Customs Reauthorization Summary: Customs Broker Importer ID Program, Trade Alerts, Educational Seminars for CBP Officers

The Trade Facilitation and Trade Enforcement Act of 2015 (here), signed into law by President Barack Obama on Feb. 24, establishes new requirements for customs brokers to verify the identities of their importer clients, as well as a new importer of record database. It also provides for CBP's National Targeting Center to issue "Trade Alerts" directing CBP port personnel to inspect high-risk merchandise, and directs CBP to accept private sector training on classification, appraisement, and other enforcement issues.

(NOTE: This is part one of a four part summary of customs reauthorization. International Trade Today will publish summaries of other parts of the new law in the coming days.)

Deadlines for Implementation of ACE and ITDS (Secs. 106 and 107)

CBP will have to submit a report to Congress by Dec. 31, detailing CBP’s “incorporation of all core trade processing capabilities” into the Automated Commercial Environment by Sept. 30, as well as its remaining priorities for ACE.

The legislation also requires that the Department of Homeland Security work with each agency involved in the International Trade Data System to ensure that PGAs submit to CBP all their admissibility criteria and data element requirements by June 30. By Dec. 31, DHS and ITDS agencies must ensure PGAs use ITDS as the primary means of receiving import and export data.

Educational Seminars for CBP Officers (Sec. 104)

The law requires CBP to provide educational seminars to its officers on topics including classification and appraisement of imports -- with a focus on physical inspection of merchandise and document review -- and enforcement of intellectual property rights, duties on textiles and antidumping and countervailing duties. CBP may develop the seminars themselves. The private sector will also be allowed to apply to give seminars to CBP officers, with priority given to domestic companies that have requested antidumping and countervailing duties. CBP will publish a Federal Register notice with procedures for applying and selecting private sector entities for seminars.

Trade Alerts Issued to Ports Directing Further Exams (Sec. 111)

CBP’s National Targeting Center would be tasked with issuing “Trade Alerts,” which would direct further inspection or physical examination or testing of merchandise by the port personnel if certain risk-assessment thresholds are met. The port director would have discretion on whether or not to carry out the trade alert, though refusals would have to be reported to Congress annually.

Importer of Record Program and Risk Assessment Program (Sec. 114, 115)

CBP must establish a new program by mid-August to assign and maintain importer of record numbers. The program would include a process to assign importer of record numbers, a centralized, up-to-date database of importers of record, and measures to ensure that duplicate importer of record numbers are not issued. CBP will have to develop criteria that importers must meet to obtain an importer of record number, including:

• Sufficient information to allow CBP to verify the existence of the importer
• Sufficient information to allow CBP to identify linkages between importers that have requested or been assigned importers of record
• Sufficient information to allow CBP to identify changes in address and corporate structure of importers.

Bonds based on risk assessments. Also by mid-August, CBP must develop a program to adjust bond amounts for importers based on risk assessments. Customs-Trade Partnership Against Terrorism Tier 2 and 3 participants will be exempt.

Customs Broker Importer ID Requirements (Sec. 116)

The new law requires CBP to issue regulations setting minimum standards for customs brokers to collect and maintain information on their importer clients, including non-resident importers. At a minimum, the regulations will:

• Info Collection. Identify the information the importer is required to submit to the broker and that the broker is required to collect in order to verify the identity of the importer;
• Verification. Identify procedures the broker must follow to verify the authenticity of the information; and
• Recordkeeping. Require the broker to maintain records of the information collected to verify the identity of the importer.

Brokers that fail to collect the information will be subject to a $10,000 penalty under 19 USC 1641, and license suspension or revocation. The National Customs Brokers & Forwarders Association of America criticized the "heavy handed" approach in a letter sent to Congress in June (see 1506220022).

Other Provisions

Improvement of trusted trader programs (Sec. 101). The law requires that CBP work to improve its trusted trader programs, including the Customs-Trade Partnership Against Terrorism, and ensure they are providing “commercially significant and measurable trade benefits,” including preclearance. It mandates an annual report to Congress on CBP partnership programs, with the first due in August.

GAO report on trade enforcement (Sec. 102). The Government Accountability Office must submit a report within one year on CBP’s trade enforcement efforts, including use of resources and efforts to address undervaluation, transshipment, legitimacy of entities making entry, protection of revenue and fraud prevention and detection.

CBP reports on trade enforcement (Secs. 112, 113). CBP would be tasked with reporting to Congress every two years on its enforcement efforts. Also, DHS and the Treasury Department will have to submit three reports at the end of 2016, 2017 and 2018, respectively, on security and revenue measures on merchandise transported in-bond.

Priorities and performance standards (Sec. 103). CBP is required to develop priorities and performance standards to measure achievement of customs modernization, trade facilitation and trade enforcement, including ACE, the Centers of Excellence and Expertise, the issuance of rulings, and collection of AD/CV duties.

Strategic plan (Sec. 105). Every two years, CBP and Immigration and Customs Enforcement will have to submit to the appropriate congressional committees a joint strategic plan, focused on efforts to improve trade enforcement and trade facilitation, interagency cooperation, training, efforts to work with the World Customs Organization, benchmarks for optimizing staffing and wait times at ports of entry, and any legislative recommendations.

Mutual Recognition Arrangements (Sec. 108). DHS will have to consult with congressional committees on Mutual Recognition Arrangements of supply chain security programs and revenue collection functions, both before beginning negotiations and after entering into an agreement.

COAC (Sec. 109). The CBP advisory committee on commercial operations is legally established, with 20 members serving for a maximum of two consecutive three-year terms. The committee’s full legal name is the Commercial Customs Operations Advisory Committee.

CEEs (Sec. 110). The new law also legally establishes the Centers of Excellence and Expertise, requiring a report from CBP to Congress on the CEEs by Dec. 31.

Priority trade issues (Sec. 117). CBP will have to establish certain priority trade issues, including agriculture, AD/CVD, import safety, intellectual property rights, revenue, textiles and apparel and trade agreements. CBP may modify its list of priority trade issues.

Title II - Import Safety

The new law codifies into law the interagency Import Safety Working Group established by executive order in 2007 (see 07072020). The group is tasked with developing by the end of 2016 a Joint Import Safety Rapid Response Plan for coordinating a joint response for when cargo destined for the U.S. has been identified as posing a threat to the health or safety of consumers (Sec. 202). DHS will lead periodic exercises, involving other agencies and the private sector, to evaluate the plan. CBP must also ensure its port personnel have adequate training to address import safety threats.