On December 19th, 2023, US Customs and Border Protection (CBP) issued ruling HQ H326926. A US Customs Broker inquired in the ruling as to whether an unlicensed offshore third party could be granted access to its ABI system to prepare customs entry data using shipment documents and other referenced information. In this proposed process flow, the US Customs Broker would review, analyze, and correct any errors or omissions in the prepared data before submitting a completed 7501 entry into the United States.

CBP's findings confirmed that the keying of entry data into the ABI system by an unlicensed third party did not conform to multiple regulatory requirements for brokers, including:

• 19 CFR 111.1 - Definition of Customs Business – Customs business is defined as: "preparation of documents or forms in any format and the electronic transmission of documents, invoices, bills, or parts thereof intended to be filed with [CBP] . . . whether or not signed or filed by the preparer." CBP held that electronic data creation within the ABI system is defined as customs business and must be completed by a licensed provider.
• 19 CFR 143.1(a) – ABI Eligibility – only customs brokers, importers, or ABI service bureaus may be granted access to an ABI account.
• 19 CFR 111.24 – Records Confidential – customs brokers have an obligation to keep their clients' records confidential, and allowing unlicensed third-party access to these documents breaches this requirement.
• 19 CFR 111.3(a) – Customs Business – Customs business may only be transacted in the customs territory of the United States, which includes the States, District of Columbia, and Puerto Rico.

Following this ruling, US importers would be wise to review this ruling with their customs broker to confirm that requirements are being met.

In addition, CBP and the US Court of International Trade (CIT) have long held that the definition of transacting customs business can be read and interpreted very broadly and can have broad-reaching implications on the preparation of data to complete a customs entry – this can include third-party guidance on HTS Classification. More on this can be found in our blog: Suppliers Providing HTS Advice IS Transacting Customs Business (tradewin.net).

If you have any questions on this ruling or your trade compliance operation, please don't hesitate to reach out to Tradewin. Thank you.