COAC Subcommittee Suggests Broad Changes to CBP Enforcement Processes

The Commercial Customs Operations Advisory Committee (COAC) Intelligent Enforcement Subcommittee offered some broad enforcement process improvement suggestions as part of a white paper on CBP's “intelligent enforcement modernization” efforts. CBP posted the document ahead of the next COAC meeting Oct. 7. Among the “solutions” mentioned are changes to the Fines, Penalties and Forfeiture (FPF) branches and revisions to mitigation guidelines.

CBP is undertaking a review of its mitigation guidelines and it should involve industry, the subcommittee said. “We recognize that CBP has been reviewing the mitigation guidelines internally and believe a discussion with the COAC about improvements to the guidelines should also be considered,” it said. The current guidelines lack clarity when other agencies are involved, “especially failure to redeliver claims that seem to conflict with the FDA's own mitigation guidelines for first time violations,” it said. “These liquidated damage claims are for three times the value of the merchandise and can be punitive to small businesses because CBP rarely allows mitigation as outlined within the FDA mitigation guidelines that allows claims to be reduced to 10% of the value,” it said.

The subcommittee said the FPF “decision-making and resolution process often lacks uniformity regarding time frames, rationale for decisions and consequence delivery.” It also is often unclear whether trusted trader status is considered, it said. CBP ought to “consider realigning its FPF offices to create a trusted trader center, office or branch to address cases involving such partners,” it said. It could also “consider enhanced mitigation guidelines written” for members of the Customs-Trade Partnership Against Terrorism and Trusted Trader programs.

The subcommittee also suggested for the FPF offices that “a slight realignment on a more national level could enhance the enforcement process.” For example, an “informal matrix-like alignment” similar to the Centers of Excellence and Expertise would be a way to “share best practices and uniform processing of certain types of trade-related claims, e.g., liquidated damages, seizure, penalties, etc.,” it said.

The agency should also “consider adjusting the settlement process on a national level as it does for certain liquidated damages claims through Indianapolis, for other claims, e.g., seizures and penalties, instead of just handling differently from one jurisdiction to the next,” it said. “We recognize this process would need to consider that seizures are adjudicated at local district courts.” That change would also for a more “uniform” resolution process, it said.

The petition and appeal process could also use an update, it said. “CBP should provide better clarification to petitioners as to the jurisdictional authority of its FPF versus Headquarters offices to adjudicate its claims,” the subcommittee said. “By clarifying CBP’s jurisdiction and the office that will [be] addressing each claim this will enable petitioners to better assess whether they wish to proceed with a claim.” CBP might consider modeling its processes after more straightforward processes used by other federal agencies, such as the Transportation Security Administration, it said.

CBP should also provide more information around enforcement rationales, it said. “Enforcement decisions, particularly at the local level, are brief and often lack the meaningful detail that would enable petitioners to enhance processes to avoid future claims by adopting more compliant behaviors,” it said. The agency should also improve its electronic exchange of CBP notices and decisions. “Ideally, information and documentation should be exchanged electronically via CBP’s enforcement systems with the trade as appropriate through the ACE portal,” it said.