As you know (for those of you who have been following our blog), U.S. Customs and Border Protection (CBP) held its annual East Coast Trade Symposium on December 5-6, 2017, in Atlanta, GA. Below summarizes the panels I attended, would love your thoughts if you were there. For those that couldn’t make it – hope below proves useful as a summary for you!
The event kicked off with Brenda B. Smith, CBP’s Office of Trade Executive Assistant Commissioner, introducing CBP’s trade strategy and the four important lanes CBP is focusing on:
- CBP’s efforts to protect the country from threats posed by high-risk goods moving in and out of the U.S. remains a top priority.
- CBP is developing the Trusted Trader Program, including:
- A strategy to develop with Commercial Customs Operations Advisory Committee (COAC);
- A Collaboration effort of Customs Trade Partnership Against Terrorism (CTPAT), Importer Self-assessment (ISA), and Partner Government Agencies (PGA)s;
- COAC is working to update the criteria for CTPAT and CTPAT is transitioning to Authorized Economic Operator (AEO), which will get mutual recognition globally.
- Increased efforts in identifying theft of Importer of Record (IOR) numbers
- Apple, Toyota, VLM Foods, and Rico are some of the participants in the Trusted Trader Program.
- With the rapid rise in e-commerce, CBP is implementing new security procedures to identify and prevent inferior or unsafe merchandise from entering the U.S. while demonstrating commitment to supporting small businesses.
- Large corporations will be required to take an overt step to acknowledge security in supply change and implement cyber security measures.
- Corporations must perform a systematic inspection of conveyances and seals.
- There will be a phased implementation of security measure requirements with feedback from trade industry.
- Trade Facilitation
- CBP is geared toward “Next generation facilitation,” which includes opportunities for deregulation and new business models.
- The Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA), will lead the global economy.
- CBP is tasked with reducing regulation, establishing transparent requirements, and providing clear guidance to the importers.
- CBP is working on building an electronic export process to eliminate the costly and time consuming process currently in place to facilitate exports.
- CBP is creating innovative processes that will expedite importation and exportation and minimize disruption to commerce.
- Intelligent Enforcement
- Allows CBP to integrate and apply information, authorities, and resources to enforce trade laws and regulations.
- To streamline enforcement, CBP will:
- Analyze the information more carefully can help detect patterns and help:
- Look for future violations
- Identify violators
- Get better about delivering consequences (from 19th century – enforcement, which were long, burdensome, and expensive).
- Bring more focus on small packages
- Implement repeated seizures, which is the cost of doing business
- Use Center of Excellence and Expertise (CEE)’s expertise to make cost of repeat offenders high enough to deter continued violations.
- Analyze the information more carefully can help detect patterns and help:
- Resource Optimization
- Focused on getting the best value for taxpayers by determining the level of resources needed and the willingness of the stakeholders to invest in CBP.
- For every dollar spent in CBP trade personnel or technology, $87.00 are returned to the economy through:
- Lowering the costs of trade;
- Ensuring a level playing field for domestic industry; or
- Innovative IP protection
- CBP will make itself as efficient as possible.
- All the new implementations make a strong business case for stakeholders to consider CBP as a good investment.
Executive Assistant Commissioner Smith also commented on top questions CBP and the trade community should consider when looking at the future of CBP in the new global trade market:
- How do we want to manage our borders (trade, security, revenue, supporting a vibrant US economy)?
- How can we reduce risk of future trading patterns so consumers are safe & secure?
- What support should government have over supply chain intermediaries here and overseas?
- How should we partner internationally and with who? What should we ask for?
- How can government adopt new technologies?
Next, Acting Commissioner Kevin McAleenan explained what keeps him up at night. His sentiments were based on the rapid change in the way people shop which raises the following worries:
- The increase of small package movement combined with the recent threats of attack on commercial aircrafts
- Direct consumer shipping
- Contributes to the opioids epidemic, facilitates access to opioids—fentanyl, carfentanil, and its analogs.
- Balancing the prevention of opioids from entering the U.S. without slowing down trade.
- The increase in the de minimis value to $800.00 now allows many more small, direct consumer shipments to be imported duty and tax free every day.
- Mission support
- CBP must find a way to use new technology and make it redundant, resilient, and cyber secure.
- CBP has been given numerous new mandates and now needs to hire and train new officers to effectively enforce the mandates.
- Changes the threats to CBP and CBP must evolve to meet these threats
- Amplifies threats and makes them harder to find
- Dramatically increases the number of shipments
- Make it difficult to see transactions in a typical supply chain
- Has caused the biggest shift in the global supply chain
- Has sustained growth and will continue to do so
- CBP is working hard “to try to keep up with it,” by:
- Creating a dedicated division in the Office of Trade;
- Attempting to get the right data in advance and use technology because CBP does not have the manpower to open and physically inspect 600 million express consignment packages;
- Working to train K9s to address new threats; and
- Working to honor de minimis through these new changes.
