NCBFAA Board of Directors Meeting
June 25, 2005 Chicago, IL
Minutes
Those in attendance included: President Federico "Kiko" Zuniga; Vice President Mary Jo Muoio; Secretary John Hyatt; Treasurer Jeff Coppersmith; Chairman of the Board Peter H. Powell, Sr.; Executive Vice President barbara reilly; Area 1 Rep(s): Mark Johnson; Amy Magnus; Area 2 Rep(s): Cary Weinberg; Gary Klestadt; Area 3 Rep(s): Kenneth Bargteil, Joe Meunier; Area 4 Rep: John Abisch, Jan Fields; Area 5 Rep(s): Scott Case, Joe Trulik; Area 6 Rep: Bob Coleman; Area 7 Rep(s): Billy App;Area 8 Rep(s): Arturo Dominquez; Neto Roser; Area 9 Rep(s): Roger Clarke; Karen West, Senior Counsel: Harold Brauner, Mike Dugan, Paul Wegener; General Counsel Harvey A. Isaacs; Transportation Counsel, Edward Greenberg.
Area Representatives not present: Area 1: Mark Johnson, Area 6: Jeanne Burns, Area 7: Shane Garcia.
Invited Guests: Hermann V. Amst, Marie Armelagos, Kristi App, Kellie Case, Maurine Cecil, William Evans, Bruce Goodwin, Tom James, Scott Larson, Robert Perkins, Norman Schenk, Gary Synder, Meredith Synder.
Welcome: President Kiko Zuniga welcomed everyone to the NCBFAA Board meeting and thanked the Customs Brokers & Foreign Freight Forwarders Association of Chicago for the very enjoyable reception they held the previous night and asked everyone to introduce himself or herself.
Minutes: Area 9 Representative Roger Clarke’s motion to approve the minutes was seconded by Area 2 Representative Gary Klestadt, passed unanimously following NCBFAA Secretary John Hyatt pointing out grammatical errors.
Treasurer’s Report:Treasurer Jeff Coppersmith was proud to report that the Association is in a better financial position than it has been in years. Several factors played a role in this success. The strong NCBFAA Annual Conference, good sponsorship and the execution of well managed contracts with Conference venue contributed significantly to our Association financial well-being. In addition, every department and group is within budget or close to it. At our meeting in Phoenix, we authorized $50,000 for CCS and, to date, the program has generated $57,000. On top of that our current P&L is very strong, showing $353,000 of net income. However, there are several issues being addressed with regard to the office accounting department that do not affect the reports to the Board. In conclusion, President Zuniga thanked the sponsor chair, Chairman Peter Powell, and all the others for their hard work at making the NCBFAA Annual Conference the success that it was.
Membership Committee: Membership Committee ChairmanBruce Goodwin requested approval of the following 14 new members:
A&A Contract Customs Brokers USA, Inc.Coudert Brothers
Gardner Carton & Douglas LLP
Ibercondor S.A.
International Wood Products Association
Jenkens & Gilchrist, P.C.
RGA Logistics / Ricardo Gonzalez Customs Broker
Saving Shipping & Forwarding USA Inc.
Serra International, Inc.
Sung Wook Lee
United American Line
Walker International Transportation, Inc.
Worldwide Express, Inc.
A motion to approve these new members was seconded by Area 5 Representative Scott Case, with a second by Area 7 Representative William App. Before it was approved, however, discussion ensued about recurring concerns that the affiliate members may not be reporting their full complement of employees, which would have the effect of reducing the amount of dues they have to pay. For example, legal firms may have hundreds of lawyers, but only a handful in the practice engage in customs law. A suggestion to compare a firm’s list with those admitted to the customs bar was made. The issue was put to the Membership Committee to develop a recommendation for addressing it.
The problem of applying Regular members underreporting the number of employees came up and was discussed. In closing, Chairman Goodwin reiterated his earlier call to action for each Board member to attempt to bring in, at least, one new member.
Affiliate President Network (APN): President Zuniga announced the move of Geoff Powell to the Freight Forwarding Committee and the appointment of Robert Kenneally to the chairmanship of the APN. Co-chair John Hyatt reported on the APN activity to date noting that they had a June 21 conference call during which the participants reasserted the APN mission. He also noted that the full minutes of the call are available on the APN forum at the NCBFAA Website. He said Mr. Kenneally Indicated the intention to speak with each of the APN members and, based on their input, will draw up an APN action plan for future implementation.
CBFFFAC President Scott Larson welcomed everyone to the Windy City and then provided background on the local association noting that it consists of four officers, six voting and eight non-voting directors, and 12 active committees as well as a currently vacant chairman of the board position. They try to meet monthly. Membership consists of 180 firms but due to consolidation there is a slight decline in membership. As to communication, they distribute a monthly newsletter and conduct educational seminars as well as local hot topic seminars. Also try to co-sponsor NEI seminars. Hope to convene another transportation night this fall when people come and talk about their concerns and we present ours. They are involved in an "Adopt-a-show" program in connection with the Department of Commerce pavilion program. Suggested interested persons should visit the Association’s Website In conclusion, he invited everyone to join them for the evening boat cruise.
