Bipartisan Senate Trade Facilitation Discussion Draft Released

A bipartisan pair of senators fleshed out a trade facilitation framework released in early June (see 2406100015) with legislative text that authorizes spending to create a true single window and modernize ACE, as well as details of how duty drawback could change.

Sen. Bill Cassidy, R-La., and Sen. Catherine Cortez Masto, D-Nev., issued a summary of the text, and on drawback, it says: "This section addresses lengthy processing delays in the duty drawback export promotion program by allowing for an accelerated payment of duty drawbacks, which are refunds on duties on imported items that are re-exported, for all claims where a bond is filed securing repayment of 100% of the claimed refund and where the claimant has provided supporting documentation."

In the text, the bill directs CBP to promulgate regulations within 180 days on what information drawback filers would need to submit; it also says prior approval will not be required for substitution drawback.

The 32-page bill, which is called a discussion draft and could still change before formal introduction, includes all the ideas that were put forward in the earlier framework, including codifying the Border Interagency Executive Council (BIEC), requiring CBP to provide contact information for trade inquiries at ports and Centers of Excellence, and clarifying that clerical errors in submissions of export data "shall be exempt from penalties, so long as they are not part of a pattern of violative conduct."

The bill also requires CBP to promulgate regulations on advance export manifest data submissions, and requires that those regulations avoid redundancies between CBP and partner government agencies.

Cassidy's press release announcing the draft -- comments are due Aug. 30 -- references the example of imported wet pet food, which requires importers to submit 54 data elements to three different government agencies and notes that 21 of those elements are redundant. That example, first mentioned by CBP, was part of Senate Finance Committee ranking member Sen. Mike Crapo's opening remarks at a February 2023 hearing on customs modernization (see 2302160065). The Idaho Republican said in a brief hallway interview July 31 that while he hasn't read this draft, he thinks the Senate Finance Committee can address this issue in 2025, despite the time and attention the expiring tax cuts will need next year.

"The work we're going to be doing on taxes is not going to stop us from having plenty of time to focus on trade," he said.

Similarly, Cassidy said at the Capitol, "We consider this as part of an overall package of bills that improve competitiveness. I'd like to think that whatever we do will be a pro-growth agenda." He said whether Republicans win back the White House and Senate majority, and maintain the House majority, or whether there is divided government, "this could be part of a pro-growth agenda."

With regard to a true single window, the bill requires a pilot within two years of the bill's enactment that is a "minimum viable product" to facilitate imports and exports. This single window should include uniform cargo admissibility and release processes, entry summaries, advance import and export data, and should be developed with input from the trade community.

The bill explicitly says partner government agencies looking for clearance data or trying to conduct their own investigations should inspect data submitted through ACE "rather than as a post-release process when cargo may have already been delivered." It also said PGAs that want clearance data should publish all Harmonized Tariff Schedule headings and subheadings subject to its jurisdiction, "such that the agency is identified when any such heading or subheading of the Harmonized Tariff Schedule is submitted into the Automated Commercial Environment or a successor system."

In addition to the requirement on points of contact at Centers of Excellence and Expertise, the bills say that specialists at those centers are to provide guidance to importers on post-entry and clearance procedures impacted by alleged forced labor violations.

In June, a group of trade interests put forward their priorities for a trade facilitation bill (see 2306060057), which included a requirement for government agencies to respond to petitions or protests within a certain timeline, or issue customs rulings by a statutory deadline, and "if a decision is not produced within the timeline, it should be considered an affirmative response for the trade."

The bill doesn't go that far, but does say that CBP must review its deadlines for rulings, protests, petitions and other requests for advice within one year of passage, and "may, in consultation with members of the Commercial Customs Operations Advisory Committee, revise such regulations." If appropriate, the text says, CBP could "revise the deadline to be more expeditious."

It also mandates a Government Accountability Office study on the annual number of rulings and decisions, the average response time to petitions, protests and requests for advice, and how many of those responses were made before deadlines for those responses, and for those that went past a deadline, CBP's reasons for why they took longer. That report should include recommendations for Congress on improving CBP's response time.

“A trade system that’s simple and workable is a better trade system,” Cassidy said in the press release. “There must be better management of imports and exports. This can protect consumers and make it easier for American businesses to move goods around the world.”

Cortez Masto called U.S. customs laws outdated, in the release, and said she is working "to cut through red tape."