CBP Moving Toward Greater Emphasis on Trade Facilitation
Volume 15, Issue 100
Monday, May 19, 2008
CBP Moving Toward Greater Emphasis on Trade Facilitation
U.S. Customs and Border Protection officials indicated at a recent meeting with the trade community that the agency is moving to bring its mission to facilitate legitimate trade more into balance with its mandate to protect national security. Although CBP has repeatedly stated in the post-9/11 environment that these are its “twin goals,” its focus in recent years has clearly been improving the security of the supply chain. It now appears that Customs is preparing to put more resources into trade facilitation, a move that is being welcomed by importers, exporters and others involved in global commerce.
The May 9 meeting of the Departmental Advisory Committee on Commercial Operations of CBP and Related Homeland Security Functions (COAC) addressed this and many other customs and trade-related issues.
Trade Facilitation. Commissioner Ralph Basham said that after nearly seven years of emphasizing supply chain security “we know we’re going to have to focus more of our energies at trade enforcement and facilitation.” He indicated that CBP will be relying on COAC for assistance in this effort, which will begin with the development of a new Trade Strategy. Brenda Brockman Smith, CBP’s executive director for trade policy and programs, explained that this strategy will center on four goals: facilitating legitimate trade and promoting compliance, enforcing trade laws, advancing national and economic security, and intensifying automation and further integrating it into CBP’s business processes. CBP will look to use many of its existing methods in pursuit of these goals, Smith said, including multi-layered risk management, pre- and post-arrival activities away from physical borders and the use of advance information. CBP is now in the process of consulting with the trade community, the departments of Homeland Security and Treasury, and the Office of Management and Budget to further develop the Trade Strategy, including determining the roles and responsibilities of the public and private sectors. Smith noted that one of the major challenges for CBP will be strengthening the trade expertise of its employees and that one of the ways it will seek to do this is through the active use of partnerships with the trade community.
Resumption of Trade. CBP officials said they have been working with other agencies as well as other countries to develop plans for the resumption of trade following incidents such as terrorist attacks, natural disasters, labor strikes, etc. An interagency agreement with the Coast Guard that focuses on the maritime transportation system will be tested during an exercise to be held in August in the ports of Savannah, Jacksonville and Charleston. CBP and the Canada Border Services Agency have developed general planning protocols as well as a more detailed business resumption communication and coordination plan, and the two sides recently conducted training on this plan at a number of northern border ports. Similar protocols are still under negotiation with Mexico.
At a recent congressional hearing on the resiliency of the U.S. supply chain, lawmakers and staff members said trade resumption is a primary concern for Congress and that the plans developed so far are not detailed enough. CBP executive director for cargo and conveyance security Todd Owen responded that “it is impossible to predict every significant event scenario or the details that will present themselves in an actual event” and that “our response to an actual event will depend on the facts we encounter and each response will be tailored to reflect these circumstances.”
Import Safety. According to officials, CBP has three key responsibilities with respect to import safety.
• cooperating with other government agencies such as the Consumer Product Safety Commission and the Food and Drug Administration to harmonize procedures and processes at the border
• fostering increased interoperability through the use of the International Trade Data System, refining shipment targeting policy and tracking goods via unique identifiers
• creating a new interactive network to gather additional information on product safety issues
Carol Cave, director of the CPSC’s new Import Surveillance Division, said her agency is considering the adoption of an approach similar to CBP’s Importer Self-Assessment program for product safety issues. However, she indicated that it is still early in this process and that the CPSC plans to hold further discussions with the trade before making any decision to proceed. COAC expressed concern with the idea and said it could pose substantial challenges for importers.
100 Percent Scanning. Rich DiNucci, director of the Secure Freight Initiative, said CBP is still testing 100 percent scanning of U.S.-bound cargo containers at three overseas ports and making progress toward the expansion of the test to three other high-volume ports. CBP sent its first report on the test to Congress in February and the second report is expected shortly.
Lawmakers said recently they will be interested to hear the report’s findings, particularly in light of Deputy Commissioner Jay Ahern’s recent statement that 100 percent scanning should be limited to high-risk trade lanes. A law enacted last year requires that by 2012 all oceanborne cargo containers must be scanned before being shipped to the U.S., but according to press reports at least some members of Congress are reconsidering that mandate. One factor could be the cost of scanning, which has been estimated at $20 per container by one House staffer but $500 per container by a recent European Commission study.
C-TPAT. Bradd Skinner, CBP’s director of industry partnerships, provided an update on the Customs-Trade Partnership Against Terrorism. Skinner said that as of April 17 there were 8,322 certified participants, 7,269 of which had been validated and 252 of which were receiving Tier 3 benefits. CBP has suspended 531 companies from the program, about half of them truck carriers, for failed validations or security incidents. Three joint validations have been conducted with China Customs since March and a pilot test of third-party validations in China is due to expire in June. CBP expects to issue a document on the benefits of C-TPAT participation sometime this year.
Skinner also addressed the status of mutual recognition efforts concerning other countries’ supply chain security programs. Mutual recognition has already been extended to New Zealand and agreements are expected to be signed with Canada and Jordan in June. Australia, Japan and Singapore are possibilities as well.
In-Bond. Director of cargo control Greg Olsavsky told meeting attendees that CBP is pursuing a number of efforts to improve its oversight and enforcement of the in-bond system, which were criticized in a report issued by the Government Accountability Office last year. For example, an improvement to the QP in-bond filing procedure is planned for ACE in late August. CBP is also considering regulatory changes, such as allowing 100 percent electronic filing, shortening allowable delivery times and imposing a single time period for all modes of transport, adding data to in-bond requests to better enable screening of restricted shipments, and requiring notice of diversions. Technological solutions are being explored as well. CBP is currently pilot testing the use of radio frequency identification on in-bond shipments between Los Angeles/Long Beach and Laredo. But Olsavsky said RFID is only an interim solution and that ultimately CBP will use container security devices to better control in-bonds.
ACE. Executive director for cargo systems Lou Samenfink said CBP is continuing to refine the electronic truck manifest module of the Automated Commercial Environment. Nearly four million truck e-manifests have been submitted already this year, he said, and truck processing times are down to 105 seconds. Ensuring the reliability and performance of this module is a priority for CBP.
Samenfink also announced that CBP will program 24 “hard edits” into ACE. CBP had identified 63 edits (which automatically make corrections to import entries) for possible elimination in the transition from the Automated Commercial System to ACE but has agreed to a trade community request to retain 24 of them.
WCO Framework. Assistant Commissioner for International Affairs Mike Mullen told the meeting that CBP has submitted to the World Customs Organization a proposed amendment to the WCO’s Framework of Standards to Secure and Facilitate Global Trade that would reflect CBP’s “10+2” security filing proposal. This amendment, which could be approved as early as next month, would only require the addition of five new data elements to the SAFE Framework.
In addition, Mullen said, CBP has recommended three criteria for approving any future changes to the framework: they must be in response to a national or legal mandate, there must be consultations with the trade community and the data elements to be added must be part of the WCO data model.
