Customs’ Balancing Act

Customs’ Balancing Act

The agency that for much of the shipping world has been on the frontlines of supply chain security since the September 11 terror attacks is facing new questions about how it balances security and the flow of trade.

Members of the Senate Finance and House Ways and Means committees, who oversee revenue functions at Customs and Border Protection, say they want the agency to pay closer attention to its traditional role of collecting revenue and facilitating trade.

The position has strong bipartisan backing, and Customs Commissioner Alan Bersin assured both panels in the last two weeks that Customs will work cooperatively with Congress and industry on trade.

The question now is how Bersin will follow through. His actions will affect the treatment Customs gets in legislation that reauthorizes the agency and how far Congress goes in giving those demands the force of law. The Senate panel has had a bill seeking to raise the revenue and trade profile since August 2009. Ways and Means leaders promised their version before the end of the year.

Most of Bersin’s May 13 confirmation hearing before the Finance Committee was taken up by senators grilling Bersin over his failure to properly document household employees. The issue endangers chances he’ll be able to keep the job beyond the term allowed under his recess appointment, but in matters closer to operations at Customs was another message from the committee
leadership: Customs will neglect its trade duties at its peril.

Sen. Chuck Grassley, R-Iowa, the committee’s ranking Republican, reminded Bersin of two of Customs’ policy missteps where the committee intervened: proposed changes in the “first sale” valuation rule, and in country-of-origin determination.

“I would like to raise the level of consultation between CBP and congressional oversight committees, as well as consultation between CBP and other federal agencies,” Grassley said.

On May 20, Rep. John S. Tanner, D-Tenn., acting chairman of the Ways and Means Subcommittee on Trade, said bringing goods into the U.S. had grown more complex since September 11, and “we need to examine the impact of these changes on Customs revenue collection and enforcement.”

The subcommittee’s ranking Republican, Rep. Kevin Brady of Texas, told Bersin consultation wasn’t simply providing a notice of rule-making. “It means engaging us in the decision-making prior to the rules and significant policy changes,” he said. “Do we have your commitment to increase meaningful consultation with the committee on these important changes?”

“The best way for me to answer that is by one word: Yes,” Bersin said.

The subcommittee’s agenda is clear: changes in structure, policy and operations to enhance Customs’ trade function; getting the Automated Commercial Environment and International Trade Data System back on track; providing tangible benefits to the trade for its security and compliance programs; account management for importers; and cracking down on uncollected duties and anti-dumping penalties.

By the time Tanner gaveled the hearing to a close, he and Brady said they were pleased with the outcome.

“Since 9/11, the focus has been so heavily on security there’s been very little relationship between this committee and Customs on trade issues,” Brady said. “I think this hearing is a fresh start, where we have the agency’s desire for better coordination, and we have lawmakers and the industry who think we can do better.”

Frank Vargo, vice president for international economic affairs at the National Association of Manufacturers, said he was encouraged. The NAM has been frustrated with Customs after seeing its suggestions seemingly fall into a black hole. Bersin may be able to realign Customs’ trade facilitation role, he said.

“I think Bersin means it. He has already called us together and said, ‘Tell me what you want. Tell me what your problems are. Where is the low-hanging fruit? What are your issues?’ ” Vargo said. Bersin promises an open door, even if he can’t promise everything the trade wants.

“That is remarkable, and we want that attitude to permeate down throughout CBP and ICE (Immigration and Customs Enforcement),” Vargo said. “We want an attitude that ‘we will work with you.’

“I will maintain my optimism that the commissioner can bring about changes that he wants to, and we’re going to work with him,” Vargo said. “I hope I feel the same thing in six months.”

Contact R.G. Edmonson at bedmonson@joc.com.