development schedule and ACE deadlines and make the proper plans for their individual businesses.

Importer Security Filing
        The NCBFAA worked closely with CBP and our clients on the development of the ISF regulations. This work has continued through the ISF Sub-Committee which meets regularly with CBP. The discussions focus on addressing technical questions related to filings encountered by our membership. Questions addressed include bonds, statute of limitations, messaging, abandoned cargo, ISF report cards and measuring timeliness. The issues we raised were answered and published in the ISF frequently answered questions document. As CBP transitioned into enforcement, we continue to work with CBP to ensure that their enforcement policy is responsible. Our work resulted in CBP agreeing to extend the period of headquarters review and to extend the guidance that headquarters personnel will give the port on the merits of issuing a liquidated damages claim.

Trade Policy and Programs
        As another illustration of how CBP looks to the brokerage community, Troy Riley briefed us on the added enforcement focus of this office. During a joint meeting Mr. Riley stated that, "We can do facilitation; now we need to focus on enforcement." For the Customs Committee this meant having dialogue with CBP on ways licensed brokers can support compliance with free trade programs, ADD/CVD cases, intellectual property rights and similar concerns.
The membership of the NCBFAA has benefited from the service of the countless volunteer members who have served on this and other committees and offspring sub-committees, working groups, task forces and the like. Currently the area representatives to the Customs Committee are:

  • Area 1 Amy Magnus
  • Area 2 Mary Jo Muoio
  • Area 3 Kenneth Bargteil
  • Area 4 Myra Reynolds
  • Area 5 Scott Larson
  • Area 6 Gary Ryan
  • Area 7 David Meyer
  • Area 8 F.C. (Pancho) Averill
  • Area 9 Daniel Meylor

        The roster of the Customs Committee goes way beyond the Area Representatives as the Committee is supported by many wise advisors including NCBFAA officers, NCBFAA Past Presidents and past committee chairs and co-chairs. We are also expertly represented and counseled by NCBFAA Customs Committee Counsel Alan Klestadt and NCBFAA Legislative Representative Jon Kent.
       The issues addressed by the Customs Committee are as varied as our businesses. Sub-committees or working groups have been established for the more enduring issues; these groups come and go as issues warrant and participation is open to any NCBFAA Regular member. Currently there are groups established to focus on the:

  • Importer Security Filing chaired by Tom Malloy
  • Remote Location Filing chaired by John Peterson
  • Broker Regulations and Role of the Broker chaired by Ken Bargteil
  • Trade Interruption and Resumption Planning chaired by Mary Ann Comstock
  • Centers of Excellence and Expertise chaired by Mark Shacklette
  • Automation chaired by Fred Klemashevich
  • ADD/CVD Sub-Committee chaired by Myra Reynolds.

       Myra and Michelle Maslow-Hauser always volunteer to take minutes of committee meetings and do an excellent job.
       The Customs Committee meets monthly on teleconferences organized by Committee Vice-Chair Daniel Meylor as well as in person several times a year and also holds full-day meetings with CBP several times a year. Many, many single-subject meetings are held throughout the year both as internal meetings and with CBP as issues warrant. The sub-committees meet on individual schedules.
       The Customs Committee and supporting groups attempt to focus our resources on issues with the greatest impact on the NCBFAA membership. Local issues are usually addressed by the Area or APN Representative from that locale. The Customs Committee monitors local issues to watch for trends or situations that should be addressed nationally. While never making the official Committee agenda, there are countless questions answered and issues resolved on a weekly basis. Dan Meylor jumps right on these issues and gets the right parties talking to each other to resolve. He also ensures that the tremendous communication demands of the committee are handled efficiently and consistently.
       The Customs Committee works closely with other NCBFAA committees and groups including the Regulatory Agencies Committee, Drawback Committee, Carriers Best Practices Committee, Large Broker Forwarder Committee, Affiliated Presidents Network, CESAC and the Transportation Committee.
       The Customs Committee continued the tradition which we started last year of coordinating our meeting agendas with the Transportation Committee to foster intercommunication between the committees. This is seen as increasingly important as CBP leadership has acknowledged that they need to focus more resources on export compliance. Acting Commissioner Winkowski told the Customs Committee that CBP needs to develop an export strategy—and we, the NCBFAA Customs and Transportation Committees, need to be there.
       As someone who has been active in the NCBFAA for the past 25 years I have a little insight about the caliber of talent in our Association. It runs deep and wide. It also runs free - meaning that this Association is full of people who are capable of and eager to serve our members. It has been my pleasure to briefly serve as Customs Committee Chair. I look forward to new leadership and will continue to serve our common interests whenever I can.


NCBFAA Drawback Committee
By Michael V. Cerny
       In 2013, the Drawback Committee again worked toward drawback modernization on a number of fronts. First, many members of our committee are engaged with Customs through the Trade Support Network and other organizations regarding the development of ACE. For filers of consumption entries, the transition to ACE is imminent. By contrast, for drawback filers, there is nothing in ACE right now to which drawback filers can transition and any future process is still being developed. However, drawback has now been scheduled by CBP to be completed and deployed in ACE in 2016. We are working closely with Customs to shape how this future process will look, and to find ways to enhance functionality to the benefit of our members, the trade, and Customs. We anticipate working on the ACE development of a truly electronic drawback summary that will be transmitted via ABI in ACE, possibly with the use of document imaging for submission of backup documentation.
       Second, we continued working to obtain uniformity among the drawback centers, as well as to streamline certain cumbersome and outdated drawback processes. Members of our committee worked through a joint Customs-Trade working group and developed specific proposals for modernizing proof of export requirements, streamlining privilege applications, and addressing liquidation issues. As a result, Customs has issued a shorter and more to-the-point privilege application template. In addition, a proposed regulatory change allowing submission of records kept in the ordinary course of business to prove export is in the final stages of being issued by Rulings & Regulations at CBP. We were also challenged this year with proposals by CBP to fast track the movement of drawback into the new Centers of Excellence. Our membership believed that moving the current drawback process into a CEE would be counterproductive. We provided a position paper to Customs and the current Customs thinking is now that drawback will not be included in the CEE until it becomes completely automated in ACE. We appreciate CBP listening to the voices of our committee members.
       Third, we are continuing to monitor the activities in Congress to reform the drawback process through legislation. We worked with Senate Finance and House Ways & Means staff on language to be included in the larger Customs Reauthorization bill that would simplify drawback. As always, we are very thankful to NCBFAA’s Legislative Counsel, Jon Kent, for his hard work in ensuring that our voices are heard on Capitol Hill. We will continue to fight for statutory language that is acceptable and beneficial for our membership.
Members of our committee have been working with the NEI in developing the new Certified Drawback Specialist Program. This program promises to provide a specific designation for those brokers specializing in drawback. We hope to have the program up and running by the end of 2014. Many thanks to NEI Chairman Ken Bargteil for working with our committee to develop this important program.

