CBP Reauthorization, Unrealized Last Congress, May Reappear in Coming Months as Industry Pushes Tweaks
A new CBP reauthorization bill is expected to materialize in the coming months, say industry stakeholders, who are pushing for some changes to the CBP bills introduced last year but say they support those bills overall. The House Ways and Means and Senate Finance Committees are accepting comments on the two bills introduced in December: HR-6642 and HR-6656, which, other than language on antidumping and countervailing, are nearly identical. Observers pointed to new non-resident importer requirements and the severity of penalties allowed for providing inaccurate importer security filing data as parts of the bills they would like changed.
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(Read HR-6642, introduced by former Ways and Means Trade Subcommittee Chairman Kevin Brady, R-Tex., here. Read HR-6656, introduced by Ways and Means Ranking Member Sandy Levin, D-Mich., and former Trade Subcommittee Ranking member Jim McDermott, D-Wash., here. Neither bill made it out of subcommittee before the Congress session ended.)
“From what we’ve heard, [a House CBP bill] should be [arriving] sometime in the relatively near future, the next couple months,” said Mike Mullen, executive director of the Express Association of America, a coalition of the four large integrated express delivery companies, in an interview. Ways and Means is currently receiving and analyzing comments from stakeholders, said Sarah Swinehart, press secretary for Committee Chair David Camp, R-Mich., in an email. “We hope to reintroduce and move a bipartisan bill right after we’re satisfied that we have the best product,” she said.
The Senate, meanwhile, is “not showing its hand as to when it will introduce a bill,” said Jon Kent, a lobbyist who represents the National Customs Brokers and Forwarders Association of America, in an interview. Chairman Max Baucus, D-Mont., is working with Ranking Member Orrin Hatch, R-Utah, on a new CBP bill, said a Senate Finance Committee aide through email. The Committee briefly discussed the need for changes at CBP last month during the nomination hearing for Treasury Secretary Jack Lew. Baucus raised concerns about CBP neglecting its trade mission, while fellow committee member Sen. John Thune, R-S.D., heartily criticized the agency for failing to collect bonds owed on Chinese agricultural goods. (See ITT’s Online Archives 13022807).
The strength of last year’s CBP bills lies in the way they propose to streamline the agency and help shipments move more fluidly over the border, Mullen said. He supports the proposed organizational changes -- creating a deputy commissioner for trade and a trade advocate -- and raising the de minimus level from $200 to $800. That will “particularly benefit small and medium businesses,” Mullen said. The bills also require all 48 agencies with border responsibilities to participate in the International Trade Data System by a certain date; an important measure, Mullen said, as ITDS pools resources and allows for better risk management. The deadline is also crucial, because “left to their own devices, agencies aren’t going to get there,” he said.
Non-resident Importer Requirement of Concern
Mullen said the EAA is proposing at least one change to the bills, regarding the non-resident importer requirement. Last year’s bills crafted new conditions for importers that aren’t U.S. citizens, lawfully permitted alien residents or that are commercial entities not organized within the U.S. Such importers would be required to designate a resident agent who would be financially liable for any problems with the shipment.
This requirement for non-resident importers “would have a seriously negative impact on the trade market,” Mullen said, especially for small and medium companies. Because the risk is so great, no customs broker agency would be willing to accept financial liability, said Cynthia Allen, former head of CBP’s Automated Commercial Environment Business Office, now with DHL. Brokers may conduct credit checks on their clients, but don’t have the time to ensure they can pay 100 percent of their duties, she said. The proposed regulation “changes the nature of the relationship between our customers and us.” And because many Canadian companies are non-resident importers, it would “impede our ability to effectively trade with Canada,” Allen said.
The U.S. Business Alliance for Customs Modernization is also submitting comments on the non-resident importer requirement, said Sidley Austin lawyer Richard Belanger, counsel to the group of large companies working to improve government export and import procedures. They are pushing for a change in the bill’s section on the creation of a Commercial Targeting Division within CBP, charged with developing and conducting cargo risk assessment.
The Division would be allowed to use 10+2 data -- advanced trade data provided to CBP before cargo even leaves its foreign jurisdiction -- for targeting purposes. “The intent [of this section] is good,” Belanger said in an interview. “We support allowing CBP to use any data that it gets for targeting." Until now, such data has been used exclusively for ensuring transportation security. The proposed Division would use the data for commercial enforcement. The penalties for incorrect or incomplete information there are far more severe. Making this additional data available might be read as allowing CBP to impose sanctions other liquidated damages, which is what’s currently allowed, Belanger said. BACM wants any CBP bill to be revised so the penalty remains as liquidated damages.
For Kent, any CBP reauthorization legislation needs to give the agency leeway to chart its own course. HR-6642 directs the Centers for Excellence and Expertise, for example, requiring them to improve enforcement, the accuracy and completeness of data and the flow of information between federal departments and agencies. But the CEEs are still a work in progress as CBP tests what works and what doesn’t, Kent said. “[Any] bill needs to take note of the direction that Customs is going, but not be too specific about telling Customs how to evolve.” -- Jessica Arriens
See ITT's Online Archives for more information about the contents of HR-6642 and HR-6656 as they relate to: