Expanding CBP Use of Advance Data for Enforcement Among Initial Concerns With Draft Customs Bill

Plans to update statutory language to allow for CBP to use advance cargo data "for any lawful purpose" is an early area of concern among trade groups that submitted comments to the office of Sen. Bill Cassidy, R-La., about a draft customs modernization bill (see 2111030039). That provision "is a significant amendment to the Trade Act of 2002 manifest requirements and will present a challenge regarding how the agency will merge and crosscheck data received from multiple parties," the Express Association of America told Cassidy, EAA Executive Director Michael Mullen said by email.

A summary of the draft from Cassidy's office said the bill authorizes "CBP to utilize advance data for any lawful purpose, including commercial enforcement," which "would allow CBP to share information with industry to accelerate the identification of [intellectual property rights] IPR violations and restrict those imports." The EAA said, "Congress should acknowledge that data sent early in the supply chain is raw and not necessarily accurate and the parties cannot be liable for discrepancies when it is used in trade enforcement matters."

Plans to share information around IPR violations "should be limited to pertinent data required to determine if the goods are in violation and should be shared with only those parties in a position to assist that determination, not with all parties involved in the transaction," the EAA said. Also helpful would be "a list of denied parties who have engaged repeatedly in violations of customs laws. The draft legislation would provide a list of companies that are denied from doing business with the U.S. Government due to mismanaging their contracts."

The National Customs Brokers & Forwarders Association of America said the expanded use of electronic information "can have grave implications for legitimate traders and affiliated parties unaware of the potential consequences particularly when a variety of third parties file such data." Instead, "we suggest the statute expand the use of advance electronic information such that it also be treated as part of the entry process filed by the same parties and carrying the same consequences, as other entry data under section 1484, yet short of requiring a formal entry. This will ensure the right data is submitted at the right time by the right parties."

The NCBFAA also would like to see Congress move the statutory language governing de minimis shipments from 19 USC 1321 to 19 USC 1484, the group said. Section 1321 "no longer offers the statutory framework" for the wide variety of participants in e-commerce trade, it said. Instead, "the NCBFAA proposes that the language for the $800 de-minimis exemption (as already is the case for all other imports over $800) recognize such imports as 'entries' of merchandise and address them under 19 U.S.C. 1484 providing for the entry of merchandise," it said. Such a change would "enable businesses regularly importing merchandise under the de-minimis exemption to become self-filers or alternatively enable couriers, carriers, platforms and the like employing licensed customs brokers and maintaining a corporate brokerage license, as well as customs brokerages to handle such transactions in a compliant manner."

The proposal would also require for a party providing advance information to "ensure it is true and correct to the 'best of the knowledge and belief of the party,'" the association said. This seems to create "a new standard of care potentially more rigorous than the responsible supervision and control standard currently applicable to customs broker," the NCBFAA said. The provision should instead make clear that an "agent or intermediary should only be restricted from providing such data on behalf of the importer if they have actual knowledge that the information is false or inaccurate."

The NCBFAA also provided comments submitted by The 21CCF Customs Modernization Trade Coalition, "which comprises high-level representatives from across the international trade industry." The coalition noted concerns about CBP's use of early data for enforcement purposes and the prospect of earlier release of goods in exchange for that early data doesn't really present a clear commercial benefit. "We urge your office to rewrite the discussion draft to provide real, tangible commercial benefits to trade," the group said. "These benefits could include simplified entry summary, moving to a prospective AD/CVD duty system to better align with the rest of the world and significantly reduce the burden placed on CBP by the current AD/CVD regime, paperwork reduction on forms and documents that the trade creates exclusively for government regulation and compliance, automation, port consistency, and ease of processes."

The coalition also complained dialogue with CBP on these items has been insufficient since the last term of the Commercial Customs Operations Advisory Committee ended in June. "With the hiatus of that task force, all substantive, bi-directional engagement with the trade has come to a screeching halt," the group said. "We cannot go forward with any overarching legislative changes to the customs process without CBP and the trade community defining and agreeing on advancements that are mutually beneficial to the government and trading community."