Legislative Representative’s Report
By Jon Kent
       It’s no surprise to anyone to report that the US Congress has done very little in 2013; it will surprise us if Congress puts on a legislative burst in 2014 and concludes several matters of interest to the Association.
The reasons for this lack of output have been widely reported: collisions over the debt limit and federal budget, "sequester," Obamacare, and a counter-productive partisan one-upmanship between Democrats and Republicans. The good news is that this may be abating; the bad news is that 2014 is an election year. The spring primaries and fall elections are never good for difficult legislation, but we shall see.
       One potential vehicle for trade is the so-called "Trade Promotion Authority" that would strengthen the President’s hand in negotiating trade agreements. There has been some bi-partisan bi-cameral support for the bill introduced January 9; however its future, as of this writing in February, is in doubt.
Tied to this legislation may be a myriad of bills left over from 2013: a Miscellaneous Tariff Bill, a bill to extend GSP, renewal of AGOA, and a customs reauthorization bill. The last, the CBP bill, has been in the formative process for several years, but never advanced.
       Congress however provides other functions than simply legislating, the most important of which is "oversight." This involves Congress’ responsibility to monitor the performance of federal agencies. It may amount to enacting corrective legislation, but most often it is the process of publicly critiquing what an agency does. In 2013, the House Transportation Committee weighed in against the Federal Maritime Commission’s proposed rule regulating ocean transportation intermediaries – about which NCBFAA has registered vocal opposition. For example, the rule would require OTIs to renew their license to do business every two years. Oversight is a way that Congress can exert a positive influence even if it is not legislating.
       Also on tap for 2014 and left over from 2013 is a water resources bill that addresses the Harbor Maintenance Fee, which has never been spent dollar-for-dollar towards the purpose for which it is imposed – maintaining the viability of the nation’s harbors. The water bill gradually gets us there and could pass early in the year.
       All of us are frustrated with Washington’s lack of productivity. There are signs that – gradually – change is on its way.   We’ll likely never be completely satisfied, nor be unified in our approach to what government could or should do. Nonetheless, we know it needs to get better and, perhaps on Election Day, we’ll vote with more assurance that we can make it so.

NCBFAA PAC Annual Report
By Jon Kent
       Under the leadership of Kathy Murray of CEVA Logistics and Area 7 Board Member, the NCBFAA PAC had a good year of unprecedented proportions. We raised more money and donated the proceeds to more candidates than ever before.
       The PAC donated $18,500 to 18 candidates for the US House of Representatives and US Senate. Ten were Republicans and eight were Democrats. Senators included: Patrick Leahy (D-VT), Mazie Hirono (D-HI), Lindsey Graham (R-SC), Rob Portman (R-OH), Susan Collins (R-ME), Mark Warner (D-VA) and Richard Blumenthal (D-CT). Representatives included: Charles Boustany (R-LA), Ted Poe (R-TX), Tom Petri (R-WI), Bob Goodlatte (R-VA), Sandy Levin (D-MI), Peter King (R-NY), Janice Hahn (D-CA), Charles Rangel (D-NY), Nydia Velazquez (D-NY), Dave Camp (R-MI), and Duncan Hunter (R-CA).
       NCBFAA members were very well aware of our fundraising activities and gave generously to raffles at the Annual Conference and the Government Affairs Conference. A total of $17,582 was raised at these conferences and we need to tip our cap to the tireless work of our team. In addition to the leadership of Kathy Murray, there’s a special "shout out" to Maurine Cecil, Michelle Francis, Leah Ellis, Julie Moore, Anne-Marie Bush, Donna Mullins, Paige Stewart Morgan, Kathy Carlton and Mary Peglow.
       Any encounter with the infectious enthusiasm of these great people resulted, inevitably, in dollars flowing to our political action efforts. And, special mention must be made about the cracker-jack NCBFAA staff that help manage PAC operations.
       The PAC is a separate bi-partisan political arm of NCBFAA, raising voluntary donations for federal candidates. Candidates are selected based on their association with issues crucial to our industry. We believe that their election to the Congress will result in a better future for trade generally and commercial operations specifically.


