CBP Section 321 Policies on Hold Until NAFTA de Minimis Talks Resolved

ATLANTA -- CBP is waiting for NAFTA negotiations to “mature” before making a final decision on how it will handle Section 321 shipments, Acting Commissioner Kevin McAleenan said during opening remarks at the East Coast Trade Symposium on Dec. 5. Though the agency had “hoped to articulate a clear path forward” at the conference, the agency has to “let that dialogue play out with our key partners in Canada and Mexico,” he said.

CBP has some “very strong ideas on how we want to move forward,” and will be ready “as soon as we see the direction” that NAFTA will take as it relates to de minimis, McAleenan said. The low value threshold has become a contentious issue in talks, with Canada resisting U.S. pressure to increase it above the country’s current $15 limit to a level closer to the U.S. $800 limit (see 1712010039).

As NAFTA negotiations proceed, operationally CBP is “gaining momentum, not losing speed” in its efforts to facilitate trade across the Canadian and Mexican borders, McAleenan said. CBP will continue to pursue "border-wide initiatives" with customs administrations in Canada and Mexico, including "better data exchanges, more operational collaboration, the exchange of officers at the border, and even co-location of facilities,” he said. “I can tell you the commitment’s there,” he said.

Domestically, CBP and its partner government agencies (PGAs) are working to firmly establish the Border Interagency Executive Committee’s role in ACE development, McAleenan said. The main topic of the last two BIEC meetings during the new administration has been how to provide a forum and prioritization mechanism “for both single window enhancements and single window coordination,” he said. CBP has completed a “decision memo” on the process for new post-core ACE enhancement, and believes it has a “model that can work” to give access to the PGAs and “pay for it in a transparent and consistent manner.”

The agency is also at work behind the scenes to implement an executive order issued in March on enhancing trade law enforcement (see 1704030033) That order gave CBP 90 days to come up with a plan for improving enforcement of customs laws, which CBP took as a chance to have its experts sit down and consider gaps in not only antidumping and countervailing duty collection, but also other enforcement processes like seizures and penalties, said Brenda Smith, executive assistant commissioner of CBP’s Office of International Trade.

The results of that exercise include the more aggressive use of single transaction bonds, increased attention to recovering money owed to the agency on bonds issued by sureties, and setting up a suspension and debarment office “that acts on especially egregious violations,” Smith said. Orders issued by that office, which prohibit entities from dealing with the government for a period of time, usually three years, are a “pretty big hammer” used “only in instances where it’s really warranted,” she said.

Suspension and debarment orders cover not only procurement, but also a “broad swath” of actions like obtaining student or Federal Housing Administration loans. “When those attach to an individual it can hurt, and that’s the idea,” she said. CBP recently released information on its suspension and debarment procedures (see 1709190037). CBP has also come up with a list of “resource gaps and legal gaps that need to be addressed in the longer term,” which CBP has been working on within the administration and with Congress, “so stay tuned,” Smith said.