Customs and Border Protection may be receiving high grades from the trade community for its attempts to streamline cargo entry and provide uniformity in its far-flung operations, but it’s apparent the agency needs more legislative support from Congress.
The American Association of Exporters and Importers, in comments filed May 17 at a congressional subcommittee hearing on Customs trade modernization, said the agency needs a “legislative framework to move forward with trade facilitation.”
Congress can help Customs do its job by passing legislation that gives the agency the authority it needs to facilitate the processing of low-risk shipments, and by appropriating enough money to finish the decade-long effort to develop Customs’ automated system, Marianne Rowden, the AAEI’s president and CEO, told The Journal of Commerce.
Customs has a number of initiatives to facilitate the clearance of low-risk shipments so it can concentrate on the high-risk shipments that present a true threat to national security. The AAEI applauds Customs’ efforts to move toward account-based management and the formation of trusted partnerships with importers and exporters, Rowden said.
The account-based system treats large importers as individual accounts so their shipments are treated the same way no matter which port of entry they transit. For example, an automobile company may generate a large volume of repetitive parts and auto shipments from the same suppliers in Asia or Europe, and the shipments move to the same destinations in the U.S. through various ports and airports.
By treating each large company as an account, Customs keeps its inspections to a minimum, and the company can operate in a just-in-time environment.
Customs is expanding the concept with its Centers of Excellence and Expertise. These industry-specific centers bring together Customs’ experts in a particular product, as well as supply chain experts from the private sector, to develop processes that expedite cargo flow while providing Customs with the data it needs to assess risk.
Customs last year established a CEE in Long Beach for the electronics industry and a CEE in New York for pharmaceuticals. It’s now developing a center in Detroit for autos and one in Houston for the petroleum industry, Acting Commissioner David Aguilar announced at Customs’ West Coast Trade Symposium in Long Beach this month. The agency eventually will establish nine industry-specific CEEs. Rowden applauded the CEE concept and said AAEI members are working with Customs to help develop the centers.
Despite such efforts, Customs is hampered by laws that force some of these streamlined programs to operate on a transactional rather than an account basis.
Rowden cited the simplified entry initiative at Customs that seeks to define the precise data elements the agency requires to perform risk assessment. Because a merchandise processing fee is attached to imports for revenue purposes, collection of the fee mandates government actions that in effect maintain a transaction-based process. “The law has to catch up,” Rowden said.
Customs’ efforts to work with the more than 40 federal agencies that participate in cargo clearance efforts to establish a “single government” at the border also are constrained by regulations and different computer systems at the various agencies. Over the past decade, Customs has been developing its Automated Commercial Environment and a particular module known as the International Trade Data System. The ITDS attempts to create a single government portal for trade documentation.
Because of political disagreements and a perpetual budget crunch, ACE is years behind its development schedule. Other government agencies cite the slow progress as a reason why they are developing their own clearance systems, Rowden said.
Money is a big part of the problem, and the AAEI is urging Congress to provide adequate funding so Customs can complete ACE. “I do not have a good feeling about the progress being made,” Rowden said.
Another reason for the delays in developing ACE is a lack of clarity in defining the right number of data elements Customs needs to do its job. “The problem is conceptual rather than technical,” Rowden said. The goal should be to define the minimum number of data elements Customs requires to determine admissibility of shipments, she said.
Aguilar, speaking at the trade symposium in Long Beach, had a similar message in terms of Customs’ process for determining which shipments to inspect. If Customs is basing its inspections on shipments that are risky, the policy is correct, he said, but if Customs is simply attempting to attain an arbitrary numerical goal for inspections, then the process must be changed.