Transportation Committee Annual Report
By Janet Fields
       Our NCBFAA Transportation Committee represents a broad scope of transportation and logistics activities. We’ve had a busy year addressing Notice of Proposed Rulemakings (NPRM) while adapting to the changes and restructuring of many of the government agencies affecting our industry.
       Our Air Freight Sub-Committee Chair Donna Mullins reports that in 2013 her Sub-Committee participated in discussions and distributed information to our members for several processing developments in the air environment. We supported the industry initiative of Upstream Screening; E-AWB; served as a resource center for many NCBFAA Indirect Air Carriers (IAC) members; and took on the Transportation Security Agency (TSA) for specific definitions of entities and their requirements in the IACSP.
       The TSA deployed KSMS (Known Shipper Management System) 1.4 & IACMS (Indirect Air Carrier Management System) 2.8 and several Air Freight committee members joined a conference call to discuss the changes and give input on other recommendations to the program that would allow for safe and secure air cargo movement as well as enhance IAC Security Coordinator (SC) abilities. Authorized Representatives (ARs) were a topic we received clarity on and Security Threat Assessments (STAs) are still on our target list. At the start of 2013, 100 percent screening came into full force.
       We delivered a dynamic panel at the 39th Annual Conference, Air Cargo Security: Our Challenge/Your Challenge where we had Derek Duiser, Manager Cargo Security for Delta & Kester Meijer Director Operational Integrity for KLM Cargo Worldwide Operations give us the airline perspective and an update from CBP and TSA on the progress of air cargo security programs.
       The Air Cargo Advance Screening (ACAS) pilot was extended in August to allow for more participation from the forwarders and give government an opportunity to improve on the platforms and systems needed to facilitate the collection and review of the data submitted.
       Committee Chair Mullins participated on a security panel for the 2013 CNS Conference alongside industry leaders Doug Lavin, Regional Vice President, North America, International Air Transport Association (IATA); Rula Fakhouri, Manager Airline Services & TSA Compliance, Mercury Air Cargo; Robbie Anderson, President, United Airlines Cargo; and Michael von Loesch, Vice President, Radiant Global Logistics where issues such as Financial State of the Industry; ACAS; The Regulatory Landscape: Current & Futures State; and Data Sharing were addressed.
       We were asked by the DHS Office of Strategy, Plans, Analysis and Risk to forward the information to our members regarding the Department’s Quadrennial Homeland Security Review (QHSR). NCBFAA invited all industry stakeholders to participate and provide feedback and suggestions.
       Air Freight Committee Member Merit Tremper prepared a spreadsheet of airlines which included their handling agents in various US ports as well and the handling charges and methods of payment accepted.
Legislative Counsel Jon Kent kept us updated with his participation in the Aviation Security Advisory Committee (ASAC) and worked on Washington DC air cargo project that will be launched in 2014 – the Global Supply Chain Summit.
       We watched other countries like Israel, Uruguay and Turkey as they adopted electronic transmission requirements for MAWB (Master airway bill) and HAWB (House airway bill) data and deployed air cargo security initiatives. In turn, we made our members aware of the new regulations.
       One of our biggest surprises in 2013 was the departure of Doug Brittin from TSA. We had the opportunity to meet with Tamika McCree, TSA Industry Stakeholder Relations and Warren Miller, TSA Chief Air Cargo Policy and Industry Engagement at our Government Affairs Conference who reassured us that TSA and NCBFAA will continue to have an open dialogue and strong partnership.
       Early in 2013 Chairman Lidinsky stepped down as Federal Maritime Commission (FMC) Chairman and Commissioner Mario Codero was subsequently appointed to this position. In May, the FMC issued an Advanced Notice of Proposed Rulemaking (ANPRM) proposing dramatic changes in the regulations and renewal process for Ocean Transportation Intermediaries. Our Association immediately responded with comprehensive comments explaining the problems that the proposal would cause and urged the withdrawal or reconsideration of this ANPRM. We rallied support within the Transportation Sub-Committees at our June meeting and solicited the FMC for an extension of the due date for comments until August 30, to which there were some 90 responses from companies and associations. Our committee members and counsel also met several times with the FMC Commissioners to further discuss the issues and explain the problems. We are continuing to press the agency to modify the more problematic of the proposed changes. Those efforts will continue over the coming year.
       Our NVOCC Sub-Committee, chaired by Rich Roche conducted an informal survey of NVOCC practices to determine the usefulness of NVOCC Service Arrangements (NSAs) and Negotiated Rate Arrangements (NRAs) and we continue to address this with the FMC. For example, Rich Roche, Ed Greenberg, and several NCBFAA members recently met with an FMC staff working group that was charged with looking into the issue of the effectiveness and need for the current filing obligations for NSAs and service contracts. At the same time, our efforts to reduce the burden of the original NRA rules were successful, so that the regulatory procedures that were initially required have been significantly reduced. We are hoping to achieve the same level of success with respect to the NSA procedures. We continue to have close contact with the FMC and welcome comments from our Association members. Chairman Codero is addressing our 2014 NCBFAA Annual Conference.
       Our Export Compliance Sub-Committee Chairman Paulette Kolba reported on the activities of this Sub-Committee representing our forwarder members’ perspective in matters regarding the regulatory requirements of the various U.S. Government agencies controlling exports, including but not limited to, U.S. Census Bureau (Census), CBP, Bureau of Industry and Security (BIS), State Department and Office of Foreign Assets Control (OFAC). Participation in this Sub-Committee grew substantially during 2013, now consisting of export compliance professionals from close to 30 small, medium and large forwarders, thereby representing a wide range of views and experiences. The Sub-Committee is open to the export compliance responsible person from any member forwarder. Conference calls are conducted monthly.
       Two special meetings were conducted in 2013; one with BIS policy staff to discuss Routed Export Transactions and one with Census staff to discuss Foreign Trade Regulations requirements. This Sub-Committee of very well informed individuals has gained its footing and is considered by several government agency staff as a trusted and valued resource, especially in providing information and real world examples that demonstrate the impact of current and proposed regulations and ideas on the freight forwarding community.
       Last year brought several changes to export control and reporting requirements that have continued into 2014:
  • New Foreign Trade Regulation requirements.
  • Export Control Reform reporting and documentation requirements.
  • AES Reengineering.

