U.S. Customs and Border Protection’s efforts to pursue “intelligent enforcement” as part of its 21st century customs framework should include steps to recognize trade partnerships and modernize internal processes, according to a white paper recently submitted by CBP’s Commercial Customs Operations Advisory Committee.
For more information on COAC or this white paper, please contact ST&R member and COAC co-chair Lenny Feldman at (305) 894-1011.
Partnership Accounts. COAC said that the decision-making and resolution process for CBP’s Fines, Penalties, and Forfeitures branches “often lacks uniformity regarding time frames, rationale for decisions and consequence delivery” and that it is often not evident whether a company’s trusted trader status is considered in the adjudication of cases. CBP should therefore consider (1) realigning its FPF offices to create a trusted trader center, office, or branch to address cases involving such partners and (2) enhanced mitigation guidelines for CTPAT/trusted trader partners. When mitigating such claims CBP should provide partnership accounts the ability to demonstrate a financial investment in compliance and/or infrastructure.
Penalty Issuance. In addressing claims and managing the enforcement process, COAC said, CBP should consider not only the prior record or history of the petitioner’s violations but also the account’s commitment to partnership, with CTPAT and trusted trader status an important consideration. CBP should consider issuing warning letters and informed compliance to appropriate accounts in lieu of enforcement actions by evaluating the accounts’ status, volume, and record.
In addition, enforcement evaluation teams should be created at a Center of Excellence and Expertise or national level so that the issuance and resolution of claims would be handled nationally and uniformly instead of locally and inconsistently. “This could enable CBP to avoid issuance of claims that would be cancelled or substantially mitigated months later,” COAC said. “It also could decrease the flood of less consequential cases, improve work-load management, increase efficiencies and promote a focus on truly bad actors.”
Similarly, CBP should consider adjusting the settlement process on a national level, as it does for certain liquidated damages claims through its finance center in Indianapolis, for other claims (e.g., seizures and penalties) instead of handling them differently from one jurisdiction to the next. This would not only promote a more uniform and transparent resolution process, COAC said, but could also provide an opportunity to “arrive at meaningful, impactful settlements that address CBP as well as violator concerns, perhaps considering infrastructure or compliance improvements as part of the settlement.”
Notices and Decisions. COAC urged CBP to continue to support the modernization of the Seized Assets and Case Tracking System, which it called “the backbone of CBP’s internal enforcement processing system.” Specific changes should include (1) aligning SEACATS with the Automated Commercial Environment for trade-related cases so there is a more seamless communication flow between petitioners and CBP, (2) improving liquidation, penalty, and
detention/seizure notices to ensure they provide all the information and detail necessary to inform the petitioner of the reasons for the claim, (3) aligning the automated enforcement system such that the Office of Field Operations, Center officials, national account managers, and supply chain security specialists can evaluate and/or provide input on such claims in a seamless and
relevant manner, and (4) automating the petition process to an electronic format similar to the ACE protest portal.
Enforcement Rationale and Guidance. To better enable petitioners to avoid future problems by adopting more compliant behaviors, COAC suggested that CBP (1) provide greater detail in its detention, seizure, liquidated damages, and penalty notices as well as in its rationale when granting or denying mitigation, (2) do away with “free-form,” non-standard submissions, and (3) include in its decisions suggested actions and/or resources for the petitioner to consider in developing compliance programs.
Petition and Appeal Process. Stating that the current enforcement process is overly cumbersome and delayed, minimizing the opportunity for petitioners to assess and implement compliance programs and financial investments to avoid future claims, COAC recommended that CBP consider other federal agency enforcement models, including those that provide for substantial interaction “on the front end.” Should CBP maintain its current process, COAC said, it should consider requiring claimants who request a supplemental petition to request “further review” similar to a protest based on certain enumerated criteria. CBP should also consider a different process for claimants found to repeatedly violate the same or similar laws, perhaps involving CBP counsel and a hearing or meeting.
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