CBP Automation Budget Issues Limiting New Development, Swanson Says

CBP's planned addition of partner government agency data functionality for foreign-trade zones (see 1702150037) has moved to the “back burner,” due to automation funding questions, said Jim Swanson, director of the Cargo and Security Controls Division, for Cargo and Conveyance Security, CBP Office of Field Operations. CBP has “reduced funds for programming this year and as a result we are working with retained funds and other funding, but we have our ongoing maintenance needs to continue to work, plus continuing changes that have to be programmed, and that comes out of the base budget for automation,” he said. “So we are not looking at taking on a lot of new causes this year unless they come with a funding package associated with it.” Swanson spoke Feb. 10 during a National Association of Foreign-Trade Zones virtual conference.

CBP hasn't “taken the PGA data off the table yet,” Swanson said. “We've been working with the PGAs to identify some key points here. We haven't quite gotten to that level of detail yet, mainly because we don't have funding for it and no work is ongoing, but we are still having those discussions. We have asked the PGAs to come forward, and in some cases they have and identified when and where they would need those needs, and when they have, we will then broker the appropriate meetings between NAFTZ and the PGAs to kind of work through the process,” he said. The problem now is the “funding issue and we're hoping to work through that over the next year or so.” CBP also would like to get closer to an “automated risk assessment program” for FTZs by using “minor lift automation” that can be tied to the agency's analytic tools, he said.

The long-discussed changes to FTZ regulations in 19 CFR 146 (see 1810040019) have been slowed by higher priority regulatory work in recent years, Swanson said. “The bandwidth to get those 146 regulations worked on just wasn't there,” he said. “I've talked to our regulations folks,” and once the new administration finishes its review of open regulations and sets its agenda, “we are working to then get that package moving again.” The language is “largely drafted,” but a legal review and economic analysis are still needed, he said.

CBP is also working to clear guidance around the use of FTZs for goods stopped under a withhold release order while an importer works to prove forced labor was not involved (see 2102100013), Swanson said. The WRO process has “morphed a bit,” but “I don't see any issue right now because there is that phase where the goods may or may not enter into commerce while they are being detained,” he said. The thought is that the goods would be held in “normal status,” but the zone would need to make sure those goods aren't releasable and “no entry could be filed against them,” he said. If a WRO is determined to apply to the goods, “the status would have to flip over to 'zone restricted' so that we could show they were properly being accounted for,” he said.