       As a service to the membership, the Export Compliance Sub-Committee reviews and evaluates proposed and new regulatory requirements, determining the impact on forwarders, explaining requirements to the membership, and making recommendations to the full Transportation Committee or Board. Additionally, the Sub-Committee regularly discusses trends in outbound enforcement, reaching out to the appropriate government agency with any concerns.
       The Sub-Committee is also committed to providing tools such as the USPPI Responsibility Sheet, which was posted in February 2013 and a new Shipper’s Letter of Instruction "model" which includes new required reporting fields, posted in February 2014, to the forwarding community. These documents are intended to assist forwarders in: clarifying forwarder and US Principal Party in Interest (USPPI) responsibilities; training their staff as well as their export customers on these requirements; and providing a means of gathering the information required to accurately meet export reporting requirements. As an extension of the Sub-Committee commitment to educating and informing the forwarding community, Sub-Committee members have also presented and participated in a variety of panels and webinars.
       As exports transition into ACE, our Sub-Committee will closely monitor implementation and progress.
       Surface Transportation and MAP21 were hot topics in 2013 and continue to be issues in 2014. With implementation of the Federal Motor Carriers Safety Act (FMCSA) increased regulatory and bonding requirements, there has been considerable confusion as to whether a customs broker becomes subject to the FMCSA motor carrier property broker regulations to the extent it issues delivery orders as a part of the customs entry process. As we read the regulations, the bonding and registration requirements do not apply when the domestic transportation is "part of" the international move. We have requested FMCSA to provide its own guidance on this issue, by presenting it with a detailed brief that explains the issue and also explains, based on court precedent, why those activities by a customs broker should not be subject to the MAP21 requirements. We will continue to follow up with the agency in an attempt to provide more definitive guidance to the trade.
       Our Logistics Sub-Committee Chairman, Melzie Wilson, has formed a "Domestic Transportation" Sub-Committee, headed by Merit Tremper, who is tasked with the goal of clarifying when our Association members are acting as property broker, domestic freight forwarder or motor carrier. Our immediate plans are to generate a substitute for Delivery Orders that is intended to hopefully lessen the liability of customs brokers. We anticipate a lively discussion at our 2014 Annual Conference on this subject.
       The Transportation Committee continues to contribute to the NEI’s educational programs.
       We’ve identified several organizations and placed representatives from the NCBFAA to further strengthen our position and goals. Merit Tremper is our liaison on CESAC and attends their conference calls and meetings. Michelle Pluta has been recommended to TSN. We already have several members represented on COAC. Our committee has recommended Liz Gant be accepted as a member of the BIS Regulations and Procedures Technical Advisory Committee (RTAC) and her application is being processed. We are proud to recognize the appointment of Geoff Powell to the BIS President’s Export Sub-Committee on Export administration.
       We look forward to a successful 2014.


NCBFAA Regulatory Agencies Committee Annual Report
By Roger Clarke
       The Regulatory Agencies Committee (RAC) primary mission is three fold. First and foremost is to represent the interests of our membership before the many government agencies besides CBP, who have regulatory authority over imports. Second is to educate these many agencies on your role and capabilities within in the supply chain. Third is to address your specific operational issues affecting your day-to-day operations. This past year has been very challenging for the RAC as many of the new laws passed by Congress are now being implemented by various agencies. During 2013 the RAC’s primary activities have been directed towards the implementation of the Food Safety Modernization Act, Consumer Products Safety new proposals, and the Food and Drug Administration (FDA) Filer Review Guidelines and procedures. The committee continued its work with other trade organizations addressing systemic agency issues to help better understand the agency goals, analyze and suggest improvement to procedures, and assist in the agency’s goal of improved consumer safety through better understanding and education.
       Due to increased pressure from both Congress and the consumer, along with reduced resources many agencies are looking for increased enforcement tools to ensure a higher level of compliance. As the various rules and regulations were being published it became evident that the government does not understand our true role and limited control over the supply chain. The RAC has addressed published proposals through various NCBFAA comment papers, highlighting specific issues affecting you and our industry. Following are some of issues addressed this past year.

Comments to CPSC Proposed Rulemaking for Product Compliance Certificate - A formal NCBFAA RAC comment to the Consumer Products Safety Commission (CPSC) NPRM was prepared and filed with the assistance of Alan Klestadt. Our comments were directed toward areas which we felt would have a direct impact on the entry processing requirements for CPSC regulated products and possibly place additional regulatory responsibility on you as the filer of data.
       The proposed rule which defined the term "importer" included a customs broker acting as the importer of record. We pointed out a customs broker acting as a representative of a third party for entry purposes under CBP regulations would not have full knowledge regarding product safety requirements. We requested that that the rule be modified to eliminate any reference to "customs brokers." We referred the Commission to the definition under CBP regulations to help clarify the true importer and the party who should be responsible for furnishing the certificate of compliance. Our role in the supply chain was explained and that no additional responsibility (and liability) should be placed on a customs broker for issues they do not control. We requested the rule be modified to clarify the certification obligation belongs to the "beneficial party of interest" who has knowledge about the imported product.
       Our comments addressed the new physical certificate filing at the time of entry. Unless the Commission mandates that the certificate of compliance must be generated electronically in a uniform format (in fact the NPRM contemplates just the opposite), this requirement will impose a huge burden on the customs brokerage industry. This change in rules presents substantial programming challenges for both government and the private sector. We pointed out to the Commission that with the development of the International Trade Data System (ITDS) and CBP moving into ACE, entry procedural provision must be made for electronic transmission within the government systems or it must establish a separate web portal for the true importer to have the ability to directly file the certificate of compliance. Edits must also be incorporated into any electronic filing system to discern which products require certification at the time of entry. It is also unclear how CBP would enforce CPSC compliance without an edit system in place.
       We strongly stressed that the certificate of compliance should not be a requirement of entry as this will greatly impede the flow of goods into the country without yielding a corresponding compliance benefit for the Commission. We believe that the current standard of requiring the certificate of compliance be available at the time that the merchandise is presented to CBP for possible review is a workable solution.

NCBFAA comments on Title VII of the Food and Drug Administration Safety and Innovation Act (FDASIA) - The committee working with Jon Kent and Cindy Thomas filed the NCBFAA comments to the FDASIA regulations. While supporting FDA in their efforts to enhance the safety of the drug supply it was pointed out that the "importer" must be the true party with first-hand knowledge of the production and control of the products being imported. It was recommended that these regulations define the term "importer" consistent with the agency’s definition under the FSMA Foreign Supplier Verification Program.
       While recognizing FDA’s need for information to demonstrate compliance at time of entry, it must be consistent with effective electronic transmission, non-repetitive, and be compatible with the CBP ACE and ITDS protocols. We urged FDA to look for ways to streamline the entry requirements and require compliance documentation be available at the time of entry and furnished upon request, rather than being a condition of entry.
       Under the registration of foreign drug suppliers, the U.S. Agent responsibilities must be clearly defined and proper verification of acceptance be instituted. Some form of agent acceptance should be required before entry is accepted.

