CBP Considering Trusted Trader Benefits for E-Commerce Compliance

RANCHO MIRAGE, Calif. -- CBP is considering offering trusted trader benefits to those in the e-commerce world as a way to improve compliance, said John Leonard, executive director-trade policy and programs at CBP, during a May 2 panel discussion at the National Customs Brokers & Forwarders Association of America's annual conference. The hope is to "incentivize all these new actors in this space to improve the platforms and marketplaces, etc., to be more compliant," he said. "Part of that could involve the Trusted Trader program" and the Customs-Trade Partnership Against Terrorism program, he said. CBP "is looking at this very closely."

The U.S. successfully rolled back some pieces of a World Customs Organization policy resolution that was released last year (see 1712080035) in an effort to develop a framework, Leonard said. That draft caused a lot of "consternation" in the U.S. because the release was very "sudden" with only an "ad hoc and informal" review process, he said. Several issues seem a bit "too far reaching" and CBP made some progress last month to "scale the document back" and make it more realistic," he said. Now, there's a two-page document with 15 standards that the WCO Policy Council will consider in June, Leonard said.

CBP has yet to officially announce its plans for Section 321 entry policies due to the ongoing NAFTA negotiations, Leonard said. The agency hopes to offer details soon and "we fully expect a vibrant role for the custom house broker," Leonard said. CBP is expected to allow for multiple options for filing Section 321 entries, including by manifest and in the Automated Broker Interface (see 1802130035).

CBP is set to lay out in a document to lawmakers some new statutory authorities that would help the agency oversee e-commerce, Leonard said. CBP said it would provide Sen. Ron Wyden, D-Ore., by May 4 with some potential legislative changes that would help the agency (see 1803060021). With help from industry, "we've got some really good policy legal asks that we're going to go to the Hill on, on areas that we can better regulate this space, so we will be sharing that with you as soon as the Hill takes a look at it and provide their guidance," he said.

The agency will need to act quickly on an e-commerce policy "because it's already overtaking us," Jim Swanson, CBP director-cargo and conveyance security and controls, said. From an enforcement perspective, it means CBP is close to being "overwhelmed" because it's still based on the existing processes, he said. CBP needs "better information" and is now looking at how to modify "some of our customs systems" to "create an entry type similar to what we do for the manifest side," in part to "leverage the ability to collect the Partner Government Agency information," he said.

Enforcement efforts are now focused on illegally split shipments meant to avoid customs entry and undervaluation issues, Swanson said. "We need to enable our ports to be able to do their job," Swanson said. One issue happening mostly at northern ports has to do with an exemption to e-manifest for shipments "solely comprised of 321," he said. "We are working actively to remove that exemption." CBP is looking at using a "slightly shortened" cargo release set in ACE, "more in line with what we collect in the manifest side," he said. CBP may also include the whole PGA data set and "all its associated message sets, back and forth, and processes," because those agencies mostly "don't differentiate based on value."

The 321 exemption continues to be a concern with customs brokers, said Amy Magnus, director-customs affairs and compliance at A.N. Deringer. "I truly believe that they need more information to enforce for compliance issues like" intellectual property rights, forced labor and antidumping and countervailing duties, she said. The need for more information is ever more apparent with new tariffs on solar cells, washing machines, steel and aluminum, and the potential for new tariffs on a wide range of goods from China, she said. "It's almost like it would incentivize somebody to push their goods through a lower value shipment than have to do with all of these additional data requirements and also the additional duty that may be levied," Magnus said.

While much of the consideration on this issue remains focused on small items, the de minimis level of $800 allows for bigger items, too, such as washing machines, Vince Iacopella of Alba Wheels Up said. There are some liability issues that are also seemingly left unclear by the Section 321 policies, given the lack of buyer and seller information involved, he said. There should still be a role for brokers to play after CBP implements a new Section 321 policy, Iacopella said. "If customs brokers come out of this process with a unified process that they can plug into, and the data set is relatively the same for all parties," that should be considered a "win for the industry," he said.