Transportation Corner

Gary Ryan

As news items come up, I will try to bring them forward in our newsletter. Just as the NCBFAA and PCC
have moved Freight Forwarding into Transportation, I will attempt to cover worthy news items on them
here.

Freight Forwarders, Customs Brokers and NVOCCs & Property Brokers – About a week ago, we
received a newsletter from a transportation attorney stating that freight forwarders, customs broker and
NVOCCs needed to file applications and bonds with the Department of Transportation to become Property Brokers. A year or two ago, the NCBFAA addressed Congress on proposed legislation that would have required our industry to have to also become property brokers. Jon Kent, Ed Greenberg and the NCBFAA were able to, for the most part, get our industry excluded from the legislation that was passed by Congress and signed into law. Below is an excerpt from the law showing what is exempted, under Exceptions. As long as the movement of the freight is part of, and incidental, to the international movement and customs business, then we should be exempted. But, if the international movement has ended and the freight enters the importer’s warehouse, if you are involved with the further movement of the freight, a Property Brokerslicense may be required.

‘‘SEC. 14916. UNLAWFUL BROKERAGE ACTIVITIES.
‘‘(a) PROHIBITED ACTIVITIES.—A person may provide interstate brokerage services as a broker only if
that person––
‘‘(1) is registered under, and in compliance with, section 13904; and
‘‘(2) has satisfied the financial security requirements under section 13906.
‘‘(b) EXCEPTIONS.—Subsection (a) shall not apply to—
‘‘(1) a non-vessel-operating common carrier (as defined in section 40102 of title 46) or an ocean freight
forwarder (as defined in section 40102 of title 46) when arranging for inland transportation as part of an
international through movement involving ocean transportation between the United States and a foreign
port;
‘‘(2) a customs broker licensed in accordance with section 111.2 of title 19, Code of Federal Regulations,
only to the extent that the customs broker is engaging in a movement under a customs bond or in a
transaction involving customs business, as defined by section 111.1 of title 19, Code of Federal Regulations;
Or
‘‘(3) an indirect air carrier holding a Standard Security Program approved by the Transportation Security
Administration, only to the extent that the indirect air carrier is engaging in the activities as an air carrier as
defined in section 40102(2) or in the activities defined in section 40102(3).
‘‘(c) CIVIL PENALTIES AND PRIVATE CAUSE OF ACTION.—Any person who knowingly authorizes,
consents to, or permits, directly or indirectly, either alone or in conjunction with any other person, a
violation of subsection (a) is liable—
‘‘(1) to the United States Government for a civil penalty in an amount not to exceed $10,000 for each
violation; and
‘‘(2) to the injured party for all valid claims incurred without regard to amount.
‘‘(d) LIABLE PARTIES.—The liability for civil penalties and for claims under this section for
unauthorized brokering shall apply, jointly and severally—
‘‘(1) to any corporate entity or partnership involved; and
‘‘(2) to the individual officers, directors, and principals of such entities.’’.

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IACs and the TSA – The TSA recommends that IACs keep their cargo security programs in a notebook
that is organized and easy to review and inspect. Keeping such a notebook saves time when the TSA comes in to do an audit. Below is what the TSA recommends.

IAC- TSA- NOTEBOOK SECTIONS SUGGESTIONS - This is not all-inclusive. Please refer to your IACSSP
for records retention and regulation requirements.

1.  SECURITY PROGRAM (currently) (IACSSP Change 5.A)
2. AMENDMENT - 08-001-H or AMENDMENT - 08-002G ?
3. AUTHORIZED REPRESENTATIVES:
   • Implementing Instructions:
   • SSI, Falsification of Records and security responsibilities.
   • Evidence of receipt of Implementing instructions
4. EMERGENCY CONTACT LIST
5. STA DOCUMENTS: CFR 1540.203
   • Applications – Signed and dated by employee & employer
   • ID used to Authenticate identity
   • TSA – Pass Status letter or screen shot of IACMS
   • STA Numbers associated in the IACMS -As of Aug. 1, 2011 for Direct employees and authorized representatives
6. TRAINING:
   • For Direct employees & authorized representatives
   • Names, Dates, description, test results.
7. KNOWN SHIPPERS
8. CONSENT TO SEARCH
9. CERTIFICATIONS STATEMENTS
10. TSA- APPROVAL CERTIFICATE

This is not all-inclusive. Please refer to your IACSSP for records retention and regulation requirements.