Comments to FDA Proposed Rule, Foreign Supplier Verification Program (FSVP) for Importer of Food for Human and Animals - The RAC responded to the published FSVP NPRM in areas which could affect our membership’s responsibilities related to the importation of food products. The committee wishes to acknowledge Ms. Thomas, Mr. Kent, and Mr. Klestadt for their assistance in preparation of these comments. It was felt that our comments should support the definition of the FDA importer put forward in the proposed rule. The definition proposed very closely aligns with the position of the NCBFAA that the FDA importer should be the party with a financial interest in the importation of the merchandise. That is the party who has the most knowledge of the actual merchandise and transaction information. It may not always be the CBP Importer of Record.
       The comments pointed out that the actual determination of the FDA importer may not always be clear. To avoid confusion and inaccurate designations, we suggested that there be an affirmative requirement for the Importer of Record to provide the name and Duns number, if required, of the FSVP importer on entry declaration.
       The proposed FSVP rule requires that the foreign owner or consignee designate a U.S Agent or representative as the FSVP importer when no U.S. owner or consignee is known at the time of importation. We pointed out our strong belief that the U.S. Agent under the Bioterrorism Act for Prior Notice purposes should not automatically be designated as the FSVP U.S. Agent. We suggested new procedures be implemented for designation and verification of the FSVP U.S. Agent, with ample time allowed for facilities and agents to develop agreements. Our comments went on to outline some of the flaws in the current food facility registration system. The issue of the current negative not positive acceptance procedure is not adequate for U.S. Agent acknowledgment of responsibility.
       The comments went on to point out some of the unique challenges facing the agency in implementing the FSVP. We pointed out the supply chain issue of comingled goods, like coffee from a multitude of growers. A verification program under the proposed rule would be very difficult and unrealistic without further clarification. This would even be more challenging when product is imported into the U.S. by a foreign importer for warehousing and future distribution. The U.S. Agent would not have the knowledge or capability to satisfy the FSVP requirements.

FDA Filer Review Guideline and Uniform Audit Procedures - On August 1, 2013, a select number of committee members, Mr. Jon Kent, and Mr. Klestadt had the opportunity to meet with the FDA Filer Review Work Group. The meeting was held at the FDA Jamaica, NY District office with FDA representatives from various FDA Districts. The meeting was very open and candid and an overview of the work group progress was presented by Mr. John Verbeten, FDA Director of Import Operations. The work group had addressed many of the issues presented by the RAC. The work group is well along the way in developing guidelines that are uniform and equitable for increasing the reliability of data being furnished while maintaining due process protocols. Here are some of the highlights of the presentation:

  • FDA will stress informed compliance in the review process.
  • Review a filer site every four years unless issues are found.
  • After the site review is completed the reviewer will go over the findings with management furnishing them a copy of the review document. Issues may be discussed that are elevated to an error status.
  • The FDA reviewer will not make the determination of compliance. The report will be reviewed by a supervisor and compliance officer to determine the actual error rate.
  • Error will be judged on a severity scale and its impact on FDA determination of acceptance. Errors will no longer be white or black.
  • The filer will have an opportunity to question, contest, and dispute the findings.
  • The agency will investigate developing a line system that will transit FDA errors or questionable transmissions back to the filer at the time of entry to help correct any future transmissions.
  • Entries will be reviewed at the transmission site not district specific. RLF entries will be reviewed at the site they were transmitted from, not at the processing port office. Larger firms that use one central transmission point will be reviewed at the transmission point regardless of origin.
  • FDA will publish a public Filer Review Guideline document along with a supplemental procedures and definitions addendum for field and trade use.

       Those attending the meeting were impressed with the work groups efforts and willingness to discuss issues. The RAC will be furnished an opportunity to review and comment on the final guideline documents before implementation. While not addressing all of our issues we hope the finished product will be something that is workable. We will reserve further comment until we have an opportunity to review the finished product.

RAC Participation in the Industrial Working Group - The RAC continues to participate in the Industrial Working Group (IWG) trade coalition interaction with FDA top management. Members of the RAC and Mr. Kent attended the IWG/FDA periodic meetings at FDA headquarters in White Oak, MD. To convey to top FDA manage the NCBFAA interest in further interaction, and to protect the interest of our membership, it was determined that a physical presence at this meeting was in our Association’s best interest. Following are the issues pursued by this stakeholder’s coalition:
       FDA conducted a centralized entry review pilot with the Express Courier industry. Both FDA and trade participants felt the pilot had mixed results. A lot of information was gained by the pilot but due to internal operational failures and the government shutdown the pilot was forced to terminate early. FDA stated they gained a vast amount of operational knowledge from the pilot which is still being analyzed. The IWG recommended conducting a second pilot with better preplanning meetings. FDA was non-committal on any future pilots.
       The IWG praised FDA on moving into a better risk based electronic PREDICT system. The IWG questioned FDA on why only a small number of the initial reviews are being electronically designated "may proceed" while the majority of reviews are being forwarded for human review. After human review only 3-5 percent are actually being referred for further FDA action. The IWG suggested FDA review the PREDICT rules to alter this ratio to reflect a truer risk potential. FDA implied that much of the blame for this action was attributed to "data quality" or inaccurate or incomplete transmitted data. FDA provided little specific information or examples on just what is meant by "data quality." It was agreed that a robust PREDICT electronic screening system is a benefit to all parties in light of increased volume with reduced resources. There was recognition that implementing an effective PREDICT system is a "shared responsibility."
       The IWG recommended FDA develop a more robust ITACS system for better communication between all parties. FDA is in the process of developing an account management security system which will permit ITACS to move forward.
       The IWG recommended a formal advisory body similar to the CBP COAC. A formal advisory group would be better able to assist FDA with future goals integration into CBP ACE. FDA promised to look at whether the IWG could be organized under FDCA as feasible.
       I would like to express my appreciation to the RAC members for their work and commitment to addressing PGA issues that would affect our member’s daily operations, responsibilities, liabilities and those of our clients. I would recommend you look at the roster of RAC members posted on the NCBFAA website and when appropriate express your own appreciation. I would like to express the RAC appreciation to Ms. Thomas, Mr. Kent, and Mr. Klestadt for their continued support and assistance in addressing the many challenges facing the NCBFAA this past year. The RAC, along with the other NCBFAA committees, continues to bring our industry’s issues to the forefront with government agencies, not only questioning proposals but also presenting viable solutions, which benefit all parties. Your Association remains the one to come to when addressing supply chain issues.
       The RAC is still challenged with developing a dialog with other regulatory agencies beyond FDA and CPSC. This will need to be the committee’s primary goal as we move into 2014 and a new Association management. The committee will continue to pursue our efforts with FDA to implement an "Advisory Ruling Procedure" and workable and fair national filer review protocol.
       More government agencies are looking at you as a broker or forwarder for increased responsibilities and enforcement action. Your Association needs to know your concerns, suggestions and direction. The committee again asks for NCBFAA Board, APN, and membership participation by furnishing the committee PGA systemic issues and your feelings on the many government PGA proposals.


