Next Steps for Customs Framework Explored at AAEI Panel
CBP and the Commercial Customs Operations Advisory Committee, or COAC, have "several issues where the COAC and CBP have agreed to disagree," in a customs modernization proposal, said Flexport's Caroline Dale (see 2306050069), but the lengthy work to come to consensus is just the start.
From CBP's side, Brandon Lord, executive director of the Trade Policy and Programs Directorate, said the 21st Century Customs Framework has "to move through a very very formal interagency process to turn it into an official administration" proposal, and then, it will be sent to Congress. "We have to make sure there aren’t other agencies that have equities, or things they want to tweak, to the facilitative concepts, or to the package as a whole."
Simultaneously, CBP is giving technical assistance to members of Congress writing bills to change de minimis or working on their own customs modernization bills.
From the trade side, there were some areas where the various perspectives on COAC didn't reach a consensus. And for those priorities, individual industries that want to advance them are going to have to be prepared to lobby members of Congress directly, according to Roanoke Insurance's Matt Zehner, who moderated a panel June 21 on customs modernization at the American Association of Exporters and Importers conference.
Zehner said the COAC process was productive. "We feel we helped file down some of the sharp points that customs had, especially on the enforcement side."
Dale issued a "call to action," saying there is a brief window for those who import to get their views heard before legislation gets written. She said that the head of AAEI "is working hard on the Hill on your behalf," but that this is too important, and customs bills are too rare to leave it to the associations.
The panelists made note of two bills that have been introduced to restrict the use of de minimis. Both eliminate eligibility for Chinese shipments, which account for at least half of all de minimis packages; a bill from Sen. Bill Cassidy, R-La., would change the U.S. de minimis level to match trading partners' lower thresholds.
Zehner said, "Sen. Cassidy has been very influential" as Congress begins grappling with customs reform. "He’s not as big of a fan of trade facilitation," he said, adding that Cassidy's pet issue is fighting trade-based money laundering.
He said that Sen. Sherrod Brown, D-Ohio, and Rep. Earl Blumenauer, D-Ore., who co-sponsored the other de minimis bill, are known to be strong advocates for domestic manufacturers. Zehner said while not every bill that gets introduced makes it into law, there is the chance one of these proposals could be bolted onto the customs modernization ideas CBP put forward.
He also noted that the law may not be specific enough to provide operational guidance, with the intention that details will be worked out through rulemaking, but if you don't trust that the changes you want will come in that rulemaking, you should push for language in the bill to address them. One specific idea Zehner offered is that importers can pay electronically and get refunds electronically.
Panelist Steve Story, executive vice president of customs and international trade at Apex Logistics International, complained that Blumenauer is "misinformed on de minimis." He said the data required in Blumenauer's bill are existing manifest data elements.
Apex has been one of the official nine participants in the Section 321 data pilot, and Story went through the data elements that are part of that, saying that Apex doesn't submit the marketplace seller ID because no shipper provides that, and said no companies are submitting manufacturer ID numbers, either. "That’s going to be pretty hard to get," he said.
Story shared data on the number of de minimis entries that were denied because they were over the $800 threshold, and the number of IP seizures, narcotic seizures and other seizures in FYs 18, 19, 20 and 21.
"There’s legislators who think there's a lot of violations in the de minimis environment," he said, and he argues the data he got from CBP shows that's not true, because with 771.5 million packages sent in 2021, only 2.7 million were ineligible due to value, only 8.7 million overall were ineligible, and 123,484 packages were seized, with more than half of those sent by mail rather than by companies such as his or by express carriers like FedEx. He argues that shows that de minimis is more than 98% compliant trade.
One of the members of the audience questioned whether the small number of seizures really means the rest of what entered the U.S. was compliant.
The attendee asked: "Aren’t the de minimis seizure and inadmissible numbers just a function of the enforcement resources focused on those shipments?" If de minimis receives less scrutiny, it also could have fewer enforcement actions.
Panelist JD Gonzalez, owner of JD Gonzalez CHB and president of the National Customs Brokers & Forwarders Association of America, told the audience that he focused on changes in how partner government agencies evaluate risk and examine goods.
He said COAC hopes that CBP seeks an executive order on PGA admissibility. Currently, many agencies offer a 30-day conditional release, and if one of those agencies asks for an item to return a day or two after CBP cleared it, "it’s kind of challenging to get the shipment back."
"One thing we’re trying to get: Release means release," he said.
Zehner said trying to get PGAs to change their approaches is like herding cats.
"It’s easy to work with Customs with what Customs can control," he said, and Lord broke in jokingly: "Say that again?"
The audience laughed.
While the customs framework makes it through the interagency process, and Congress works on bills, Lord said there are things CBP can do, even below the rulemaking level, to improve processes.
Lord said traders say to CBP: "You can do a lot now."
Lord replied: "OK, what should we do?"
He said the answer he gets is: "Make it easier for me."
"We need specific ideas," he said.