Trade Sees Cassidy Draft Customs Facilitation Bill as Beneficial

Trade associations are generally pleased with the trade facilitation discussion draft issued in the Senate last week (see 2407310037), though they all noted that moving to a true one-U.S.-government data submission and release regime requires money, which may not follow, even if the bill becomes law.

National Customs Brokers & Forwarders Association of America general and customs counsel Lenny Feldman said, "I think the trade has a lot to be happy about and optimistic about," and said the proposal is really "a welcome complement to the enforcement- oriented provisions that we've seen thus far out of 21st Century Customs Framework."

Feldman said the senators' staffs clearly listened regarding traders' pain points with data requests from partner government agencies that overlap or even conflict with CBP requests. He said the NCBFAA shared the wet pet food example that has been pointed to repeatedly on the Hill as an example of the problem of redundancy.

"Seeing that concept embraced throughout the discussion draft is a very positive sign, and I think it shows the lawmakers are listening to the trade community," he said in a telephone interview.

Express Association of America Executive Director Mike Mullen said how much a law like this one would change the experience of importing and exporting "would totally depend on Congress’s willingness to fund" a true single window. He said CBP's concept for ACE 2.0 is such a true single window, but DHS has not been willing to add funding to ACE deployment past current levels, and "that's not going to be sufficient."

This proposal does authorize funding for ACE 2.0, but appropriators would still need to pass a bill with that funding.

American Association of Exporters and Importers CEO Eugene Laney predicted that there would be money for ACE, but said that if government agencies don't also get additional money -- and he doesn't think they will -- they may not have the staff to sit down with ACE managers and harmonize data requests.

Mullen noted that the bill would allow parties most likely to have direct knowledge of the information requested by CBP to submit that information, and he said accepting information for those others than carriers and brokers "would really be a step forward." This kind of paradigm shift is an issue that CBP has focused on in 21CCF, and Mullen said that language in the bill "is really focused."

Feldman said one measure for how big an impact such a law might have is looking at where the language says "may" or "should" and where it says "shall".

"A lot of it is aspirational," he said, and how much this solves trade facilitation problems will be determined by the extent to which lawmakers "want to demand versus suggest."

One area where the language is prescriptive is for duty drawback. "One of the things that struck me is that prior approval is not required for substitution drawback," Feldman said. "I think that’s an antiquated process. I feel it looks like they put some thoughtful language on that. It will move the needle in the certainty and timeliness for drawback claimants who are utilizing substitution drawbacks."

Laney agreed, saying that people aren't talking about the way the bill reflects senators' view that drawback is an export promotion program.

"It’s a clear export benefit to the U.S. to improve the drawback process," he said. "Especially in this era where we’re using tariffs as a policy instrument, drawback becomes more important."

Laney said AAEI has been working with Louisiana Republican Sen. Bill Cassidy's office for more than three years to talk about trade facilitation, and AAEI and its members have met with staff more than two dozen times over that period.

The association's big picture reaction to the draft: "We think it’s a small step in the right direction, but there’s a lot of work to be done."

Laney gave the example of the section that talks about codifying the Border Interagency Executive Council, or BIEC. He said that going back to the executive order establishing BIEC, all the language is aspirational. "There wasn’t any meat to the bones." He said that a lot of the partner government agencies don't have the funds to really coordinate with CBP, or they don't have the authority to get things moving. He said he'd like the facilitation bill to establish what he calls a "responsible parent" for BIEC, either from the White House, or the Office of Management and Budget, or even DHS.

"There needs to be someone to drive this a little harder," he said. "There needs to be more management of the alignment of regulations." So AAEI wants the BIEC language in the draft tightened up.

Feldman noted that the language about deadlines for CBP to respond to requests for rulings, advice or protests is aspirational, but he's still happy to see it. Feldman worked for 10 years in CBP's Office of Regulations and Rulings, and he said it wouldn't really be feasible for Congress to set strict deadlines on time for responses.

"At least what this does for the first time in modern customs law, it requires CBP to review their deadlines to be accountable for their deadlines and to report to what their timeliness appears to be," he said. "I think it’s a good start." He said he was in a Commercial Customs Operations Advisory Committee working group six years ago on this issue, and that CBP followed some of the group's recommendations.

He said CBP does adhere to a 30-day turnaround for initial requests for rulings if the New York office can handle the ruling, but that valuation, drawback and requests for modifications or revocations of previous rulings automatically go to headquarters, where there is no deadline.

He said there is a deadline mandated by law to respond to protests -- but it's two years, and even "that doesn't always happen."

Feldman said language in the draft that asks PGAs to inspect data for packages when the manifest is submitted, not post-release, is very positive.

When PGAs ask for redelivery, because they think there could be an admissibility issue, the package is often already gone, and the importer is then on the hook for liquidated damages. Those are at least the value of the goods, if not triple the value. Feldman said most commonly, he sees a request for redelivery for sensitive commodities covered by the FDA, which are covered by treble penalties.

If this becomes reality, it "could create an environment where release is release, period. That would be huge."

He said FDA has always been engaged with the effort to avoid data redundancy and improve the import process.

Laney said his group shared information about data requests that are redundant for the export process, and said the language in the text that says that export data clerical errors should not trigger fines, unless there's a pattern of rulebreaking, addresses an issue AAEI has had for years.

As the government is keeping a closer watch on goods moving in and out of the U.S., Laney said, "People are going to make mistakes. When a simple mistake is made, we don’t want to hit them over the head with a hammer."

Although the members of the trade think there is some interest in moving customs modernization legislation, Feldman said it is likely to take a back seat to proposals to restrict de minimis, since there is a profound desire to address fentanyl smuggling in small packages.

Getting customs modernization passed is unlikely in 2025, Feldman believes, because the committees of jurisdiction will be consumed with dealing with the Trump tax cut expirations.

"I think it’s going to be more of a marathon than a sprint," he said.