MRAs Present Opportunities, New Complexities Between Customs Regimes

CANCUN, Mexico -- Despite the work it takes to get there, signed Mutual Recognition Arrangements really mark the beginning of the relationship between customs administrations, said Elizabeth Schmelzinger, Customs-Trade Partnership Against Terrorism Program Director at CBP, while speaking at the World Customs Organization Authorized Economic Operator conference on May 13. An MRA "must be carried out with confidence and precision be each of the AEO program," she said. "Consistent self-evaluation and mutual evaluation to ensure that we are innovating and that we adhere to the tenets of the security programs of the mutual recognition that we have agreed to."

Although regionally focused MRAs are increasingly popular and are "a good concept," much work and some creativity is still necessary, said Schmelzinger. The MRAs between the U.S., Mexico and Canada provide a good framework, but all involved in regional agreements should understand "the execution" can never go beyond the "sovereignty of the particular country and their ability to make changes, to execute their laws, to change their laws if they need to," she said. Maria Elena Sierra, Central Administrator of Certification and International Affairs, Mexico, also said that the implementation of the MRA with the U.S. is a more difficult undertaking than getting to the initial agreement.

Schmelzinger agreed with others at the conference that lack of a unique identifying standard is a major barrier to AEO expansion (see 1605120004) and remains a problem between the U.S. and Mexico. Without a "mechanism" to transcend each country's internal identifiers, it's often tough to keep track of "one trading partner from one country to another in very practical terms," she said. The U.S. and Mexico also "don't have an IT system yet that we can execute the single vision of the companies that we see," she said. "The vision is there," but "struggle with the execution," she said.

The term "harmonization" can sometimes be misleading within MRA discussions, said Schmelzinger. It doesn't mean "the same," but provides for an "understanding" for each other's programs and what their requirements are, she said. From there, the countries can see "where there's alignment, so that we can reduce duplication, and then understand where the differences are" and "make room for that," she said. "There's an enormous amount of work that remains to achieve real global facilitation based on mutual recognition, but it is a worthy effort and one that really raises the bar and dialog."

An MRA creates a number of complex considerations between the members, said Schmelzinger. One such complexity is the development of protocols for when there's a serious security breach by a company, she said. Also, it's important to look at how a new MRA affects existing MRAs with other countries, she said. It's important not to "oversimplify the sovereignty of each of the countries to make an adjustment to their internal AEO programs when necessary," she said. While such changes could flow through to other MRA partners, transparency and trust are very important when explaining the need for changes, she said. Information sharing can also be a difficult issue, Schmelzinger said. Each country has its own privacy rules and while it's often useful to require certain company information, "we need to be cautious of the rights of those companies and be mindful that there's an impact," she said.