NEI Annual Report
By Kenneth Bargteil
       The NCBFAA Educational Institute (NEI) remains dedicated to advancing the education of global trade professionals while setting the gold standard for continuing education in the international trade industry.
       In the second year of the Five-Year Plan endorsed by the Officers and Board of Directors on June 23, 2013 work began on the creation of the Master Customs Specialist (MCS), a second tier certification program, the Certified Drawback Specialist (CDS) and re-creation of the Certified Export Specialist (CES) as an NEI-owned curriculum. Work reached culmination in the Content Sub-Committee on the NEI Styles and Standards Reference Guide (Style Bible) and in the Administration/I.T. Sub-Committee on selection of the Learning Management System (LMS). A recommendation for acquisition of an LMS was submitted to the Officers Committee on January 6, 2014 and remanded to the Administration/I.T. Sub-Committee for reconsideration in terms of a longer perspective. Other highlights for 2013 included enlarging the NEI resource pool for curriculum and deliverables to include: Braumiller Law Group, Sandler Travis & Rosenberg, P.A., Miller & Company, P.C., Mitchell Silberberg & Knupp LLP, Becker & Polikoff, Global Trade Academy, STC International, and Export Compliance Solutions.
       One of the most notable NEI achievements in 2013 was expansion of its communications channels coupled with a polished and aesthetic image in keeping with the professional character befitting an institute of higher learning and as set forth in the NEI Style Bible. Among the vehicles developed or enhanced during 2013 were the Quarterly Program of Webinars, On-line Courses and Accredited Learning Events, the monthly Newsletter, Newsflashes and a growing presence in social media through LinkedIn, Facebook, and Twitter.
       In 2013, as some of the key leadership positions within the NEI Sub-Committees changed hands, the NEI lost no momentum and could be seen to make strides towards its goal, pass some milestones and close on others. Its form and character are taking on the aspect and becoming better defined as the Educational Institute envisioned at the beginning of its current mission. There remains much more to be done, and the need for subject matter experts and leaders in the fields of logistics and supply chain management not currently under development as certification programs is pressing, but there is reason to be hopeful that these elements will fall into place as momentum in our enterprise continues to build.
  • Steering Sub-Committee, with its Chairman Bob Perkins and Vice Chair Brian Barber marked the course toward accreditation.
  • Content Sub-Committee directed by Chairwoman Kristi App developed standards and styles and began work on the NEI Library for the courses, curricula and reference materials from which the NEI deliverables will be made available.
  • Administration/I.T. Sub-Committee guided by Steve Powell after careful study and review delivered its recommendation the automated system to house our content and administer a distance learning program.
  • CES Sub-Committee led by Chairwoman Michele Pluta reassessed the requirements of trade professionals, tailored the CES to better meet those needs and began creation of the curriculum, including contracted work with a recognized trade expert.
  • CCS Sub-Committee and its newly installed Chairwoman Karen Damon refreshed and enhanced the CCS program while moving ahead with creation of a second tier certification for masters of customs compliance (MCS).
  • Marketing Sub-Committee headed by its new Chairwoman Katrina Dill, commenced better aligning the NEI with its expanded market and outreach through social media and targeted communication tools.
  • Policy Sub-Committee presided over by the NEI Chairman continued its examination of policies with the purpose of better responding to member and market expectations and opportunities.

