Senate's Customs Reauthorization Bill Would Repeal Provision Prohibiting Use of 10+2 Data for Commercial Enforcement, Etc.

According to Senator Baucus, S. 1631 would direct U.S. Customs and Border Protection and Immigration and Customs Enforcement to make customs facilitation and trade enforcement a priority again. Among other things, the bill would emphasize CBP's commercial responsibilities, provide for additional Customs-Trade Partnership Against Terrorism benefits, establish a new entry facilitation trade partnership, create an interagency import safety working group, strengthen IPR enforcement, strengthen and expand the forced/child labor law, revise the drawback statute, require a Joint Strategic Plan, and provide for more advance trade/congressional consultation.

Prohibition on Using 10+2 Data Commercial Enforcement Purposes Would be Repealed

S. 1631 would amend the notes to 19 USC 2071 by repealing the provision (343(a)(3)(F) of the 2002 Trade Act) that prohibits mandatory advance electronic information (e.g., Importer Security Filing (ISF) information from importers and additional information from carriers (10+2)) from being used for determining merchandise entry or for any other commercial enforcement purposes.

(The notes to 19 USC 2071 currently state, in part, that such data shall be used exclusively for ensuring cargo safety and security and preventing smuggling, and shall not be used for determining merchandise entry or for any other commercial enforcement purposes.)

CBP Commercial Targeting Division for Commercial Risk Assessments for Cargo

S. 1631 would also require the Secretary of the Department of Homeland Security (DHS) to establish a Commercial Targeting Division within CBP's Office of Trade that would develop and conduct commercial risk assessment targeting¹ for cargo destined for the U.S. The information available in ACS, ACE, AES, ATS, ITDS and TECS² would be used for this purpose, to the extent practicable and otherwise authorized by law.

This Division would be composed of National Targeting and Analysis Groups, their directors, and an Executive Director, among others. NTAG enforcement priorities would be determined by the Commissioner and would include most of CBP's Priority Trade Issues (PTIs)³.

Both the Division and the individual NTAGs could issue Trade Alerts to the ports that would direct further inspection⁴, or physical examination or testing, of specific merchandise to ensure compliance with all applicable customs and trade laws and regulations administered by CBP.

(The Portscould determine not to conduct the actions required by a Trade Alert if justified by port security interests and notified to Headquarters, which would report such port determinations to the public and Congress on an annual basis.)

Importer of Record Program

Not later than 180 days after the date of the enactment, the DHS Secretary would be required to establish an importer of record program to assign and maintain importer of record numbers. The DHS Secretary would be required to ensure that, as part of that program, CBP:

develops criteria that importers must meet in order to obtain an importer of record number;

provides a process by which importers are assigned importer of record numbers;

maintains a centralized database of importer of record numbers, including a history of importer of record numbers associated with each importer;

evaluates the accuracy of the database; and

takes measures to ensure that duplicate importer of record numbers are not issued.

Not later than one year after the date of the enactment, the DHS Secretary would be required to submit to the Senate Finance and House Ways and Means Committees a report on the new importer of record program.

The term "number," with respect to an importer of record, means a filing identification number described in 19 CFR 24.5 of (as in effect on the day before the date of the enactment of this Act).

Report on Security Measures for In-Bond Shipments

Not later than December 31 of 2009, 2011, and 2013, the DHS Secretary and the Treasury Secretary would be required to jointly submit to the Senate Finance and House Ways and Means Committees a report on efforts undertaken by CBP to ensure the secure transportation of merchandise in bond through the U.S. and the collection of revenue owed upon the entry of such merchandise into the U.S. for consumption.

Report on CBP's Revenue Protection and Enforcement Measures

The DHS Inspector General would be required to submit to the Senate Finance and House Ways and Means Committee a report assessing the following:

The effectiveness of the measures taken by CBP with respect to revenue protection, including (i) the collection of countervailing and antidumping duties; (ii) the assessment and collection of commercial fines and penalties; and (iii) the adequacy of CBP's policies with respect to monitoring and tracking of merchandise transported in-bond and collecting duties, as appropriate.

The effectiveness of CBP's actions taken to measure accountability and performance with respect to revenue protection.

The number and outcome of CBP's investigations with respect to the underpayment of duties.

The adequacy of training with respect to the collection of duties provided for CBP personnel.

¹The Division would also establish targeted risk assessment methodologies and standards.

²Automated Commercial System (ACS), Automated Commercial Environment (ACE), Automated Entry System (but the bill might mean Automated Export System, AES), International Trade Data System (ITDS), the Treasury Enforcement Communications System (TECS).

³The enforcement priorities would include intellectual property rights, as well as health, safety, agriculture, textile and apparel, antidumping and countervailing, and general revenue related laws and regulations.

⁴The term "inspection" means the comprehensive evaluation process used by CBP, other than physical examination or testing, for purposes of assessing duty, identifying restricted or prohibited merchandise, or ensuring compliance with all applicable customs and trade laws and regulations.

(See ITT's Online Archives or 08/07/09, 08/13/09, 08/14/09, 08/19/09, 08/20/09, 08/26/09, 08/27/09, and 08/28/09 news, 09080715, 09081305, 09081405, 09081920, 09082015, 09082610, 09082715, and 09082815, for previous BP summaries on S. 1631.)

Senate Finance Committee press release (dated 08/06/09) available at http://finance.senate.gov/press/Bpress/2009press/prb080609.pdf.

Senate Finance Committees section-by-section summary available at http://finance.senate.gov/sitepages/leg/LEG%202009/080609%20Customs%20Section%20by%20Section.pdf.

S. 1631 available at http://finance.senate.gov/sitepages/leg/LEG%202009/080609%20Customs%20Reauthorization%20Bill.pdf.

Senator Baucus' floor statement on S. 1631 (dated 08/07/09) available at http://finance.senate.gov/press/Bpress/2009press/prb080709.pdf.