InternationalFederationofCustomsBrokersAssociations (IFCBA): Vice President Mary Jo Muoio briefed the Board on the IFCBA annual board meeting operating in conjunction with WCO meeting. She noted that of the five continents represented, the common denominator among the brokers was that "The sky was falling." They all felt that their businesses were in peril and the blame for it was on the United States. They felt that the US security measures and rules were jeopardizing how they conduct business, and/or opening the brokerage business up to other non-brokers.
The IFCBA met in conjunction with the WCO meeting to adopt the framework of standards. During a well-attended reception on Tuesday evening, many Customs Commissioners, including Commissioner Bonner, and their staffs engaged in one-on-one discussions. Discussions with Commissioner Bonner indicated that the WCO’s high-level strategic group would continue and that the US would have a seat. He also suggested that it was an important group in which the IFCBA should have a consulting role, thus providing a vehicle for having broker issues addressed.
International Federation of Freight Forwarders Associations (FIATA) made a presentation and talked of moving forward on a partnership with IFCBA with an announcement set for their September meeting in Moscow. Although the agreement will not be a merger of the two organizations, it will commit each to work with the other in areas where they agree with the approach. She noted a recent IFCBA survey of brokers seeking information on what might be growth-oriented services that customs brokers can offer. Response rate low but some interesting results concerning large versus small brokers. Final results will be available later in the year.
The North American Customs Brokers Alliance (NACBA) was discussed and the Canadian Commissioner expressed an interest in meeting with the group, and offered to help get the active involvement of the other commissioners into meeting. She concluded by pointing out that the IFCBA conference being held in Beijing May 13, 2006 is themed, "Strategic Connections for Secure Borders."
Communications Report: President Zuniga noted that the website hits are up and that many of the new members learned about our organization through the Website. To improve the Website, the ResultsDirect platform for the Certified Customs Specialist (CCS) certification will also serve for registering attendees at our functions as well as enabling CCS holders to monitor their continuing education credits. Recommendation was entertained to develop a hot topics segment on the Website.
NCBFAA Educational Institute: Area 4 Representative Jan Fields highlighted the NEI’s focus on developing an overall program of deliverables including not just the CCS but a Certified Transportation Specialist (CTS) program, continuing education modules, and generic Intro to Brokerage focused on all kinds of staff members. Right now NEI is focused on the CCS program, which currently includes nearly 600 licensed individuals who have been grandfathered. Beginning in November candidates can begin taking the CCS course $600 for members ($1200 for all others). Those eligible to grandfather into the program simply pay a fee of $106 (or $95 by check) and they will be CCS certified through the end of 2006. Starting in year 2007, all grandfathered and course qualified CCS holders must renew annually as well as earn continuing education points available through a variety of venues. Co-Chair Armelagos reported on the Third Thursday seminar, which included hundreds of attendees throughout the country, and was very well received and evaluated.
2006 Annual Conference: Conference Chair Robert Perkins reported that the Conference in 2006 is in Hollywood, FL at the Westin Diplomat. The theme is "A Commitment to Excellence: Certifying our Future." The intent is to play into the work of the NEI as well as support and launch many of the new programs mentioned in the briefing. Again this year the Sponsorship Chair is Peter Powell. Discussion followed pertaining to sponsorship, golf, exhibits and other related issues. President Zuniga noted that the 2005 Conference exceeded expectations by about $60,000 and he expressed sincere appreciation for everyone’s efforts at making it so successful, especially Mr. Powell and Mr. Coppersmith.
Customs Committee: Chairman Ken Bargteil referred the Board to a written report submitted earlier this week on the May 27 Customs Committee meeting in New York City and invited anyone with questions or comments, to see him. He then proceeded to bring the Board up to date on the meeting held earlier in the day. Initial topic addressed was issues relating to Customs bonds. Asked committee for update on bond centralization and was advised that it’s in the process of relocating starting July 4 and for 15 days starting on June 29; they’ve asked that we try to restrain filing of bonds so that a backlog is not created. Not sure about advisability of that, since I think our members need to be cognizant of their responsibilities as agents of importers.
We also considered an initiative from sureties to reinstitute a separate bond for antidumping and countervailing duty because Customs has no means to keep track of liability incurred for SEB’s that are being written for anti-dumping. This, in turn, presents a problem for sureties because they can’t control amount of liability accruing to them since they have no way of knowing the extent of the risk. At first, Customs said it was a business problem for the sureties, but when reminded of the Byrd Amendment, which has created a special interest looking for reimbursement, and that, a surety bankruptcy could result from presentation of a $300 million anti-dumping duties bill. As a result, Customs would have to go to the Hill to get money from the government to distribute the monies generated by the anti-dumping duties claim to the "aggrieved" parties. This presents Customs with a big problem. The Customs Committee decided not to object to reinstitution of the anti-dumping duties bond.
