How to deliver the WCO Framework

How to deliver the WCO Framework

Customs and Border Protection was and continues to be a driving force behind the World Customs Organization's Framework for Security and Trade Facilitation. The framework rests on two key pillars that emulate CBP security initiatives, but CBP has deployed them only for imports, while the framework extends them to exports as well. That could pose problem for the U.S.

The framework calls for advance electronic reporting of cargo information, and inspection of cargo before it is loaded aboard the carrier, if the importing country requests it. The two ideas were the basis for the Container Security Initiative, but CSI was an initiative for import cargo. The Trade Act of 2002 requires exporters to provide advance cargo data, but enforcement of this part of the law has been deferred until the Census Bureau completes regulations to implement it.

At the Trade Symposium last November, CBP announced its intention to provide "advance electronic manifest information" to comply with the framework's requirements. However, work on the manifest is not scheduled to begin in the Automated Commercial Environment until 2009. The information would incorporate data elements from the Census Automated Export System with information traditionally listed on the cargo manifest.

The electronic export manifest would provide most of the 24 data elements required for the framework's export goods and cargo declarations. Given the international character of the data exchange, some tweaking would be required, but in theory, the ACE manifest would fit the bill and meet the framework's requirements.

The electronic export manifest seems like a good idea, but it has a major problem. The U.S. government cannot provide export information to any country, or a private entity. Census regulations forbid sharing any information with foreign governments that is collected from exporters by AES or shipper's export declaration. The secretary of commerce can make exceptions but only on a case-by-case basis when the information is determined to be in the national interest.

Can the U.S. really claim to be part of the game if we can't comply with the framework's two pillars? Can we take the posture that our exports are so safe that no other country needs advance information or should require a cargo inspection? If challenged, how do we respond to the other 115-plus countries that have committed to the framework?

Our dilemma is obvious. Other countries see us as the experts on cargo security. Our technical attach? is in Brussels to support the WCO "capacity building directorate." We have a new "capacity building and framework implementation" division in the CBP Office of International Affairs. But regulations prevent us from fully implementing the framework ourselves.

What to do? Here are some options:

-- Eliminate the Census confidentiality provisions. Changing these regulations is hard to justify as being in the national interest, or promoting homeland security. Both Congress and the administration would likely oppose providing foreign governments with U.S. manufacturers' sensitive trade information. The trade would be outraged by the elimination of decades of security. And Census would strongly oppose any effort to usurp its mandate to protect this data.

-- Negotiate agreements with other Framework signatories.

-- Negotiate bilateral agreements to allow data to be released with the permission of the secretary of commerce. This is possible under current regulations. The U.S. currently exchanges trade data with Canada, but it is not a security initiative, and the data is not provided in advance of export. Negotiating bilateral agreements with more than 115 WCO members would be an arduous process.

-- Perform risk targeting for other WCO members.

-- Use CBP's Automated Targeting System to target high-risk cargo for other countries, based on U.S. electronic cargo data. This would meet our obligations under the WCO framework. The objective of advance information is to permit the country of import to determine whether the cargo needs to be examined before it is loaded. If the CBP system can achieve this, problem solved.

Next steps: CBP needs to begin now to develop an Internet-based export system that mirrors the one used for import, collects the 24 data elements required by the framework, and adjusts the targeting programs to meet the express needs of other WCO members. Then, instead of being out of the game, we'll be first out of the gate in providing advance export information.

Karen Brooks is president of Karen Brooks Consulting Inc., a New York-based firm that specializes in export-import compliance and online trade services. She can be contacted at (212) 666-3330 or at karen@karenbrooks.com.