CBP is developing a repository of possible deregulatory actions that could serve as offsetting actions for regulatory proposals considered "significant" by the Office of Management and Budget, said Alice Kipel, executive director of CBP's Office of Regulations and Rulings (OR&R), during a May 8 interview. Federal agencies, under a January executive order, are required to repeal two regulations for each new regulation seen as "significant" by OMB (see 1702070048). So far, though, OMB has not flagged any trade-related CBP regulations as "significant," Kipel said. "At this time, with respect to the regulations that CBP has in the interagency review process, I am not aware of any trade regulation that has been deemed 'significant' by OMB and offsetting regulations would not be immediately" necessary if it hasn't been deemed significant, she said.
Drawback
A duty drawback is a refund by CBP of the duties, taxes, or fees paid on imported goods, which were imposed upon importation as prescribed in 19 U.S.C. 1313(d). More broadly, a drawback also includes the refund or remission of other excise taxes pursuant to other provisions of law.
CBP won't be able to accept drawback claims filed in ACE under the revised processes that come from the Trade Facilitation and Trade Enforcement Act when they take effect on Feb. 24, 2018, the National Customs Brokers & Forwarders Association of America said in a May 9 email. The agency lacks the funding to complete the TFTEA-related programming and "CBP believes that it needs a full year to program all agency requirements," according to the NCBFAA. Still, CBP is expected to finish necessary regulatory changes by the statutory deadline, even if ACE isn't ready for the TFTEA changes.
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Notices of intent to export for drawback must be filed at the port or by fax or email to ensure that the exporter gets proof of timely submission, CBP said in a recent ruling. Though submission by postal service is allowed, the filer risks that the application will not end up in the right hands at the port for processing, it said in ruling HQ H272816 (here). CBP also agreed with CBP San Francisco’s decision to reject an unused merchandise drawback application filed by CITTA Customs Brokerage because the relevant notice of intent was submitted unsigned.
The timing for ACE programming related to changes to drawback from the Trade Facilitation and Trade Enforcement Act is uncertain due to a lack for funding to cover such programming, said Michael Cerny, a lawyer with Cerny Associates. CBP said in its most recent newsletter on drawback progress (here) that the agency discussed TFTEA and ACE during an April 13 teleconference and that similar calls will occur biweekly with a drawback-focused working group that helps advise CBP on drawback in ACE. Cerny, who is also in the drawback working group, said by email that "the trade has concerns about there being enough time for CBP to complete that programming in order to accept claims" by Feb. 24, 2018, as required in TFTEA (see 1603010043).
A termination of NAFTA would cause “all kinds of compliance issues,” mainly for companies operating in Mexico, Drinker Biddle attorney Nicolas Guzman said during an April 28 panel discussion. “So many companies are heavily invested in Mexico, that even if this goes away, they’re going to remain there,” he said during a session at an American Bar Association Section of International Law conference. “So if they’re going to remain there, then I think negative relations would quickly make it important to make sure those operations are being run in an appropriate and compliant manner.” Reports surfaced last week that President Donald Trump was considering withdrawing the U.S. from NAFTA, before he agreed not to terminate the deal (see 1704270007).
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CBP issued the following release on commercial trade and related matters:
Industry groups asked the U.S. government to work to repeal restrictions on NAFTA drawback and duty deferral and to expand ACE, in response to the Commerce Department’s request for information (here) on regulations that hamper domestic manufacturing. Although negotiators included the drawback and deferral restrictions in NAFTA to prevent China from using Mexico as a platform for component parts to be exported to the U.S., several companies involved in duty preference programs for foreign investors and domestic firms have nevertheless convinced suppliers from Asia and Europe to establish production facilities in Mexico to replace imports from non-NAFTA sources, according to the Duty Drawback Coalition’s comments (here). To counter the negative effects of NAFTA drawback restrictions on foreign-owned manufacturing plants in Mexico, Mexico established Sectoral Promotion Programs, which reduce several standard duty rates, the coalition said. Canada has reduced duty rates to mitigate the effects of the NAFTA drawback restrictions as well, the group said.
CBP remains wary of creating a Center of Excellence and Expertise entirely focused on customs brokers, said Rich DiNucci, executive director-cargo and conveyance security at CBP, during the National Customs Brokers & Forwarders Association of America annual conference April 4. Despite some early discussion of the possible addition of a CEE to focus on broker management (see 1510210017), CBP isn't inclined to further segment the importing process, DiNucci said. The CEEs will certainly evolve, "but I would say it's much too early to get into that concept now. We'll see where we are three, four years from now."