A third issue considered by the Committee was the position taken by Customs to eliminate the bond rider currently required to support Periodic Monthly Statements at the end of the test period. The tremendous resistance this generated in the surety community was gradually reduced to a single surety and it eventually allowed TSN revenue committee to address its residual complaint or reservation.
The next item is a report from John Hyatt on Carrier Best Practices Subcommittee on the issue of whether a broker should issue a delivery order, or in fact give any information to a carrier, to enable the carrier to complete a through bill of lading or door delivery. Our position is that we do not think it is a good idea for brokers to issue delivery orders or provide instructions, but didn’t want to foreclose the possibility that a broker in a business decision would be willing to provide information to a carrier in some other format (for a fee) which wouldn’t incur liability. Representative App pointed out that the Forwarding committee agreed unanimously that this issue is in the Customs Committee and should be handled there. The key question being asked by members is what is the NCBFAA doing in regards to the carrier campaign of going after Customs Brokers on the bill of lading for late fees, demurrage, and per diem.
Jurisdictional discussion ensued as regards the Customs and Forwarding Committees with respect to the bill of lading. Carrier Best Practices Subcommittee was initially charged with considering issues surrounding broker liability with delivery orders but debate has introduced questions of per diem and demurrage into their investigation. These overlapping issues revolving around carrier attempts to adjust the bill of lading language to their advantage have further drawn in both the Customs and Forwarding Committees.
Representative Bargteil took the view that the Carrier Best Practices Committee has been authorized by the Board to act without direct action from either the Customs or Forwarding Committee thus representing the position of the Board on these issues. Representative Fields suggested drafting a letter that could be sent to carriers seeking demurrage payments articulating the NCBFAA position on this as well as a letter to importers informing them likewise of this position and encouraging them to take up these charges in their negotiations with the carriers.
Two-part recommendation from Senior Counsel Harold Brauner was to first ask the Federal Maritime Commission if carriers have the authority to change bills of lading arbitrarily by redefining definitions to their benefit. Second, the Association should get involved with someone who has been charged these penalties and is willing to go to court and fight it out there. Question of Customs Committee going to FMC and it was suggested that the Customs Committee work hand in hand with Transportation Counsel Ed Greenberg. Counsel Greenberg cited litigation in Tampa, FL, trying to get a carrier to back down from a lawsuit against a broker for detention charges because the broker is listed as the consignee on the bill of lading but has otherwise done nothing. He indicated he had informed the carrier that continuing the lawsuit would not please the NCBFAA and would cause it to intervene at some level in the case. Discussion followed and the determination was made to redraft Customs Committee recommendation regarding delivery orders for distribution and use by members.
Next issue concerned CBP customs broker penalties issued at JFK to individually licensed brokers qualifying for permit and discussion followed as to whether to meet with CBP or send a letter followed and the decision was to draft a letter to CBP Headquarters since it only concerns a limited number of ports.
The discussion moved on to a letter recently provided to Larry Rosenzweig for one-hour seminar on the function and work of Customs Brokers to new inspectors and import specialists as part of their training at Glencoe, GA. We have received a positive response from John Leonard, but not sure how Mr. Rosenzweig is motivated so we are going to try to come in with a recommendation from another source and get it approved. Once approved, Area 1 Representative Amy Magnus will make the presentation. In additions, representative Weinberg suggested doing something similar with the Food and Drug Administration.
The discussion turned to ACE development and Representative Magnus reported that there have been very few successful manifests transmitted through release 4 in Blaine. She recommended that we encourage broker members to participate in pilot as soon as possible, noting that she had shared the CBP presentation with Chairman Bargteil. The consensus of the Committee is that failing to get involved will mean accepting whatever CBP creates.
Release 5 is being discussed in the new Trade Engagement program that relies on 20 Trade Ambassadors, among whom our industry is well represented. Plan is to have session on release 5 at Wednesday session, which is the anticipated time when it starts to become a reality. Starting to engage CBP’s C-TPAT Team Leader Todd Owen directly regarding the work on minimum C-TPAT standards for Customs brokers. It is important to get in early and avoid revisions and drafts resulting in something not satisfactory to anyone.
As regards the Certified Customs Specialist (CCS) program, the NCBFAA appreciates its responsibility to offer its membership means by which to maintain and improve professional expertise and to recognize those members whose dedication to that goal warrants distinction. The Customs Committee would like to take this opportunity to introduce the program to CBP. The Committee informed CBP of the NCBFAA CCS program, including its ongoing education requirement, and asked that CBP consider giving it official recognition, and work with us on future educational issues. In connection with upcoming NCBFAA events, the Committee discussed potential agenda items for the Government Affairs Conference and the NCBFAA Annual Conference. Discussion followed about filing an amicus brief to support limitation of liability that we had before hand on infractions under 1641.