Customs Reauthorization Bill on Agenda
Reproduced with permission from InternationalTrade Reporter, 29 ITR 147 (Jan. 26, 2012). Copyright 2012 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com
Customs Reauthorization Bill on Agenda, but CBP Enters 2012 With Acting Chief
A customs reauthorization bill remains on the agenda of both the House Ways and Means and Senate Finance committees for 2012 but such a measure could once again get sidelined by a crowded legislative agenda.
U.S. Customs and Border Protection, meanwhile, has a new leader at its helm, with recess appointee Alan Bersin stepping down as CBP commissioner Dec. 30 after the Senate failed to confirm his nomination. Bersin had moved the agency toward greater emphasis on trade facilitation and modernization and worked to usher in closer ties with the trade community.
Congress failed to take any action in 2011 on a customs reauthorization measure to reform and modernize U.S. Customs and Border Protection (CBP) processes. No such measure was introduced last year although both committees were working on the issue.
Draft legislation is being reviewed in the House Ways and Means Committee with the goal of taking a less heavy-handed approach toward trade and security, a House aide told Bloomberg BNA. Work, which continues on a bipartisan basis, is trying to better integrate trade with security, reinforcing initiatives implemented by Bersin, the aide said.
On the Senate side, customs reform has been a long-standing priority of Senate Finance Committee Chairman Max Baucus (D-Mont.) A Senate GOP aide told Bloomberg BNA that Republicans want to get a customs bill out as soon as possible. The Senate Finance Committee is close to the final draft of its bill, according to a source. The committee's bill will improve trade enforcement and facilitation, a Finance Committee aide told Bloomberg BNA.
The House Ways and Means and Senate Finance committees are expected to have their drafts of the customs reauthorization legislation out around the same time, Jon Kent, a partner at Kent & O'Connor and Washington representative for the National Customs Brokers and Forwarders Association of America (NCBFAA), told Bloomberg BNA. He predicted a “fair” chance that such a measure could be passed in 2012.
“I don't think it's terrifically controversial … it's one of those housekeeping functions that the committees of jurisdiction are supposed to do,” he said. “If they can't do anything else [on trade] they may be looking to move customs reauthorization.”
American Association of Exporters and Importers (AAEI) President Marianne Rowden said in a phone interview with Bloomberg BNA that if the customs bill is not introduced in the first quarter of 2012 it could fall victim to a crowded and abbreviated legislative session.
“Anything beyond that [time frame], there's no way they're going to have that bill through,” she remarked. “The calendar is against us if it doesn't get introduced in the first quarter.”
Rowden said that she expected the House bill to be broader than the bill the Finance Committee is developing and will provide a framework for CBP trade operations going forward, including on account management.
Aguilar Won't Step Back
Bersin's successor—David V. Aguilar, CBP acting commissioner—has signaled that CBP would not step back from Bersin's trade facilitation efforts.
“I think it is an understatement to say that innovative efforts have been undertaken over the last couple of years,” Aguilar told a small group of reporters. “We are setting a path forward to ensure that we do not step back in any way. The foundation has been set, now we continue to build on it.”
Aguilar had previously served as CBP deputy commissioner and was the nation's highest ranking Border Patrol agent.
Continuing to find the balance between expediting legitimate trade and ensuring that the global supply chain is at its highest level of security is “critically important,” he said. In recent years, CBP has moved in lockstep with the trade community to identify problems and arrive at solutions, Aguilar said.
Aguilar told reporters that consistency and modernization will be very important to CBP's efforts in 2012. In addition to continuing work on simplified entry procedures, CBP will move forward with decommissioning the aging Automated Commercial System (ACS) and moving to the Automated Commercial Environment (ACE) in 2012, he said. ACE is the new import and export processing system that CBP has been working on and deploying in stages.
“One thing has to be clear—we are the regulators,” Aguilar told reporters. “But at the same time we have a responsibility to build toward efficiencies, toward identifying means to drive costs down to the industry and trade community.”
As part of the effort to facilitate low-risk trade and ensure consistent enforcement, CBP opened the Center of Excellence and Expertise—Electronics in Los Angeles and the Center of Excellence and Expertise—Pharmaceuticals in New York last October. CBP is expected to establish additional centers for excellence and expertise in 2012. According to CBP, the centers will continue efforts to increase consistency of practices across ports, facilitate the timely resolution of trade compliance issues, and improve agency knowledge on key industry practices.
Expansion Eyed for C-TPAT
Another area that Aguilar flagged as “critically important” was building on CBP's trusted partner programs—such as the Customs-Trade Partnership Against Terrorism (C-TPAT), which Aguilar said CBP wanted to expand into an “all threats” program.
Under C-TPAT, participants agree to heightened security measures for their supply chains in exchange for benefits from CBP, such as expedited clearance. C-TPAT is a voluntary government-industry partnership to guard the security of the global supply chain as part of CBP's response to the 9/11 terrorist attacks against the United States.
One of the issues CBP will explore going forward is taking C-TPAT beyond its roots as a security-specific program. While the program historically has been focused on security aspects, CBP is looking at making it all encompassing for all threats—everything from security, intellectual property, counterfeit goods, narcotics, weapons, and money smuggling, Aguilar said. “How quickly? As quickly as we can,” he said.
C-TPAT is foundational to the security of the supply chain, Aguilar remarked. “Is it an all-threats program? The answer should be yes. … How do we work with the trade community to make it an all-threats program?” Aguilar asked.
