No reason not to do it

No reason not to do it

In the lead-up to the March 18 deadline for comments about Customs and Border Protection's 10+2 requirement for security filing of trade data, two things are clear, and one more isn't but needs to be. What is clear is that for Customs and the trade community, the security filing program is an undertaking of historic proportions, vastly more far-reaching than earlier Customs measures because it will directly affect not just brokers, forwarders and carriers, but also the roughly 830,000 entities that import products in the U.S.

Also clear is that, consistent with its ambitious goal of giving the government visibility into the supply chain back to the origin of the goods entering the U.S., there will be resistance. Recent talk in the trade community has been of individuals at certain shippers believing that the program needs to be not merely overhauled, but shelved.

That level of dissent, driven partly by the lack of benefit that importers have seen from participating in earlier security measures such as C-TPAT, means that a battle of wills between Customs and certain elements of the trade community - but not all - may be taking shape.

"There is a difference between concern and opposition," said Al Thompson, vice president for global supply-chain policy at the Retail Industry Leaders Association, which plans to raise several issues in its comments but won't oppose the program.

That leads to what needs to be clear but isn't: Customs' commitment to getting this done no matter what. One would think that because Customs spent months developing the rule and ushering it through an arduous approval process within the administration, and because improved data collection is mandated in the 2006 SAFE Ports Act, its commitment would be a foregone conclusion. Certainly, you wouldn't hear any differently from Customs.

But a program of this magnitude requires more than just momentum out of the gate. To implement a change of this enormity, which will require importers to produce accurate information from deep within their supply chains, the agency must live and breathe 10s and 2s for the many months and probably years that it will take to get this behind them. There must be institutional momentum that survives a change in administration and leadership at Customs, and possibly in Congress. Some don't question Customs' resolve; others say they will wait and see.

At this early stage, however, Customs certainly has a head of steam. Ironically, that in itself could prove to be a problem if, in its zeal to forge this program into being, Customs closes itself off to legitimate input from the trade. An early test: the basic plan for how the system will be rolled out. Customs officials have said they plan to take a traditional informed-compliance approach to the security filing, meaning that it would implement the rule effective on a specific date, give the trade time to understand it, and then gradually begin penalizing parties for non-compliance.

Last week, the official commercial advisory group to Customs, COAC, alarmed about the uncertainties of the program, discussed a recommendation that would represent a potentially significant departure from informed compliance. Instead of Customs implementing the rule and phasing in enforcement, COAC suggested phasing in the program itself, perhaps through an initial pilot program using voluntary participants.

This is an idea that cannot sit well with Customs, which wants to show progress in implementing the SAFE Ports Act and to strengthen the hand of opponents of 100 percent foreign scanning, which Customs and the trade community oppose vehemently.

Ultimately, it is reasons such as that - bigger-picture ones - that to me align the interests of Customs and the trade getting the security filing done with as much efficiency, and as few theatrics, as possible. Requiring 100 percent foreign scanning may be a purely political law, but giving the government visibility into container supply chains back to the origin comes a lot closer to the type of natural evolution of container security policy originating from 9/11.

Most importers have joined C-TPAT and wait without complaint for promised benefits to materialize, knowing that day may never come. If there was a commercial benefit for importers to have the type of visibility Customs is demanding, it would already have happened on its own, so there is not likely to be much commercial incentive for importers to comply, other than avoiding penalties. But that is no reason not to get on board.