Background

U.S. Customs and Border Protection has said it will take actions by Oct. 31 to implement recommendations from the Department of Homeland Security’s Office of Inspector General regarding the operation of CBP’s Centers of Excellence and Expertise.

According to the report, the Trade Facilitation and Trade Enforcement Act required CBP to implement the Centers to promote uniformity throughout CBP by centralizing trade enforcement and facilitation using an account-based approach. CBP said this realignment established the Centers as virtual ports of entry, with Center personnel now performing many nationwide post-release trade activities; processing entry summaries, collections, statements, and product exclusion orders; tracking and assigning protests and petitions; processing prior disclosures; performing revenue-related targeting and final liquidation of entries; and making decisions on merchandise from their assigned importers. Center directors and designated trade enforcement coordinators also participate in the Commercial Enforcement Analysis and Response process to initiate, monitor, and process penalty cases from importer violations.

However, the report encouraged CBP to adopt more uniform, clear, and consistent procedural guidance (including standard operating procedures) for how the Centers should complete post-release trade activities to protect trade revenues. For example, OIG recommended that CBP more clearly outline the Centers’ specific roles and responsibilities for initiating, processing, and tracking trade penalty cases, which would reduce the potential for errors, improve the environment over processes, and enhance clarity among staff about their duties and responsibilities.

CBP asserted that it has already made progress in this area, pointing to the handbooks, guidance memoranda and directives it provided to OIG that set forth procedures and expectations for meeting the statutory and regulatory requirements for customs matters. However, OIG maintained that this documentation could be made clearer, including with respect to the specific roles of Center personnel.

Further, the report said CBP should more consistently follow the enforcement processes it does have. For example, Center directors are instrumental in overseeing the CEAR process, a key trade enforcement tool to ensure timely and nationally uniform handling of commercial violations involving priority trade issues. CEAR meetings are required at least monthly to review violations and decide on the next course of action for CEAR referrals, and CBP must document the outcomes of these meetings. However, the report said CBP should hold the monthly meetings more consistently and improve its oversight of the CEAR process to improve timely revenue collection and better use Center personnel’s industry knowledge to properly address penalty cases, determine corrective actions, properly close out cases, and collect revenue.

CBP responded that the CEAR process has no relationship to the collection of trade revenue because trade revenue is defined as duties, taxes, and fees but CEAR is focused on determining “the impact level of trade violations.” CBP also asserted that the assessment and tracking of fines and penalties is the responsibility of the Fines, Penalties, and Forfeitures offices, which are not part of the Centers, but OIG said the CEAR process exists at each Center to coordinate commercial enforcement activities.

OIG concluded by recommending that CBP establish performance standards for the Centers, periodically assess their performance, clearly define their roles and responsibilities in revenue collection, establish and implement enforcement procedures that include Center officials in the decision-making process, and update SOPs for trade penalty cases to clearly delineate the Centers’ role. CBP concurred and said it would work to complete associated changes by Oct. 31.

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