       The workgroups, organized to undertake mission critical tasks for each Sub-Committee, were expanded and made great progress in 2013. The Administration/I.T.’s LMS Selection Work Group, charged with researching, reviewing and selecting a software product that would support the NEI’s five-year mission plan, completed that task. The Sub-Committee took a methodical, objective approach to ensure all products were fully investigated.
       In the CCS Sub-Committee, the newest workgroup is the Certified Drawback Specialist (CDS) headed by Anne-Marie Bush. The purpose of the Certified Drawback Specialist is to create a program for individuals to specialize in Drawback Entries and Compliance. Employers and customers will know that an individual with the CDS certification can prepare all applications and documentation for a valid drawback entry, and assist in any post entry review by CBP. Anne-Marie reports "Our ultimate goal is to have the basic certificate and grandfathering ready for Certified Drawback Specialist by Jan. 1, 2015. Some continuing education content will also be completed by Jan 1, 2015, but the CDS Work Group will focus on getting the basic course work done first since the continuing education materials won’t be needed until after people are grandfathered in or complete the CDS course." The methodology for creating this curriculum will include integrating relevant sections from other NEI curricula into the CDS program since drawback specialists must be educated about basic importing and exporting.
       Nancy Dempsey assumed the Chair of the Master’s Customs Specialist (MCS) Work Group. As Chair she grew the Work Group committee to a roster of 20 volunteers. They are began work on the creation of a draft outline for admission & credential granting criteria, and completed the task of creating the course outline. The Work Group selected four topics of the working curriculum for its initial focus and development. Each topic has an assigned content lead. Leads were working on identifying underlying subject matters at the close of 2013. These include Valuation, Classification, Admissibility and Business Practice.
       Shannon Whitt, Chairwoman of the Content Review Work Group (CRWG) reports that all of parts 1 & 2 of the CCS course materials have been submitted to the NEI Content Committee for review, and only one module (Part 2, Module 9) is pending NEI Content Committee approval. Modules 11 – 15 of Part 3 have been sent to NEI Content Committee for their review and to the CCS Test Question Work Group (TQWG) to cross-reference test and quiz questions to the material. It is planned that Modules 16 – 17 of Part 3 will be submitted by February 15th and Part 4 will be completed and sent to NEI Content Committee by mid-March, 2014. The CCS CRWG Chairwoman reports that the Work Group has a solid roster of participating volunteers and is well equipped to complete tasks in a timely manner. Once the course is underway, this Work Group will be available for drafting new material as necessary. Plans are already in place to continuously review CCS course material to be sure it is current.
       As Elizabeth Maxwell stepped down as Chairwoman of the CCS Test Questions Work Group, Donna Clemmensen stepped up to take the lead. Karen Damon, who leads the CCS Sub-Committee also heads of her Sub-Committee’s Case Study Work Group (CSWG).
       In the CES Sub-Committee Michele Pluta took over from Jan Fields as Chairwoman. The CES Sub-Committee swam against the tide for much of 2013, trying to create curriculum for an NEI-owned certification course. To paraphrase the Chairwoman, "As last year was challenging and obviously short on volunteers, we hope that this year with the installation of an LMS, we can assign course content requirements to volunteers with the expectation of much improved productivity. The aim is for volunteers to create content and inhabit the LMS in course of study format. It is the intention to create an experience embedded with knowledge as most adults are too busy to work through a curriculum without a practical application of the effort as an immediate outcome.
       "Further, it is the intention of the CES Sub-Committee to devise five-week courses for a basic CES certification and an advanced CES Certification (Master Level) down the road. It is our belief that the basic CES courses broken down into five-week modules will make the curriculum manageable and fun. Each course will introduce the information to be learned using real-life scenarios, "quizzes" (non-graded), and an end of course test for each five-week module. We hope to employ some graphics and possibly video to enhance the learning experience.
"In 2014 the CES Sub-Committee will partner with the CCS Sub-Committee to be sure that we are cross-fertilizing ideas and creativity. It is our intention to meet the annual quota of case studies necessary to maintain a successful CES Program by September 2014."
       Within the Content Sub-Committee the Style Bible Work group submitted its Styles & Standards Reference Guide, a Style Bible that contains all of the style and standards for creating and publishing NEI content. Michele Pluta spearheaded this effort, and the final style bible will be available for reference on the NEI website in 2014. During 2013 the Content Sub-Committee reviewed and approved Parts 1 and 2 (one module is still needed) of the revised CCS material generated by the CCS Content Review Work Group (CRWG) as well as 13 case studies: 4 from the CES Sub-Committee and 9 from the CCS Sub-Committee. The Chairwoman anticipates working closely with the CCS Test Question Work Group (TQWG) in 2014. The heads of the CCS Sub-Committee, CRWG, TQWG, and Content Sub-Committee hold monthly conference calls to make sure that work stays on track and on time. In 2014 the Content Sub-Committee will focus on acquiring scholarly essays and public domain content for the NEI library and the creation and maintenance of the NEI wiki in addition to the review and approval of program Content and case studies.
       The Marketing Sub-Committee continued to build partnerships and expand touch points. After a meeting with Army Officials at Ft. Lee, the NEI enrolled four soldiers into the CES course. These individuals are currently auditing the course with the purpose of determining its suitability as an adjunct educational program to help prepare military personnel for careers as civilians. NEI Committee Member Pam Brown is assisting as a liaison and offering guidance as the students navigate the course. She will also be assisting in the effort to get the CES course reimbursable through GI Bill funds. The ultimate goal is to partner with the Army by having our course tuition and fees reimbursable to prospective students, as well as listed on their website of classes.
       On December 11, 2013, Kiko Zuniga, Ken Bargteil and NEI staff met with Amanda Barlow, Director, Marketing, Carnet and Trade Services Department, United States Council for International Business (USCIB) and reached agreement for an alliance. It was decided that the NEI would select titles from their bookstore that would be valuable to our members, and place them in our Marketplace for purchase. The NEI will receive and process the order, and USCIB will fulfill it. The NEI will earn a small commission from each sale. Titles will be available in our Marketplace just as soon as the contract is signed. It was further agreed that the USCIB would participate in the NEI quarterly webinar program and contribute content to the NEI library to supplement current and prospective curriculum.
       In addition to the legacy deliverables, in 2013 the NEI augmented its educational marquee. We began publishing a quarterly program which outlines all of the educational opportunities approved for CCS and CES credit. While the program continues to feature those webinars presented by the NEI, it also includes an expansive variety of events submitted to the NEI by third parties for evaluation and award of continuing education units. All registration information, including pricing, is available on the NEI webpage. The use of social media has also proven to be a valuable tool. In addition to Facebook (167 likes), Twitter (208 followers), and LinkedIn (280 connections), the NEI established a Director’s Blog in the last quarter of the year. In a short period of time it has received 700 views and 16 subscriptions. The NEI hopes to extend its reach in 2014.
       With rededication to the immediate goal of providing quality training and educational opportunities for global logistics professionals, as clearly indicated above, our long-term goal is to become an accredited institution. Within five years, under the direction of the Chairman and with the hard work of the Sub-Committees, Workgroups, the NEI Executive Director, Director and staff, volunteers and participants, we hope to become a degree conferring institution of higher learning. Please join us on our journey, whether it is through volunteering your time and expertise, or by taking one of our courses or webinars, step up to the NEI.


