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FY 2014 Spending Bill Includes Guidance on Cargo Scanning, Customs Infrastructure, FDA

Thursday, January 16, 2014
Sandler, Travis & Rosenberg Trade Report

The House and Senate are expected to approve shortly an omnibus fiscal year 2014 appropriations bill that will set spending levels for federal agencies through Sept. 30 and provide policy guidance on various issues. Highlights of the trade-related provisions of this bill (with funding compared to FY 2013 enacted amounts) include the following.

Homeland Security

- U.S. Customs and Border Protection’s border security inspection and trade facilitation efforts are funded at $3.2 billion, including $2.7 billion for inspections, trade and travel facilitation at ports of entry, $72.3 million for international cargo screening, $40.2 million for the Customs-Trade Partnership Against Terrorism, $109.9 million for automated targeting systems, and $65.5 million for the National Targeting Center.

- The bill provides $255.7 million for CBP to hire at least 2,000 new officers by the end of FY 2015 and directs CBP, in assigning these new officers, to “be mindful of the critical importance of adequately supporting operations in the cargo environment.”

- A total of $816.5 million is provided for automation modernization.

- A five-year pilot program would be established to permit CBP to enter into partnerships with private sector and government entities related to ports of entry that allow the agency to be reimbursed for services and to accept donations. However, the bill does not provide any new authority for CBP to provide services outside the U.S. In addition, while there is no specific limit on the number of partnerships related to land or sea ports authorized under the pilot program, CBP may enter into no more than five agreements at CBP-serviced air ports of entry for overtime costs only.

- The secretary of homeland security is directed to re-evaluate the feasibility of implementing the statutory requirement to scan 100% of containers bound for the U.S. prior to loading them on a vessel in a foreign port and to either issue a 100% scanning strategy or propose an alternative strategy for congressional consideration.

- CBP is directed to adhere to the briefing and/or reporting requirements in the House and Senate reports regarding resources dedicated to cargo inspection and commercial fraud, including circumvention of duties and misclassification of entries of goods from China; collection of outstanding duties; the use of single entry transaction bonds; coordination with the Treasury and Commerce departments on the use of new shipper reviews and improvement of liquidation instructions; and enhanced trade enforcement efforts.

- The Transportation Security Administration is funded at $5 billion for activities such as security enforcement, cargo inspections and intelligence functions.

Commerce and Related Agencies

- The Office of the U.S. Trade Representative, slated to receive $52.6 million, is urged to leverage the existing resources and expertise of other federal agencies, when appropriate, to strengthen the U.S. negotiating position, including consulting subject matter experts and utilizing available information resources at relevant federal agencies for the purpose of supporting trade negotiating positions and saving taxpayer dollars.

- The bill provides $470 million for the International Trade Administration, including at least $320 million for global market activities, $7 million for SelectUSA activities, and $7.5 million for the Interagency Trade Enforcement Center.

- The Bureau of Industry and Security receives $101.5 million.

- The International Trade Commission is funded at $83 million.

- Any person who intentionally affixes a “Made in America” label to any product not made in the U.S. will not be eligible to receive any contract or subcontract with funds made available in this bill.

- No FY 2014 funding may be used to promote the sale or export of tobacco or tobacco products or seek the reduction or removal of foreign restrictions on the marketing of tobacco products, except those that are not applied to all tobacco or tobacco products of the same type. This provision is not intended to impact routine international trade services to all U.S. citizens, including the processing of applications to establish foreign-trade zones.

Agriculture

- The Department of Agriculture’s Animal and Plant Health Inspection Service gets $821.7 million for programs to help control or eradicate plant and animal pests and diseases that can be crippling to U.S. producers and entire agricultural industries. Included is $26.9 million for the agriculture quarantine inspection function, including pre-departure and interline inspections.

- The USDA’s Food Safety and Inspection Service gets $1.01 billion, down $19 million, to maintain more than 8,000 frontline inspection personnel for meat, poultry and egg products at more than 6,200 facilities across the country.

FDA

- The Food and Drug Administration receives $2.55 billion in discretionary funding, an increase of $91 million, and $1.79 billion in revenue from user fees.

- Lawmakers express concern that the FDA has significantly underestimated the cost of implementing its proposed rule on preventive controls for human food and encourage the agency to “re-propose a rule that provides the necessity, location and frequency of testing based upon risk/cost benefit and other established verification activities.” The FDA is also urged to “stay within the framework specified in law, ensure food safety rules are risk-based, and make certain that food safety improvements are economically feasible to both the agency and the industry.”

CPSC

- The bill includes $118 million for the Consumer Product Safety Commission.

- The Government Accountability Office is directed to conduct a study of the CPSC’s ability to respond quickly to emerging consumer product safety hazards and to report to Congress on whether the CPSC requires any additional authorities and resources to meet that objective.

State

- The bill supports continued operations of the Export-Import Bank ($115.5 million in administrative expenses) and the Overseas Private Investment Corporation ($62.6 million for non-credit account) and prohibits them from blocking coal-fired or other power-generation projects that increase exports of U.S. goods or services or prevent the loss of U.S. jobs. Ex-Im is encouraged to use 20% of program authority made available to finance exports by U.S. small businesses. The Trade and Development Agency is funded at $55.1 million.

- The bill prohibits funding to implement the United Nations Arms Trade Treaty.

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