Deputy Secretary Elaine Duke followed as the keynote speaker, in her last public address as the Department of Homeland Security’s (DHS) acting secretary. Her remarks included:
- Terrorism, dangerous criminals, unsecured borders, cybertheft, and natural disasters are not the only threats to homeland security.
- People forget that dangerous products are also a threat.
- Some examples include, tainted baby formula and counterfeit batteries.
- Import safety requires the cooperation of many agencies. Deputy Secretary Duke stated, “[w]e need your voice. We welcome your voice and knowledge to keep the American people safe.”
- DHS is also committed to helping end forced labor:
- It is “one of the most complex supply chain issues facing the global economy.”
- “While not a new problem, it is one with moral implication for all of humanity.”
- “Forced labor creates an uneven playing field for businesses.”
During the Trade Symposium there were several panels and breakout sessions, including:
North American Collaboration for Cargo Processing
- The ports of the future will have unified cargo processing
- This was an idea from the Nogales, Arizona Director of Field Operations.
- Unified cargo processing has reduced three-hour wait times to thirty-minute wait times.
- Nogales was the first port of entry to implement unified cargo processing. The concept has Mexican customs officers working side by side with CBP officers on the United States side to jointly inspect and process shipments of cargo destined for the United States.
- Currently eleven ports in the southwest border are utilizing unified cargo processing
- CBP is currently working on California/Mexico ports using the same process
- Advanced Qualified Unlading Approval (AQUA) Lane
- Another field office idea that allows low-risk sea carriers in the CTPAT program to formally unlade their cargo prior to CBP arriving at the vessel, upon prior approval.
Modernizing Imports and Exports
- The Customs Modernization Act of 1993 (Mod Act) is over twenty years old, while the international trade ecosystem and CBP have evolved significantly.
- Government must partner with industry to chart the course for the next twenty-five years of trade.
- Any revision to the Mod Act should include cloud computing and outsourcing and not include limitations of physical locations of data.
- It has been shown that there is no benefit to the recordkeeping compliance program because not many companies signed up for it.
- E-commerce is a threat to CBP because of the high volume of imported goods entering in small packages. This is a change from the traditional 40-foot shipping container
Evolution of Trade: Opportunities and Challenges of E-Commerce
- Todd Owen, the Executive Assistant Commissioner of the Office of Field Operations and the moderator, stated that, CBP “needs the consumers to take more responsibility for the buying decisions they make,” when shopping online.
- There were 105 million parcels delivered in the U.S. this year, which is up from ninety-eight million in 2016.
- 4 million parcels arrive every day in the U.S. through twenty-five express couriers and nine (9) international mail facilities.
- The Universal Postal Union (UPU) consists of 192 member countries and is the primary forum for cooperation between postal sector players. The UPU sets the rules and security standards for international mail exchanges and makes recommendations to stimulate growth in mail, parcel, and financial services volumes and improve quality of service for customers.
Border Integrity Executive Council (BIEC)
- Formally established on February 19, 2014.
- The BIEC has two main requirements:
- The completion and government-wide utilization of the International Trade Data System (ITDS) by December 31, 2016, and
- The establishment of a two-tiered governance structure to manage implementation.
- Will work through the Automated Commercial Environment (ACE) to allow businesses to submit data required by CBP and its Partner Government Agencies (PGAs) to import or export cargo through a “single window” concept.
- Government agencies and industry representatives provide insight into enhanced interagency coordination and revised external engagement collaboration.
- BIEC meets its goals, while avoiding negatively impacting trade.
Trade Facilitation and Enforcement “TFTEA” Priorities
- CBP “tries to stop, bugs, thugs, and drugs from entering the U.S. border.”
- CBP has determined that facilitation efforts must
- Add value to trade;
- Not impede trade; and
- Integrate trading partners
- CBP has recently developed an intellectual property rights public education campaign to warn people about the dangers of counterfeit goods.
- CBP wants every American “to be enforcer. . . and understand that it is not okay to buy a fake imported Rolex watch on the street in New York or in a back alley while on a vacation abroad.”
Cargo Enforcement & Facilitation Innovation
- AQUA Lane Pilot program
- Currently operating in twenty ports of entry
- Have been operational for ten months
- CTPAT carrier may arrive at a CTPAT port and request AQUA Lane privileges; for example:
- Vessel can dock, hook up to power, and begin unlading
- CBP must still release items
- Gives port terminal operators and sea carriers more time
- Allegedly saves hundreds of millions of dollars
- CBP is looking to make it a permanent benefit in the future
- The program is an example of CBP’s modernization efforts.
- Any high-risk cargo is still 100% scanned.
In conclusion, we highly recommend the trade community to participate in next year’s Trade Symposium. CBP has a recap of their own here for you to check out and compare! CBP announced the dates already – so SAVE
October 17-18, 2018 – THE AMENDED DATE WAS ANNOUNCED TODAY – August 14-15, 2018! If you need more information on any of the topics summarized above, we at DTL are here to help. As always, we are a quick email or phone call away! 305-456-3830 or email@example.com.