Affiliated Presidents Network (APN) Report
By Scott Larson
       As reflected in its charter, the Affiliate Presidents Network (APN) Committee facilitates information sharing, lines of communication and identification of common issues among the local Affiliated Associations and the NCBFAA. It accomplishes this through monthly teleconference calls as well as meetings during the NCBFAA’s premier Conference events, its Annual Conference in the spring and its Government Affairs Conference every fall.
       One of its most recent successes has been the compilation of a host of association management resources that are available to all of the APN members on the NCBFAA Website. The material covers a wide range of pertinent topics including, by-laws, budget preparation, treasury operations, insurance needs, committee management, meeting scheduling, educational programs, communication tools, human resources, legal issues, association management, marketing initiatives, and member relations.
       To insure that access to this valuable resource is limited to APN Committee members, the information resides on a secure area within the NCBFAA web site and login credentials for that site are only available to local Affiliated Association Presidents who are active APN Committee members.
       The purpose of this exercise is to supply local associations with an electronic depository of association management guidelines that will aid them in their day-to-day activities. The development of this secure portal also ensures that as local association management changes hands, new incoming Presidents will have access to the valuable information that has already been compiled as well as all the new and updated information that will be added in the future.
       The APN currently includes 28 local Broker and Forwarder associations.
  • Atlanta International Forwarders and Brokers Association
  • Baltimore Custom Broker & Forwarders Association
  • Boston Custom Brokers & Freight Forwarders Association
  • Brownsville Licensed Customs Brokers Association
  • Customs Brokers & International Freight Forwarders Association of Washington State
  • Chicago Customs Brokers and Forwarders Association
  • Colorado Customs Brokers Association
  • Columbia River Customs Brokers and Forwarders Association
  • Customs Brokers & Forwarders Association of Northern California
  • Customs Brokers & Freight Forwarders Association of Charleston, S.C. Inc.
  • Customs Brokers/International Freight Forwarders Association of Virginia
  • Detroit Customs Brokers & Forwarders Association
  • Florida Customs Brokers & Forwarders Association, Inc.
  • Houston Customhouse Brokers & Freight Forwarders Association
  • Independent Freight Forwarders and Customs Brokers Association of Savannah
  • International Freight Forwarders & Custom Brokers Association of New Orleans
  • International Freight Forwarders/Customs Brokers Association of Charlotte
  • JFK Airport Customs Brokers and Forwarders Association
  • Laredo Licensed U.S. Customs Brokers Association, Inc.
  • Los Angeles Custom Brokers & Freight Forwarders Association
  • New York/New Jersey Foreign Freight Forwarders & Brokers Association, Inc.
  • Nogales U.S. Customs Brokers Association, Inc.
  • North Texas Customs Brokers and Freight Forwarders Association
  • Northern Border Customs Brokers Association, Inc.
  • Philadelphia Customs Brokers Association
  • San Diego Customs Brokers Association
  • Washington Customs Brokers and Freight Forwarders Association
  • West Texas/New Mexico Customs Brokers Association

Nominating Committee Report
By F.C. "Pancho" Averill
       This year the Nominating Committee put forth the following slate of officers for election at the 2014 NCBFAA Annual Meeting during the 2014 NCBFAA Annual Conference in Summerlin, NV.

  • President Geoffrey C. Powell, COF, C. H. Powell Co.
  • Vice President Amy Magnus, A.N. Deringer, Inc.
  • Secretary William S. App, J. W. Allen & Co., Inc.
  • Treasurer Scott Larson, MOL Logistics (USA) Inc.

Nominating Committee

Membership Committee Report
By Bruce Goodwin
       Another successful year has passed and our membership ranks continue to grow, but the striving for additional membership never ends. More and more each year we spend a significant amount of time and effort attending to membership growth and retention. In 2013, we added 92 new members (63 Regular Members, 30 Affiliate Members, and 9 Associate Members). Retention of members is a challenge with mergers, buyouts and unfortunately, companies going out of business because of the economy. In my 10 years as membership chairman, our membership has risen from 726 to 896. Not bad but we still strive every day to have that number pass 1,000.
       More members ensure that our Association has the "cream of the crop" to choose from for our Executive Committee, Board of Directors, Committee Chairs and, most importantly, committee members. More members mean more membership dollars, which are needed to run our Association successfully. More members give us a stronger hand in negotiations with CBP and get us an "invitation to the table" when important changes to CBP and to legislation in Congress come up that affects our livelihood.
       Your most important question is "Why should I join the NCBFAA?" The NCBFAA is voice of our industry and with membership; your company will be granted exclusive opportunities you need to grow your business. When the NCBFAA speaks, CBP and Congress listen to what we have to say. Have exclusive access to a network of unbelievably talented professionals in our industry. The NCBFAA Educational Institute (NEI) offers industry professionals an unbelievable source to further their knowledge on the brokerage (CCS) and exports (CES) sides of our business. Also, if and when CBP mandates that licensed brokers need so many hours of "further education" to keep their license, the NEI is right there to help our members with that particular requirement. With membership comes the impact of the NCBFAA name and recognition. When companies see our logo on your letterhead or in your sales literature, importers will take notice.
       We appreciate any and all constructive comments that will make our Association better. Please stay involved if you already are and if not, get involved. To all members, if you bring in just one new member next year, our membership count will surpass the elusive 1,000-member mark.

Large Broker & Forwarder Sub-Committee Report
By Joe Trulik, Chair
       The Large Broker & Forwarder Sub-Committee (LB&F) focuses on the impact of Customs and Border Protection (CBP), Federal Maritime Commission (FMC) and other government agency directives, actions and initiatives on large member corporations. As a Sub-Committee of the Customs Committee, LB&F is charged with the identification of issues, the sharing of member perspectives and proposed solutions, and then elevating the information and comments to the Customs Committee.
       In 2013, the LB&F convened via conference call on a bi-monthly basis. The main topics discussed were: 19 CFR part 111 Rewrite and associated topics, the rollout and broader implementation of the Centers of Excellence and Expertise, ACE development including the PGA Pilot, and the Broker Pre-Certification Program for ISA.
LB&F members met in face-to-face meetings to discuss the 19 CFR Part 111 Rewrite with Customs Committee representatives and CBP officials.
       The LB&F initiated the process of writing a white paper on the implementation and operational concerns with the CBP Centers of Excellence and Expertise (CEE). As the implementation of CEEs represent a major change in the way a Broker operates and engages with the stakeholder, extensive and collaborative communication continues.
Issues escalated to the Customs Committee include:
       In ACE, CBP is communicating directly to the ACE Trade Account Owner, as opposed to the Port office represented by the entry in question.
       ACE broker employee reporting, issues with personal broker employee information being available on the ACE portal.
       Questions for CBP regarding PGA messaging and the release process for PGA entries.
       The LB&F will meet via conference call throughout 2014, and will evaluate opportunities for in person meetings at NCBFAA Conferences.

NATIONAL CUSTOMS BROKERS & FORWARDERS ASSOCIATION OF AMERICA, INC. Copyright © 2021 All Rights Reserved.   Powered by MemberMax