Customs' Wish List

Senior managers at Customs and Border Protection have had several recent meetings in the Los Angeles area, explaining agency priorities for fiscal 2012. Although Customs will function for at least a year without a permanent head, the agency will move forward under the capable leadership of Acting Commissioner David Aguilar with the following priorities:

-- Consistency, harmonization and uniformity. Whether dealing with the trade community or partner government agencies, Customs wants to continue to heighten its efforts to be more consistent with the decisions being made by ports, harmonize those decisions and act uniformly to the extent reasonably possible.

-- Modernization. Develop the remaining portals and programs under the Automated Commercial Environment. Also on the agenda is to become electronic with the Court of International Trade, developing a portal for attorneys and other interested parties to be able to interface with. While paper copies of notices of liquidation have been eliminated, the official notice of liquidation is still antiquated — by regulation, it’s a paper list posted at the customhouse where the entry was filed. Customs wants to update this process so the notices can be posted on www.cbp.gov. As such, not only does modernization include completing computer programming and upgrades, but also updating Customs policies and procedures.

-- Co-creation of trade programs with stakeholders. One issue under discussion is how Customs defines a trusted trader. Does it mean a validated member of the Customs-Trade Partnership Against Terrorism, or must one also be a member of the Importer Self Assessment program? If an ISA member, what additional benefits could or should accrue? Similarly, in rolling out the Centers for Excellence and Expertise, Customs is meeting with and seeking input from trading partners so it can better educate its staff about current business practices, with one goal being to make the program as successful as possible. Part of this includes the expansion of C-TPAT to include exporters.

-- Continued trade enforcement. Enforcement would be focused primarily, but not exclusively, on the primary focus issues; most often mentioned are anti-dumping, intellectual property rights — IPR, of course, overlaps with trade program co-creation — and revenue collection. Customs also wants to increase its knowledge base, which we can expect translates into increased free trade agreement verifications, and added focus on textiles, import safety, IPR, agriculture and personal effects, softwood packing materials, fresh cut flowers, bulk currency, weapons, and unlicensed technology.

-- Education. Customs recognizes it learns a lot from its C-TPAT members about supply chain security measures, but wants to learn more from industry about brand protection techniques and counterfeiting trends; here should be added gaining a better understanding about other segments of the trade community, such as customs brokers, ocean and air carriers, railroads, trucking companies, and warehouses.

As Customs moves forward, it will continue to segment risk. The agency has long been challenged to do more with limited resources. This plays itself out in risk management when Customs spends much in the way of resources to develop programs that benefit large companies, but are not viable for smaller companies because of reduced funds and smaller staffs.

As such, in its own way, Customs is developing the haves and have nots — or to borrow a phrase from the recent Occupy movement, the 1 percent and the 99 percent. The 1 percent would be the large companies that get benefits such as C-TPAT and the ISA. We have to wait and see if simplified entry really works for smaller companies, but there’s no doubt it helps the big ones, so their cargo moves more cost effectively and smoothly through the supply chain. Because they typically can’t afford the cost and don’t have the economic leverage over their business partners to gain entry into C-TPAT or ISA, smaller companies are automatically lumped into the higher risk category and so end up with more inspections, higher cost and more delays.

Another topic being mentioned for the coming year is shifting enforcement from parking tickets to meaningful cases, especially regarding penalties. For example, are there alternatives to imposing a penalty or seizing goods? Should a first-timer be treated the same as a repeat offender? What statutory or regulatory changes will be needed to implement these revisions?

In the context of the Centers for Excellence and Expertise, segmenting the risk works as a practical matter. Is Customs better off spending its resources helping the big guys or the little guys? What more can be done to help the small and medium-sized companies?

Susan Kohn Ross is an international trade attorney with Mitchell Silberberg & Knupp in Los Angeles. Contact her at skr@msk.com.

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