Electronic Cargo Security Devices Offer Benefits to Regulators, Should Be Treated as 'IITs,' Expeditors Says in Customs Framework Comments

The widespread use of Electronic Cargo Security Devices (eCSDs) would create many new benefits to both private industry and the border enforcement agencies, logistics company Expeditors International said in April 11 comments in CBP's docket on creating a 21st Century Customs Framework. "Trade interests and Customs interests both would be well served if the same trade facilitation benefits currently given to CSDs were afforded to eCSDs," Expeditors said. Such devices would be one way to improve trade security within the e-commerce supply chain, the company said.

CBP should look at its approach to eCSDs "both from a regulatory perspective and operationally," the company said. Expeditors notes that CBP should consider eCSDs that are currently available and devices potentially available in the future "that may offer more robust security through linkages to as-yet-undeveloped public/private information systems." For both categories "Expeditors recommends a dual-track regulatory and operational approach to revise existing Customs regulations to streamline the Customs treatment of Current State Devices as Instruments of International Traffic ('IIT')," it said. "In addition, we recommend proceeding apace on multiple fronts to explore the feasibility of Future State Devices and their supporting IT infrastructure, including, for example, by authorizing and conducting a pilot program for such devices."

Carriers and logistics companies would like to see "streamlined Customs treatment of embedded eCSDs in order to enhance cargo security," Expeditors said. The eCSDs -- "like intermodal shipping containers -- are often owned by carriers or logistics providers rather than by shippers," the company said. "This ownership model permits devices to be used on multiple shipments for different customers, thereby achieving economies of scale that would be beyond the reach of a single shipper attempting to manage its own pool of devices." The company also advised CBP to work cautiously with technologies such as blockchain to verify cybersecurity, it said. Expeditors recommended that CBP take a close look at trade processing procedures in Canada and the Netherlands, "both of which in our view improve the overall experience for critical actors within the supply chain."

Comments from the National Customs Brokers & Forwarders Association of America highlighted a remark from a surety that found that "when an entry is not handled by a customs broker, a claim against the surety relating to that entry is 10 times more likely to occur." That is why the NCBFAA disagrees "with comments suggesting a ‘progressive filing approach’ where data is provided directly by supply chain participants," it said. Any changes CBP makes "should align with the definition of customs business" and "respect and preserve the CBP/customs broker relationship," the NCBFAA said.

CBP's enforcement role in e-commerce requires access to data, the NCBFAA said. "Only sufficient data will allow [Section] 321 imports to undergo meaningful scrutiny," the trade group said. "The manifest, which is the vehicle now used, lacks the data needed for targeting, [Partner Government Agency (PGA)] flagging, ADD/CVD warnings and Census. CBP must require more data. The proposed Entry Type 86 may be sufficient, as long as one of the data fields identifies a responsible party." The agency is in the process of rolling out the new Entry Type 86 for low value shipments (see 1903210039). "CBP cannot even begin to manage risk or any other aspect of de minimis trade if it can’t identify how much is coming in from where," it said.

The Committee to Support U.S. Trade Laws called for some revisions to CBP's e-allegations process for reporting AD/CV duty evasion and raised concern over allowing for some CBP Form 5106 data to be optional, a point also raised by others (see 1904110042). CBP should also revisit its position that manifest information from air, truck and rail shipments aren't subject to the same public disclosure requirements as ocean shipments, CSUSTL said. "CBP should evaluate and describe what practical
elements would be required to facilitate the public release of information from truck and rail manifests."

The Electronic Privacy Information Center, a public interest group, raised privacy concerns over the agency's use of personally identifiable information in cargo screening. "Although CBP claims that risk scores are only used on cargo and not individuals," the impact of cargo holds or screening affects individuals, EPIC said. As a result, "it is imperative that the methods -- now mostly secret -- and factors used in making targeting assessments are made public, and that the system is governed by ethics and accountability." The agency should also adopt the "Universal Guidelines for Artificial Intelligence," the group said.

There's a chance for better international cooperation for CBP and its counterparts in Mexico and Canada, the Association of American Railroads said. "Once data sharing procedures between those agencies are fully in place, the agencies should be able to collect all necessary information about a North American rail shipment at origin," it said. "Railroads, and other transportation providers, should no longer be put in the position of collecting information that is already available to customs agencies to transmit to another agency."

CBP should use the Trade Facilitation Agreement as an opportunity to "review and implement changes to policy and regulation, as well as to existing trade laws to enhance the competitiveness of America’s supply chain," Livingston International said in its comments. "The post summary correction functionality would benefit from restructuring, removing complicated processes that are adverse to current policy," the company said. U.S. Steel said in its comments that CBP should begin using new technologies to test the origins of steel "all the way back to the country of melting and pouring of the crude steel," and apply its blockchain tests to steel to better trace transactions to detect possible diversions to third countries.