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Report Suggests Possible Changes to CBP’s Trade Facilitation and Enforcement Efforts

Wednesday, April 03, 2013
By Shawn McCausland
Sandler, Travis & Rosenberg Trade Report

A March 22 report from the Congressional Research Service on trade facilitation, enforcement and security efforts by U.S. Customs and Border Protection identifies a number of issues that Congress may want to address in its consideration of customs reauthorization legislation this year. The report highlights the “inherent tension” between facilitating the efficient flow of legitimate trade into and out of the U.S. and “the often competing goals” of enforcing trade laws and import security measures.

C-TPAT. The report suggests that the utility and future potential of the Customs-Trade Partnership Against Terrorism may be limited due to several factors. For one, C-TPAT is built on the model of the Customs Modernization Act of 1993, which established a “shared responsibility” approach to trade enforcement under which importers are largely responsible for making their own classification and duty determinations and CBP is primarily responsible for overseeing importers’ efforts and collecting revenue. “In theory,” the report states, “robust post-entry audits and high penalties for non-compliance should act as a deterrent, and shared responsibility may facilitate legal flows without compromising trade enforcement.” In the post-9/11 environment, however, “post-entry enforcement may be problematic” because it could allow the entry of products that are dangerous to the public or injurious to U.S. industries in some way.

Another problem is the practical difficulty of further improving the benefits associated with C-TPAT, which some businesses say are already inadequate given the time and financial investments required to obtain them. For example, access to dedicated lanes is the primary benefit of C-TPAT at land border ports of entry, but traffic bottlenecks can minimize this benefit and CBP has limited capacity to add more such lanes in many locations. In the case of maritime imports, the primary benefit is that low Automated Targeting System scores reduce the likelihood of an inspection, but with just 4% of all maritime containers selected for secondary inspection C-TPAT membership may offer little practical advantage in this regard.

Given these considerations, CRS concludes that the best way to encourage C-TPAT membership (which it estimates comprises only about 6% of all import-related businesses and about 8% of customs brokers) may be to increase enforcement against non-members, thereby increasing the relativebenefits of participation.

Land Border Wait Times. Some in Congress have expressed concern about delays and unpredictable wait times at land border ports of entry, particularly on the U.S.-Mexico border. While many strategies for promoting faster throughput may be in tension with security and trade enforcement goals, the report states, increasing port of entry personnel levels (which rose just 20% from fiscal year 2004 to FY 2012, a time in which staffing for enforcement between ports of entry more than doubled) may speed flows while also increasing enforcement capacity. On the other hand, such efforts could be opposed by lawmakers who have expressed skepticism about CBP’s staffing model as well as those who have encouraged CBP to make better use of technology and risk management to reduce border wait times.

100% Scanning. The SAFE Port Act of 2006 requires that 100% of maritime cargo containers admitted into the U.S. be scanned through non-intrusive inspection and radiation detection equipment in a foreign port prior to being loaded on a U.S.-bound ship. The deadline for 100% scanning was July 1, 2012, but the Department of Homeland Security has extended that deadline because experience has shown that 100% scanning would be difficult and costly to implement.

In light of these challenges, the report states, Congress may wish to consider provisions to allow DHS to scan less than 100% of U.S.-bound cargo. One reason is the cost, which some say may be great enough to shift certain trade flows away from U.S. markets. More generally, 100% scanning conflicts with DHS’s general approach to risk management, which seeks to focus scarce inspection resources on the highest-risk containers. The report points out that if illicit cargo is estimated to be less than 1% of incoming containers, as CBP believes, the most effective enforcement strategy may be to focus on containers most likely to pose a threat, invest in intelligence to improve targeting, and/or increase CBP personnel.

Interagency Coordination. The SAFE Port Act requires all federal agencies that require documentation related to the importation or exportation of cargo to participate in the Automated Commercial Environment once the International Trade Data System is fully operational, and as of August 2012 all 47 such agencies were involved in ITDS implementation. For those who may favor efforts to require other agencies to work more closely with CBP at various stages of the trade enforcement process, the report states, one option might be to require that each agency with responsibility for cargo clearance use ITDS exclusively for authorizing the documentation, clearing or licensing of cargo. On the other hand, some may be reluctant to delegate additional enforcement powers to CBP because doing so may dilute the enforcement authority of other federal agencies, potentially undermining their own missions.

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