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C-TPAT, Forced Labor, Trusted Trader Among Ongoing COAC Efforts

Wednesday, August 10, 2016
Sandler, Travis & Rosenberg Trade Report

At a recent meeting of its Commercial Customs Operations Advisory Committee, U.S. Customs and Border Protection and other agency officials, as well as industry representatives, provided the following updates on COAC work.

AD/CV. Title IV of the Trade Facilitation and Trade Enforcement Act (otherwise known as the Enforce and Protect Act of 2015 or ENFORCE) imposes new requirements on CBP to investigate allegations of evasion of antidumping and countervailing duty orders. These requirements will take effect Aug. 22 but as of July 27 CBP had not made available any associated draft regulations or standard operating procedures. To assist CBP as it prepares to implement the ENFORCE Act, COAC has made the following recommendations.

- CBP should continue to conduct public outreach and educate the trade on ENFORCE proceedings.

- CBP should be provided with the appropriate resources to establish and maintain an online reporting tool that is similar to but distinct from the current eAllegations process on CBP’s website, includes information on the potential penalty for submitting false claims, and requires all parties in an ENFORCE proceeding to provide signed certifications of the accuracy of the submitted information.

- CBP should consider adding a regulatory provision to enable and require customs brokers to report evidence and/or incidents of evasion when it comes to their attention.

- CBP should put procedures in place as fully as allowed by the law that mitigate the risk of unwarranted damage to the reputation of innocent parties who have acted properly under the law.

Centers of Excellence. COAC’s Trade Modernization Subcommittee and Trade Facilitation Working Group have been developing best practices for CBP’s Centers of Excellence and Expertise, all ten of which are now fully operational.

C-TPAT. The Customs-Trade Partnership Against Terrorism working group of COAC’s Global Supply Chain Subcommittee is developing and revising C-TPAT minimum security criteria.

ST&R will be conducting a webinar Aug. 16 on C-TPAT best practices. Click here for more information or to register.

Export Manifest. CBP is currently conducting pilot tests evaluating the functionality of filing air, vessel and rail cargo export manifest data electronically through the Automated Commercial Environment, but these pilots have been moving more slowly than anticipated.

Air: As of July, CBP was waiting for profiles to be established for the air export manifest and expected to begin testing within a few weeks. There are six air carriers and three freight forwarders ready to begin testing.

Ocean: As of July there was one ocean carrier sending data into production for one vessel, two more carriers ready to send data into production and one non-vessel-operating common carrier testing in certification. The number of data elements to be submitted and the status of those elements (mandatory, operational or conditional) as well as the timeframe for submission (24 hours prior) have been agreed upon for the pilot.

Rail: There is currently one rail carrier sending data to production and one testing.

CBP and COAC are continuing to discuss various aspects of these pilots, including deadlines for the submission of data, data elements, and how CBP should target high-risk shipments. A working group has been established to develop the truck electronic export manifest pilot but due in part to the complexities of truck operations any announcement of this pilot will likely take some time.

Forced Labor. The TFTEA repealed a statutory provision that allowed the importation of goods made with forced labor if they were not produced in such quantities in the U.S. as to meet domestic consumptive demands. CBP said it immediately implemented this change and initiated a review of its regulations to make conforming changes.

A new working group was established July 13 with more than 20 members representing importers in the aerospace, agriculture, food, retail and software sectors as well as trade associations, non-governmental organizations, CBP, Homeland Security Investigations/U.S. Immigration and Customs Enforcement, and the Department of Labor. This working group will focus on developing supply chain integrity standards and improved enforcement tools for CBP and the private sector alike and expects to provide recommendations in November.

Importer Risk Assessment Program. To implement the TFTEA provisions on the establishment of an importer risk assessment program, COAC continues to support the following prior recommendations that were made to assist with identifying various importer risk factors.

- CBP should pursue information collection to improve its admissibility determinations via the proposed revisions to CBP Form 5106.

- CBP should consider the manner in which the current Broker-Known Importer Program could satisfy the customs broker’s responsibility to vet an importer’s identity and authenticity.

- CBP should build functionality in ACE to help prevent corporate identity theft that enables the importer of record to control and limit which customs brokers or filers, by filer code, are authorized to make entry in each port of entry tied to the IOR number.

IPR. COAC said it supports the following recommendations with respect to intellectual property rights enforcement.

- Having determined that the known importer program initiative cannot be managed uniformly by all trade associations to pilot and/or implement at this time, the IPR working group should continue to consider other approaches to developing a known IPR supply chain program.

- CBP should investigate partnering with e-commerce stakeholders to develop an automated process for their online customers to complete a survey if they feel the shipment of product they received is not legitimate.

- CBP should consult with the working group to determine how to better facilitate cargo that arrives as “blanks” without a logo or trademark to distinguish the brand at the time of arrival to reduce resources CBP is expending on unnecessary seizures. The working group should consider how this could be automated to manage known parties or entities to the transaction within the ACE portal.

Trusted Trader. COAC’s Trusted Trader Subcommittee has discussed future work based on its recommendation that CBP focus trusted trader strategic and tactical objectives on developing compelling benefits for voluntary participation that should outweigh the cost of participation. Toward that end, once CBP completes an assessment of the trusted trader pilot later this year the subcommittee expects to use that evaluation in developing a trade compliance program to replace Importer Self- Assessment; assessing current and future benefits under the trusted trader program (taking current incentives under CBP and other agency partnership programs into account); and finalizing a strategy framework for an enhanced trusted trader program that allows for flexibility, scalability and attainability for multiple business models, is globally aligned with authorized economic operator programs and mutual recognition arrangements, and provides tangible benefits while maintaining CBP’s risk assessment capability.

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