CBP, Treasury, Etc. Testify on Trade Facilitation, Enforcement

On May 20, 2010, the House Ways and Means Committee’s Trade Subcommittee held a hearing on Customs Trade Facilitation and Trade Enforcement. The Customs Commissioner and other government witnesses presented testimony and answered questions. Highlights of what was covered include:

Hearing Considered ACE, Accounts, AD/CV Enforcement, Etc.

The Subcommittee’s discussions focused on trade facilitation, enforcement of U.S. trade laws, and the development of Customs Reauthorization legislation. Issues of concern included:

• timely implementation of the Automated Commercial Environment (ACE) and the International Trade Data System (ITDS);
• adjustments to advanced data security initiatives such as “10+2” and security programs like the Customs-Trade Partnership Against Terrorism (C-TPAT) to better provide security and facilitate legitimate trade;
• the concept of “management by account” is explored as a possible new model for managing the importing process and facilitating legitimate trade;
• a review of CBP’s structure, policies and operations occurs, in order to determine whether they are adequately supporting CBP’s trade facilitation and commercial enforcement functions;
• robust CBP and Immigration and Customs Enforcement (ICE) revenue collection and customs enforcement efforts;
• that drawback simplification is addressed; and
• antidumping/countervailing duty enforcement efforts improve.

(See ITT’s Online Archives or 05/14/10 news, 10051427, for BP summary of recent Senate Finance hearing on the nomination of Commissioner Bersin.)

CBP Commissioner’s 1st Steps for Trade to be Risk Management/Segmentation

In his written hearing statement, CBP Commissioner Bersin stated that CBP is moving forward with new partnerships and enforcement techniques. For the trade community, the Commissioner states that this will require exercising reasonable care in customs matters, providing more information so CBP can do a better job assessing shipment risks, and investing in the resources necessary to keep up with current requirements.

When questioned by Subcommittee members, the Commissioner stated that his first steps toward improving CBP’s emphasis on trade would be to develop databases and automated targeting systems that will allow CBP to improve risk management and segmentation.

Commissioner Also Wants CBP to Address AD/CV Concerns

In his written statement, the CBP Commissioner stated that he would like to see CBP enhance its AD/CV duty and intellectual property rights enforcement efforts. According to Bersin, CBP’s AD/CV duty priorities are:

• addressing circumvention of trade laws, such as transshipment before the goods arrive at the U.S. port of entry, by expanding its international partnerships.
• using risk-based criteria to more accurately target shipments for examination. CBP’s targeted enforcement approach includes using laboratory resources to identify suspected transshipment.
• verifying the country of origin, classification, and valuation of goods subject to AD/CVD ordershttp:/
• partnering with trade stakeholders and government agencies, such as the Department of Commerce and DHS’ U.S. Immigration and Customs Enforcement, to enforce AD/CVD orders.

Treasury working on prospective/retrospective report. In his written statement, Treasury Deputy Assistant Secretary for Tax, Trade, and Tariff Policy Skud noted that that the chief obstacle to ensuring collection of retrospectively assessed AD/CV duties is the absence of adequate security, such as cash deposits or bonds. Treasury is working with CBP and the Commerce Department prepare a Congressionally-requested report on the relative advantages and disadvantages of prospective and retrospective AD/CV duty systems.

CBP Remains Committed to ACE

The Commissioner stated that CBP is committed to the Automated Commercial Environment (ACE), which will deliver an account-based, electronic processing system for imports. According to the Commissioner, work on rail and sea manifest processing continues; work on post summary correction functionality has begun; and a request for proposal for EDI Imaging that will allow for the electronic transfer of paper images has been issued. The Commissioner confirmed that in FY 2011, ACE will transition to a steady-state operations and maintenance phase. Further development will be deferred while the remaining business and technical requirements are clearly defined.

(See ITT”s Online Archives or 03/05/10 news, 10030505, for BP summary of CBP’s FY 2011 budget request which indicates that ACE will be moving into an operation and maintenance steady state.)

Commissioner Bersin, in response to questions from the Subcommittee regarding his assessment of where CBP stands on ACE, attributed ACE’s problems to, among other things, a lack of defined requirements and functionalities, but noted that CBP is working on addressing these issues and on consulting with the trade to help determine why its use of ACE has been less than expected.

Some ITDS Functions are Partly Operational, Important Decisions Still Pending

According to Deputy Assistant Secretary Skud, delays in the ACE schedule have delayed delivery and planning of ITDS functions and that while CBP management has recently re-focused its attention on ITDS, ACE delays have made it difficult for ITDS agencies to plan for their future operations with ACE and to plan investments in their own IT systems intended to work with ACE.

However, the effects of ACE delays on the ITDS program can be mitigated. Working with CBP staff, the ITDS Board of Directors has recommended three concrete measures to advance the ITDS program.

1. CBP can immediately add data elements required by other agencies to the major import reporting messages (manifest, entry, entry summary) which would allow the immediate collection of ITDS data for other agencies through the Automated Broker Interface and then make that data available to agencies through the ACE Data Warehouse.

2. CBP can develop the capability to accept transmission of “imaged” forms (such as .pdf files) which may currently only be submitted on paper. Such imaged forms could be transmitted as “attachments” to filings with CBP and then forwarded to the relevant agencies.

3. CBP can complete its plans for ITDS and make decisions related to the technical interoperability with other agencies’ systems, in order to allow other agencies to continue with their plans for using ITDS and investing in automated systems to work with ACE/ITDS.

(See ITT’s Online Archives or 11/06/09 news,09110605, for BP summary of a Treasury report, which covers the recommendation to have basic ITDS functions implemented using ABI.)

CBP and Treasury Promise Greater Consultation with Congress and Trade

In response to concerns expressed by Subcommittee members about CBP and Treasury’s lack of consultation with the trade, Congress, and other government agencies, both the CBP Commissioner and Treasury Deputy Secretary promised to do a better job of consulting on major trade issues.

(See ITT’s Online Archives or 05/14/10 news, 10051429, for BP summary of hearing announcement.)

Hearing testimony, advisory, etc. available for http://waysandmeans.house.gov/Hearings/hearingDetails.aspx?NewsID=11181