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Data to Remain Key Part of CBP Enforcement Efforts, Officials Say

Monday, March 05, 2018
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection officials said recently that they anticipate retaining and perhaps even expanding the agency’s data collection requirements as a key part of the agency’s evolving enforcement efforts.

Remarks from CBP officials at the annual East Coast Trade Symposium indicate that the agency is giving a lot of consideration to emerging threats. In a discussion with private-sector representatives, officials said e-commerce offers perhaps the most significant risk because it requires CBP to focus on individual packages rather than entire containers, facilitates collaboration between violators, and expands the number of foreign importers of record (which are more difficult to get information from). Other technological developments, such as the Internet of things (where appliances have the ability to order goods to be imported) and alternative forms of payment like bitcoin, offer challenges as well.

As it considers how to respond to these threats, CBP is evaluating its current and historic enforcement efforts to determine what has worked and what hasn’t. Officials acknowledged that CBP has had difficulty in the past finding the balance between utilizing collaborative efforts and imposing penalties to improve compliance. Officials also said the agency has struggled to adapt its enforcement tools to the e-commerce environment, particularly ensuring that it continues to receive required information from the non-traditional entities often involved in electronic transactions.

CBP is already receiving substantial amounts of information from the trade and is still working to determine how to translate that into actionable information, officials said. Nevertheless, additional information could be required in the future as CBP works to further analyze and segment risk. CBP is also interested in learning about predictive analytics, which uses large volumes of data as part of an effort to analyze the possibility of future outcomes. Robert Perez, acting executive assistant commissioner for operations support, said that given advances in artificial intelligence and machine learning this tool could help CBP get ahead of risks and trends rather than just responding to them. CBP already has a department looking into these issues, Perez said.

The trade community has expressed some wariness about providing additional information to enforcement agencies, but CBP officials offered a firm defense. Commissioner Kevin McAleenan emphasized that CBP’s enforcement mission is focused on protecting human lives, including U.S. consumers (from unsafe products), foreign laborers (from forced labor practices), and others. Others noted that society as a whole is becoming more comfortable with providing additional information to obtain convenience and other benefits and that companies themselves use “big data” to identify patterns in supply chain operations, consumer behavior, and other areas.

Regardless of how requirements for and usage of information may evolve, CBP is already taking steps to adapt to the evolving enforcement environment. CBP officials said improved cooperation and collaboration with other government agencies and foreign governments will be essential to targeting bad actors, which has become more difficult because the worst ones are often buried several levels deep in the supply chain. Expanded authorities provided by the Trade Facilitation and Trade Enforcement Act should help here as well. CBP also plans to continue to develop and enhance a trusted trader program that will allow it to focus its resources on higher risk entities and transactions.

Sandler, Travis & Rosenberg’s Lenny Feldman, a member of CBP’s Commercial Customs Operations Advisory Committee, said there are steps traders can take as well. Perhaps most importantly, Feldman said, companies need to develop and implement compliance programs that are sustainable; i.e., able to evolve as laws, regulations, and policies continue to change. These programs need to be informed by current and accurate information, so companies should pay close attention to their information sources. This includes not only consulting official CBP communications such as informed compliance publications and CSMS messages but also ensuring open lines of communication with suppliers. Feldman said another valuable measure companies can take is to develop a relationship with the Center of Excellence and Expertise that deals with their industry so CBP can become more familiar with their business and help them avoid and mitigate potential enforcement concerns.

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