Overview of COAC Meeting: Next Phase of ISF Enforcement, ACE Priorities, Etc.

On August 4, 2010, the Departmental Advisory Committee on Commercial Operations of U.S. Customs and Border Protection and Related Homeland Security Functions (COAC) met in Detroit, MI to discuss a variety of trade issues.

Overview of the discussions include:

CBP Is Moving into Third Quarter of ISF Enforcement

A CBP official told COAC that CBP is moving into the third quarter of Importer Security Filing (ISF) enforcement and continues to focus on non-filing of ISFs.

Other 10+2 Developments

ABI data query, SME portal, data warehouse. A CBP official also discussed various 10+2 developments, including (i) the availability of an ABI data query; (ii) CBP plans to finalize the ISF portal for small- and medium-sized enterprises; and (iii) CBP’s continued work on a data warehouse.

Compliance, duplicate ISFs. According to a CBP official, although CBP is very pleased with the high ISF compliance rates, CBP still has concerns about duplicate ISFs, which are still a primary reason for rejects.

Rewards for compliant ISF filers. During the meeting, COAC also adopted for submission to CBP its ISF Subcommittee recommendations for rewarding compliant ISF filers.

e-Manifest: Ocean and Rail on Track for Pilot, Next Priority is ITDS Projects

CBP officials stated that CBP has revised its priorities for completing various aspects of the Automated Commercial Environment (ACE). CBP continues to work on e-Manifest: Ocean and Rail (M1) and a pilot of M1 is expected in early 2011; however, certain other priorities have changed. CBP states that it plans to focus its attention on “low hanging fruit” involving the International Trade Data System (ITDS) such as interoperability, a data warehouse, and imaging, rather than on e-Manifest: Air (M 2.1).

COAC Continues Review of CBP Draft Bond Directive, Asks for Uniformity on STBs

At the meeting, certain COAC members expressed concern with various aspects of CBP’s draft bond directive rewrite and COAC’s Bond Subcommittee will continue its review. (The Subcommittee has been reviewing CBP’s draft for a number of weeks.)

One COAC member asked that CBP help resolve a lack of uniformity resulting from a DHS document on processing single transaction bonds (STBs). According to the COAC member, different ports have issued conflicting bulletins on STBs.

CBP Plans Pilot of IPR Voluntary Disclosure Project

A CBP official states that CBP has resolved the issues that had been preventing it from moving forward with an intellectual property rights (IPR) voluntary disclosure program and now plans to conduct a one-year pilot of the program. During the discussion of IPR issues, one COAC member expressed concern with how voluntary disclosures involving gray market importations would be handled.

CBP Could Provide Second Opportunity to Comment on Proposed Rules

Commissioner Bersin suggested that if, in response to a round of comments, there are significant changes to a CBP proposed regulation, CBP could make a judgment to open it up for another round of comments.

CBP Commissioner Says CBP Plans a Robust Management by Account Effort

During introductory remarks, CBP Commissioner Bersin discussed his vision for CBP and trade cooperation in achieving trade facilitation and security, noting that the trade and CBP should hold each other accountable for results.

Commissioner Bersin also discussed CBP plans for a robust management by account effort, ACE and product safety efforts, increased attention on intellectual property rights enforcement and import safety, etc.

CBP Revises its Consultation Process for Management by Account

CBP discussed plans for its management by account program and is in the process of developing plans to achieve those plans. In order to speed progress on this issue, CBP decided to revise is approach.

CBP has set up a special working group consisting of 20 people from all parts of CBP working for 90 days to identify 5-7 high priority projects that could be agreed upon. According to CBP, this process also includes consultation with the trade community.

Commissioner Wants to Invigorate, Expand Trusted Shipper Programs

The Commissioner stated that trusted shippers are absolutely essential to enhancing national security and that CBP and the trade need to move beyond rhetoric about benefits versus costs to a discussion on how to reinvigorate these programs and expand their membership.

Commissioner Outlines Seven Value Propositions

The Commissioner also shared with COAC his seven value “propositions,” including that securing flows of people, passengers, cargo, and goods is key to DHS’ success; implementation of a northern border strategy and littoral maritime strategy is integral to safety and security; and partnership, technology, infrastructure, information and intelligence are keys to CBP’s success.

DHS Expects to Soon Share National Supply Chain Security Strategy with COAC

A DHS official told COAC that DHS and other members of an inter-agency working group continue to work on developing a final version of the 2010 national supply chain security strategy. According to DHS, the name of the strategy has been changed to “The National Strategies to Secure the Flow of Commerce in the Global Supply Chain.”

On July 15, 2010, COAC submitted its recommendations for the strategy to CBP. According to the DHS official, DHS hopes to be able to share a draft report with COAC by mid-August 2010.

DHS officials also stated that they have completed work on part of the strategy, the protocols for the resumption of business (trade), and expects to give them to COAC for review in about a week.

CBP Continues to Work on Issue of IIT Imported with Residue

During the meeting, a COAC member asked CBP for an update on the status of CBP’s ruling regarding instruments of international traffic (IIT) imported into the U.S. with residue. CBP officials stated that CBP is still trying to resolve issues related to how residue is measured and valued and that enforcement continues to be delayed until further notice.

CBP Asks for COAC Input on U.S. Registered Agents and C-TPAT 3PL Bills

CBP has asked for COAC input on:

U.S. registered agents bill - CBP asked COAC to assess the impact of H.R. 4678, the Foreign Manufacturers Legal Accountability Act of 2010.

Non-asset 3PL C-TPAT bill - CBP asked COAC to look at a letter from the Transportation Intermediaries Association (TIA) regarding H.R. 5619, a bill to allow non-asset based 3PLs to join the Customs-Trade Partnership Against Terrorism (C-TPAT) and a letter from Representative Owens asking his House colleagues to cosponsor H.R. 5619.

CBP Still Working on its Five-Year IPR Strategy

At the meeting, CBP also discussed its five-year IPR strategy, noting that CBP is still working on its development. CBP’s five-year strategy will be submitted to Congress and CBP has previously stated that it will be Congress’ decision if it will be made available to the public.

However, CBP and Immigration and Customs Enforcement (ICE) are also working on a “one DHS” IPR strategy which will be made available to the public.

Wood Packaging Material Continues to Concern CBP

During a discussion of agricultural issues, a CBP official expressed continued concern about pests found in wood packaging material (WPM). CBP is going to explore how it can get information (e.g., an emergency bulletin) out to ports and other stakeholders when an agricultural pest situation exists.