Trade Benefits Critical for Potential CPSC Certificate Trusted Trader Program, Say NCBFAA Leaders

A new Consumer Product Safety Commission trusted trader program could be in the offing as the agency moves cautiously toward electronic filing of certificates of compliance, said CPSC Commissioner Joseph Mohorovic during a March 19 meeting with the National Customs Brokers & Forwarders Association of America. However, any CPSC trusted trader program must overcome the familiar hurdle of providing enough benefits to importers, said NCBFAA representatives at the meeting.

The certificate trusted trader program could absolve importers from some filing responsibilities, suggested Mohorovic. More along the lines of CPSC’s potential “streamlined” approach of filing certificates one time in a registry and referencing the certificate with a number on entry documentation (see 1503120069), trusted traders could also be allowed to renew their certificates less frequently, alleviating some of the burden of entering certificate data in the registry, suggested NCBFAA regulatory agencies committee chair Roger Clarke.

Mohorovic, who has previously pushed for improvement of existing trusted trader programs at CPSC (see 1412030050), broached the trusted trader issue during a discussion with NCBFAA leadership on the role of the customs broker in the import process. The commissioner sought information on other trusted trader programs to inform development of any CPSC effort. Past experience shows the agency may be “disappointed in a way” when it reaches out to the trade community to find out what benefits it could provide, said association Vice President Amy Magnus. “We have struggled with this for a number of years,” she said.

Other trusted trader programs, like CBP’s Customs-Trade Partnership Against Terrorism, are not meeting expectations because any benefits have been difficult to ascertain, said NCBFAA representatives. Smaller and medium-sized importers have had trouble finding enough benefits to justify participation at all, said Clarke. The result is that, after an initial surge in C-TPAT participation, membership numbers have remained constant for years, said regulatory agencies committee co-chair Mike Lahar.

The “crux of the issue” is that joining trusted trader programs can be costly, but often times the benefits are difficult to measure, said Magnus. “We tell them to go through this rigorous process which is costly for them internally, and then we have a difficult time assisting our clients in articulating exactly what the benefit is because it’s not measurable,” she said. The benefit of fewer cargo exams for C-TPAT members, for example, is difficult to measure because it’s hard to know how many cargo exams would have occurred in the absence of C-TPAT membership or at a lower tier of the program. CBP has not helped its own cause in that regard, said Magnus. The agency presumably has data on cargo exams that it could provide to the trade community, but so far the data has not been forthcoming, she said.

Throughout the meeting at NCBFAA headquarters in Washington, D.C., Magnus and Clarke emphasized that the trade industry group’s top priority related to CPSC certificates remains making sure the importer with a financial interest in the goods, and not the broker, is responsible for compliance with product safety requirements. The broker is generally dealing in documentation, and doesn't have a view to the products themselves in order to verify compliance, they said. Magnus said language in CPSC’s May 2013 proposed rule on certificates of compliance was “too vague for comfort” (see 13051018), echoing concerns NCBFAA has voiced since its initial comments on the proposal (see 13073014).

NCBFAA representatives praised CPSC’s decision to pilot the streamlined filing approach, including a certificate registry and the use of reference numbers on entry documentation. "We were very pleased at the webinar that CPSC has taken their path of a registry, where the certificates could be uploaded ahead of time, where we in turn wouldn’t have this vast amount of data to put in, which is very time consuming and very costly," said Clarke. The agency did a good job of identifying issues that are important to the importing community, including how importers can identify CPSC-regulated products given the relative lack of specificity of HTS numbers, said Magnus.

CPSC should work to further its streamlined approach so that certificates are filed by the party that is in the best position to know whether to products are compliant -- such as the testing lab -- and then any redundant data entry should be eliminated, said Magnus. “If ever fingers touch a keyboard, the vision for all of us should be, let us capture that data so that it is entered at the source, by the person who knows the most, and that data then flows through the supply chain," she said.

CPSC will continue to exercise caution as it develops any new filing requirements, said Mohorovic. Whether to require electronic filing of certificates at entry at all remains up for discussion by CPSC commissioners, and the pilot will inform whether it moves forward with the entry filing approach, he said. CPSC isn't “throwing caution to the wind,” said Mohorovic. "We recognize in putting out a draft that was somewhat less informed by the trade community, that it’s really possible to get this really wrong. And fortunately the notice and comment period really brought that to the commission’s attention."