Customs Reauthorization Passes by Landslide, Heads to President's Desk
The conference report of the Trade Facilitation and Trade Enforcement Act of 2015, HR-644, passed the Senate on Feb. 11 by a landslide vote of 75-20, marking a major step toward reauthorizing CBP and changing a number of customs processes. The House passed the conference report in December (see 1512110029), and Senate approval means the bill will next go to President Barack Obama, who hasn't raised any objections. Industry and lawmaker reactions to the approval of the bill, which would go into effect 180 days after the President signs it into law, was largely positive.
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Among the big changes in the legislation are an increase in the de minimis limit to $800, a new "importer of record program" and new importer identification requirements for customs brokers. The bill would also eliminate an exemption to the ban on importation of goods made with convict or forced labor. The final bill combines the underlying respective ENFORCE and PROTECT concepts of the original Senate and House versions of the customs bills. Specifically, the legislation would impose the ENFORCE Act's firm deadlines on CBP to investigate claims of antidumping and countervailing duty evasion, and would require new regulations on customs broker identification of importers, under threat of penalty.
A provision in the legislation that was absent from either chamber's original bill would hold CBP to reliquidating entries within 90 days of the actual date of liquidation. It also would create a new Trade Remedy Law Enforcement Division (TRLED). During an unrelated Feb. 10 Senate Finance Committee hearing, Treasury Secretary Jack Lew said the new enforcement provisions will hold future presidential administrations accountable for processing cases of duty evasion, adding that the bill's instructions to streamline CBP operations should foster legitimate trade.
Senate Finance Chairman Orrin Hatch, R-Utah, and Ranking Member Ron Wyden, D-Ore., applauded the bill for its enforcement provisions and illustration of the potential for bipartisanship on Capitol Hill. Hatch called it a "big win" for trade policy. “Years of stagnation had enabled countless trade problems to accumulate, many of them crying for legislative resolution," Hatch said in a Feb. 11 statement. "Today, Congress responded and moved to enact legislation that will strengthen and modernize U.S. international trade institutions and policies for generations to come."
Passage of customs reauthorization drew wide praise from industry, as different groups extolled the bill’s mechanisms for destruction of trade barriers and its enforcement provisions, both of which industry said should help U.S. businesses compete globally. Express Association of America Executive Director Mike Mullen described the bill as "one of the most important votes they will take this year." Mullen highlighted the bill's provisions that "will facilitate the expansion of ecommerce, including simplified customs procedures for low value shipments and for U.S. goods returned." The National Association of Manufacturers was also pleased, said NAM's Vice President of International Economic Affairs Linda Dempsey (here).
The legislation "will enable U.S. businesses to be more competitive globally by unleashing the potential for small and medium-sized businesses to access foreign markets,” U.S. Chamber of Commerce Executive Vice President for Consumer Affairs Bruce Josten said in a statement (here). “By removing unnecessary chokepoints to imports and exports, this bill calls for common sense steps that will improve our nation’s national security while better facilitating legitimate trade.”
The U.S. Council for International Business echoed U.S. Chamber’s statements, and also highlighted its lobbying work ramping up to completion of the conference report, specifically mentioning its advocacy behind the bill’s inclusion of a boost of the de minimis limit from $200 to $800. “This is a very welcome development that has been a long time in coming,” USCIB CEO Peter Robinson said in a statement. “We applaud Congressional leadership, the conferees, and the members of Congress and staff who worked hard to craft a bipartisan, bicameral compromise bill that meets business needs, updates outdated procedures, and reduces business costs and paperwork burdens.”
While the customs provisions were largely noncontroversial, the bill stalled for a two-month period over negotiations on whether to remove an unrelated extension of a permanent Internet access tax ban embedded in that report. Sen. Lamar Alexander, R-Tenn., objected to the Permanent Internet Tax Freedom Act (PITFA), and its inclusion in the customs legislation, but his vote against a motion for a final vote on the bill was unsuccessful, as senators had voted 73-22 to move the bill to the floor. Alexander was also one of only three Republicans to vote against the customs bill itself. Senate Democratic Whip Dick Durbin, D-Ill. had joined Alexander in opposition over inclusion of the internet tax ban, but relented after Senate Majority Leader Mitch McConnell, R-Ky., promised consideration of internet sales tax legislation, he said in an emailed statement.