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Rulemaking on Type 86 Data Highest Priority at CBP

The executive at CBP responsible for the two pilot programs collecting data for Section 321 and Entry Type 86 told an audience of brokers that issuing a notice of proposed rulemaking on required data submissions for de minimis shipments is "of the highest priority at CBP right now." He repeated for emphasis, "The highest priority. From the commissioner down, it has been: 'When are we going to get the NPRM?'"

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Brandon Lord, executive director of the trade policy and programs directorate, said Sept. 11 at the National Customs Brokers & Forwarders Association of America conference that his team is working on the NPRM, but added, "It is an extremely complex rule."

Lord said the pilots have demonstrated what data elements will be useful to uncover the risk in the small package environment -- a lane of imports that will exceed 1 billion shipments in the current fiscal year, Lord said.

"Doing nothing is increasingly not an option for us," he said, noting that 80% of pill press seizures have been in small packages. Pill presses are used by drug dealers who are turning powder into counterfeit pills. "We're taking a comprehensive look at our enforcement. That includes, just to be honest, the broker's role in filing entry type 86."

Lord said that members of his team, along with CBP broker management officials, recently visited nearly a dozen different brokers who had filed more than one Type 86 entry for a package that CBP discovered contained fentanyl.

"Our attitude is: Type 86 still requires reasonable care," he said. He told brokers they will be seeing more times when CBP tells brokers that what they filed as a Type 86 will need to be a formal entry, "because we’re seeing fentanyl like I mentioned, or because we’re seeing other issues of noncompliance.

"We’re counting on you to know what’s in that box and who’s sending it," he said. "The vast majority of entry type 86 transactions, the broker is filing and acting as the importer of record. Nothing wrong with that, but it certainly exposes you to a greater risk of liability."

Lord did not predict when the NPRM might come out. During his speech he noted that the current fiscal year ends in 19 days, and said wryly, "We'll have more money to keep going on October 1, we're super optimistic on that."

The audience laughed. House Republicans, the Senate and White House don't agree on the funding levels for the federal government, and although House Speaker Kevin McCarthy, R-Calif., agreed to certain levels with the White House earlier, appropriations committees in the House have been passing bills with much lower spending levels than both that agreement, and than the Senate appropriators are passing.

In a brief interview after his speech, Lord said a federal government shutdown would send some of his team home, as they wouldn't be considered essential workers. (The others would have to continue working without pay.) "It will hinder that" NPRM work, he said. Those who would still be coming to work would "be focusing more on the very essential functions to keep cargo moving," he said, answering questions from the field, for instance.

The Office of Trade Policy and Programs is still working on implementing the continuing education final rule (see 230622003), and Lord told NCBFAA members that he isn't concerned if the initial number of credits required to have been completed by February 2027 is far less than 36. "It’s about how quickly can we get accreditors in place with a structure that’s reasonable for you all, and then let’s come up with a number that makes sense," he said.

Lord is also responsible for ACE 2.0, which he said he gets lots of questions about -- and he acknowledged he still has a lot of questions about it.

He said development for ACE 2.0 won't start any earlier than fiscal year 2025 -- which begins in the last quarter of 2024 -- and he added, "I personally think that’s a little optimistic."

He said CBP is focused on "leveraging global standards of interoperability" in the updated ACE.

This aligns with what CBP is being told to do -- uncover compliance problems far back in the supply chain,

Lord, who had joked at the beginning of his speech that he introduces himself as "the guy that oversees a lot of things, but not forced labor," said that the need to have visibility deeper into supply chains is about forced labor, but not just forced labor.

He said CBP is going to need to know when steel or aluminum derivatives are imported, if metals used in those fabrications were produced in the country of origin of the goods, or if they were either melted and poured or smelted or cast elsewhere.

He noted that there's a bill called the Forest Act that would require importers of palm oil, soybeans, leather and beef, or cocoa to exercise reasonable care that the products they are bringing in were not produced on illegally deforested land (see 2110070050).

"So we think forced labor’s hard," he said.

He said he mentions these issues to say that the zeitgeist has changed in trade, from a push to lower tariffs to "fair trade."

"The idea now is trade upholding the values that we hold dear as Americans and protects U.S. businesses from unfair competition," he said. "This is the challenge of our time."

He said 11 customs brokerages are participating in a Global Business Identifier pilot, and two more are in the process of coming on.

He said the pilot has become "our first step at trying to collect something that helps us see with reliability further back into the supply chain." He said it's just a first attempt, and CBP needs suggestions on how to achieve the goal. He added: "We don't have all the answers."