Customs Business Fairness Act Reintroduced
The Customs Business Fairness Act, a bill that would restore a carve-out to bankruptcy law that would protect customs brokers, was reintroduced in the House last week. The bill would make it so that the money that brokers send to CBP to pay tariffs is not subject to clawback if the clients who paid the tariff go bankrupt. In bankruptcy, clawback provisions are there so that company insiders or other parties don't get favorable payments just before a filing.
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Customs brokers had pushed for 20 years for such a policy, arguing that they are just a conduit for these payments, and the law was changed for one year, in 2021, but the temporary relief expired.
Rep. Andrew Garbarino, R-N.Y., who leads the bipartisan bill, sent a statement via email about why he wants to get the policy changed: “Long Island is home to several major ports where customs brokers help streamline the importation of millions of dollars’ worth of goods into the New York City area and generate significant economic output across sectors for our local economy. This bill would make permanent certain liability protections for customs brokers and eliminate the risk of undue financial burdens which could threaten the efficacy of our vital import/export industry.”
Reps. Gregory Meeks, D-N.Y., Don Bacon, R-Neb., and Lucy McBath, D-Ga., are also original co-sponsors. The bill is under the jurisdiction of the Judiciary Committee. McBath sits on that committee.