To amend section 641 of the Tariff Act of 1930, and for other purposes. Summary of the Provision H.R. 5418, if enacted, would revise the law regulating Customs brokers. Section-by-Section Analysis This bill, which is entitled "The Customs Brokers Act of 1984", makes comprehensive changes to section 641 of the Tariff Act of 1930 relating to customs brokers. Section 2 for the first time defines the term "customs business" and restricts the scope of Customs' review of customs brokers to such customs business. It also specifies that only licensed brokers may conduct customs business for third parties; sets forth licensing and permit procedures; establishes a duty for customs brokers to exercise responsibility and control over its customs business; provides for disciplinary proceedings, including monetary penalties and revocation or suspension of licenses or permits under prescribed procedures. Procedures are also provided for judicial appeal of administrative action. Brokers licenses are subject to suspension and revocation if the required trienniel reports are not timely filed with the Secretary of the Treasury and the Secretary is given the authority to assess reasonable fees and charges to defray, or an aggregated basis, the costs of carrying out the provisions herein. Section 3 through 9 makes conforming changes to other provisions of law to clearly establish that the Court of International Trade has exclusive jurisdiction over decisions of the Secretary of the Treasury pursuant to section 641, as amended by this legislation. Section 10 amends section 520 (a) of the Tariff Act to authorize Customs to issue refunds prior to liquidation in the case of clerical error. Finally, section 11 provides for the legislation to be effective 180 days after enactment and set forth transitional rules. H.R. 5418 Background and Justification Basically, the bill maintains the system of licensing brokers, but gives Customs the opportunity to more closely examine the qualifications of potential brokers, and to apply penalties more effectively when brokers have violated the terms of their licenses. The bill restricts the scope of Customs jurisdiction over brokers to "customs business" as defined in section 2 (a) (2). The majority of the bill relates to changes which will make it easier for Customs to penalize those who violate either a broker or permit license. Comparison to Present Law The bill permits a license to be granted to any corporation, association, or partnership if one officer or partner is a broker, rather than two specified in current law. For the first time, the bill provides for the assessment of a monetary penalty, up to $30,000, for violations, in lieu of suspension or revocation of licenses. Monetary penalty cannot be assessed for non-Customs crimes such as larceny or extortion. The bill classifies what actions by brokers can constitute a penalty, revocation or suspension. Current law requires brokers to notify Customs each 3 years as to whether they are still in business. With this bill, if these reports are not filed, individual broker's licenses may be suspended until filed or revoked. The bill authorizes Customs to charge fees to brokers for carrying out sections of the bill. The amendments made by this bill shall take effect upon the close of the 180th day following the date of enactment. Effect on Revenue The effect on revenue from enactment of this legislation cannot be determined. Subcommittee Action Agency Reports The U.S. Customs Service has no objection to enactment of H.R. 5418 provided that the few areas of disagreement between the Customs Service and the National Brokers Association are resolved. The International Trade Commission submitted an informative report. H.R. 5418 Markup On June 27, 1984, the Subcommittee on Trade ordered H.R. 5418 favorably reported to the full Committee on Ways and Means by voice vote, with several amendments. A new subparagraph (F) was added to section 641 (d) (1) allowing for the Secretary to take disciplinary action against a broker if he has, in the course of his customs business, knowingly deceived, misled, or threatened any current or prospective client. Paragraph (d) (2) was amended to provide that the Secretary's decision with regard to monetary penalties must be "based solely on the record." Paragraph (c) (2) was clarified to indicate that the court can consider the Secretary's decisions regarding "the introduction of evidence or testimony" as well as his first decision so long as the objection was raised before the hearing officer. A minor amendment was made to paragraph (f) so that brokers would be required to provide information relating to their customs business only to employees or officers of the U.S. Customs Service. Paragraph (h) was amended to protect brokers against Customs' assessment of separate fees to defray the costs of an individual audit or individual disciplinary proceedings. Finally, section 9 was amended to clarify the liens which are covered and section 10 was amended to provide that Customs referral of excess duties prior to liquidation shall be limited to cases involving clerical error. SUMMARY OF TESTIMONY ON H.R. 5418 Administration The United States Customs: No objection to enactment of H.R. 5418 provided that areas of disagreement between the Customs Service and the National Brokers Association are worked out. Customs Service would like to see alternative language relating to disciplinary proceedings, a custom officer instead of an ALJ as the hearing examiner, deletion of section 10 that would allow for refunds prior to liquidation and a clearer meaning in section 9 as to the type and nature of liens which brokers might possess under the statutes or common law of the various states. National Customs Brokers & Forwarders Association of America, Inc.: H.R. 5418 would: (1) modernize and revise the customs regulating system, (2) give brokers one nationwide license, (3) give the Secretary of Treasury additional flexibility to discipline brokers, (4) allow hearings before an ALJ, (5) define "custom business" for regulatory responsibility and, finally, procedures for judicial review should be revised to conform with the changes to Section 641. J.F.K. Airport Customs Brokers Association: The Association supports the general objectives of H.R. 5418 with few suggestions that would make the bill more closely reflect the intentions of the framers and may alleviate possible conflicts with other existing laws. Suggest it be made clear that suspension or revocation are appropriate penalties only for certain enumerated types or classes of violations and only for serious violations. Suggests correction by appropriate language of possible problems with intention to have objections to testimony and evidence raised before the hearing officer. The suspension and revocation of a brokers license for not filing a timely notice is unnecessarily harsh. Also suggests changes regarding customs brokers book and record keeping and National Customs Brokers license requirements. H.R. 5429 Introduced by: Mr. McNulty Date: April 11, 1984 To provide for the duty-free entry of articles required for the installation and operation of a telescope in Arizona. Summary of the Provision H.R. 5429, if enacted, would provide for the duty-free entry into the United States of instruments and apparatus required for the installation and operation of a sub-mm telescope in Arizona. Section-by-Section Analysis H.R. 5429, if enacted, would provide for the duty-free entry into the United States of articles required for the installation and operation of a sub-mm telescope in Arizona which is the subject of a joint astronomical project undertaken by the Steward Observatory of the University of Arizona and the Max Planck Institute. The proposed bill provides that the Secretary of the Treasury be authorized and directed to admit free of duty instruments and apparatus (within the meaning of headnote 6 to part 4 of the schedule 8 of the Tariff Schedule of the United States (19 U.S.C. 1202)) for use in the installation or operation of a sub-mm telescope. Background and Justification The intent of this legislation is to facilitate scientific cooperation between the Steward Observatory of the University of Arizona located in Tucson, and the Max Planck Institute for Radioastronomy in Bonn, West Germany, by allowing duty-free treatment of items imported into the United States for the installation and operation of a jointly owned sub-mm telescope (SMT). The SMT is to be constructed in Southern Arizona on a site provided by the University of Arizona. The estimated $4 million cost of the project is to be shared by the two institutions. In 1982, the University of Arizona signed a Memorandum of Understanding with Max Planck Institute for Radioastronomy in Bonn, West Germany, which provided for the building of a new $4 million SMT in southern Arizona on a site provided by the University of Arizona. The SMT is the first telescope in the world to work at a radio wavelength frequency of 1.3 millimeter, at which frequency radiation from astronomical objects can still penetrate the earth's atmosphere. This wavelength range, which is still largely unexplored, appears to hold the key to understanding the intersteller medium and the process of star formation. The telescope design reportedly incorporates many state-ofthe-art technological features. The reflector and backup structure |