The acting commissioner said that CBP was looking at working with the Commercial Operations of Customs and Border Protection Advisory Committee (COAC) to ensure that information flows are protected in every way they should be protected. “We're looking to co-create this [with the trade community],” he remarked.
CBP will also be very heavily focused on trade enforcement moving forward, Aguilar told reporters.
CBP plans to take all of the “pillars” put in place over the last several years and build on that foundation, Aguilar said. With the foundation having been set, outreach to the private sector is absolutely critical in deciding on how to build on that foundation, he remarked.
NCBFAA's Kent welcomed Aguilar's commitment to continue Bersin's stepped up outreach to the private sector.
NCBFAA and CBP have achieved consensus on most of the revisions CBP is considering on the role of the broker, Kent said, speculating that this could be an area for CBP rulemaking in 2012.
Rowden said that an another possible area of proposed rulemaking would deal with certain data elements for carriers when non-vessel operating common carriers are involved. This is more in the nature of a clarification, she said.
The government's global supply chain policy could be released in January, Rowden speculated.
C-TPAT for Exporters?
CBP is also exploring opening the C-TPAT trusted shipper program to exporters—a change that could be made in 2012. C-TPAT members include importers, brokers, carriers, and certain foreign manufacturers, but not exporters. CBP is expected to rollout a C-TPAT pilot program for exporters in 2012.
In 2012, C-TPAT will continue to work with its industry partners on the program, a CBP official told Bloomberg BNA on background. C-TPAT will continue to engage with other government agencies to examine and qualify like processes in agency programs to reduce redundancies and further cooperation, the official said.
MRA With EU This Year
No major policy changes will take effect by the time a mutual recognition arrangement with the European Union is signed in March of this year. Both parties agree that this is a reciprocal understanding and that benefits will be afforded to members of both programs, the CBP official said.
C-TPAT is engaged with the following countries with the objective of signing mutual recognition arrangements with each of them: Singapore, Taiwan, and Switzerland. The best possible candidate at this point for a mutual recognition arrangement in the Americas is Colombia, which has had an operational program since September 2011. A pre-mutual recognition pilot program is being conducted with Colombian Customs, the official told Bloomberg BNA.
AAEI is also closely watching ACE development going forward, Rowden said. With the nation in a period of fiscal austerity, Rowden expressed concern that appropriators might balk on appropriate funding for the project.
ACE will facilitate collection and distribution of standard electronic import and export data required by all federal agencies participating in the International Trade Data System.
On ACE, Aguilar told reporters that it was no secret that budgets are tight in 2012. Cindy Allen, executive director of the ACE business office, CBP Office of International Trade, will look at the ACE processes that may need to be adjusted or improved upon and the processes that will be developed as ACE moves to new functionality, he said.
According to Aguilar, one of the issues is “how do we find efficiencies with what we have today—recognizing that ACS has to be sunsetted—but how do we do more of that as quickly as possible to redirect more [resources] toward ACE development?”
A CBP official told Bloomberg BNA on background that full implementation of ACE e-manifest for rail and sea (MI) is planned for March 2012. MI provides a consolidated view of rail and sea shipment manifest and entry data at the bill of lading or container level to facilitate the identification of shipments that may pose a risk and expedite the pre-arrival processing of legitimate cargo.
An ocean carrier and a rail carrier are currently participating in an M1 pilot program. Additional trade participants will be added on a regular basis beginning in mid-January 2012. The M1 functionality is currently being used at 17 CBP ports, the official said.
Testing on simplified entry—an initiative to streamline the release of cargo and to reduce the number of duplicative data elements required to obtain release of products for cargo, eliminating the current entry (CBP Form 3461)—is slated to begin in late January 2012. The initial pilot is scheduled for March 2012, the CBP official said.
The Environmental Protection Agency and National Marine Fisheries Services have volunteered to join in the CBP pilot test of the Document Image System (DIS) in 2012. DIS allows trade members to electronically supply documentation needed during the cargo release process to CBP and other federal agencies, the CBP official said.
Rowden predicted that 2012 could be the year that CBP, the trade community, and the other government agencies dealing with imports come to some sort of understanding or partnership. She said that CBP was not a problem for many companies but that they encountered difficulties with the Food and Drug Administration, the Environmental Protection Agency, and the Department of Agriculture, among other agencies responsible for imports.
Retrospective Duty Collection
With respect to CBP's shortfall in collecting antidumping and countervailing duties, Rowden said that said that the problem was the retrospective system of duty collection. The Commercial Operations of Customs and Border Protection Advisory Committee (COAC) will take a close look at that issue in 2012 and come up with recommendations for the commissioner, she said. However, change is not anticipated in 2012, as any change would require legislation, she said. At its last meeting, COAC backed a recommendation for a prospective system to assess and collect antidumping and countervailing duties. -- by Rosella Brevetti
CBP has also launched pilot programs to test the feasibility for advance electronic data for air cargo shipments—an area CBP is likely to devote continued attention to in 2012.
While Bersin no longer heads CBP, Department of Homeland Security Secretary Janet Napolitano announced recently that President Obama appointed Bersin to the newly created position of DHS assistant secretary of international affairs and chief diplomatic officer. In that role, Bersin will oversee the strategic development and execution of DHS's international plans and policies and will forge new partnerships with foreign governments and international organizations.
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