While U.S. Customs and Border Protection’s basic responsibilities with regard to cross-border trade—security, enforcement and facilitation—remain unchanged, the agency’s leadership is now looking to the road ahead in terms of managing future trade growth, as well as changes.
Brenda Smith, executive assistant commissioner for CBP’s Office of Trade, told attendees of the East Coast Trade Symposium on Tuesday, that that road over the next three to four years will consist of four distinct lanes, with the agency’s basic responsibilities serving as the “guardrails.”
Those four lanes will focus on:
• Secure trade lanes, which prioritizes efforts CBP makes to protect against high-risk goods moving into and out of the United States;
• Next-generation facilitation, which looks at opportunities for deregulation and new business models, or what the CBP is calling a move toward an updated 1993 Customs Modernization Act, or “Mod Act 2.0”;
• Intelligent enforcement, which calls on CBP to integrate its resources and apply them to enforcing trade laws and regulations;
• And resource optimization, which focuses the agency’s attention on getting the best value for the U.S. dollar, and determining what level of resources CBP needs and at what level and how its stakeholders are willing to invest in the agency.
“Over the last seven to eight years, we have been working with you, through our conversations with COAC (Commercial Customs Operations Advisory Committee) members and the hundreds of people participating in various COAC working groups to implement and evolve the ideas we identified as part of trade transformation,” said Smith. “We have made a great deal of progress, while at the same time recognizing that some things didn’t take, or were overtaken by events or unexpected changes in the supply chain.
“However, through our conversations with you, and a great deal of internal discussion about matching our responsibilities (security, enforcement and facilitation) with opportunities, we’ve identified those areas which we think we are equipped to move forward in, and investments in specific initiatives will pay off,” she added.
Smith explained that CBP’s secure trade lanes efforts should include aspects such as building a trusted trader program and leveraging the “single window automation and coordinated operational approach for imports and exports. The secure trade lanes should also include the exploring technology to “pre-empt questions around authentication – be it the identity of a business entity, the country of origin, or the intellectual property used in production,” as well as enhancing security around e-commerce supply chains, she said.
For the next-generation facilitation, Smith said it’s important for CBP to work on the legal framework to help realize the full benefits of trade facilitation for the U.S. economy.
“We want to take full advantage of our current opportunity to reduce regulation, while being committed to ensuring transparent requirements and clear guidance,” she explained. “We also recognize that we need to address CBP’s role in facilitating exports for all businesses, whether they are large corporations or solo entrepreneurs working out of their garage, and it needs to provide a legal framework flexible enough to accommodate today’s changes resulting from e-commerce and the next rounds of changes resulting from the innovation and disruption of traditional business models.”
In terms of the proposed intelligent enforcement lane, the 2015 Trade Facilitation and Trade Enforcement Act (TFTEA) and recent Executive Orders from President Trump have given CBP new authority to be more effective at taking on “complex and often deeply hidden methods of illicit trade,” such as evading antidumping and countervailing duties or using forced labor in the manufacturing supply chain, Smith said.
She recommended that achieving this level of enforcement should include an integration of resources, authorities and knowledge across the U.S. government, including working closer with sister agency Immigration and Customs Enforcement, as well as the Justice Department and using Treasury Department sanctions to go after violators.
“We also know that the information we gather is a powerful tool, and that analyzing that information more carefully with an eye toward future violations or seeing a pattern will help us narrow in on who is violating the law,” Smith said. “Once we have identified those violators, we need to get better at delivering consequences.”
She noted, however, that some companies look at repeat seizures or mitigated penalties as “a cost of doing business.”
“We are looking to leverage the range of our enforcement authorities, and the account-based expertise of the CEEs (Centers of Excellence and Expertise), to make the cost of repeat or egregious violations or non-compliance high enough to deter illicit trade,” Smith said.
With regard to the fourth lane—resource optimization—Smith said, “We’ve done our homework.” She highlighted that for every dollar invested in CBP trade personnel, the U.S. economy receives an $87 return. This may result from such activities as lower trade costs, leveling the playing field for domestic industry against imports, and protecting intellectual property.
Smith said it’s important that CBP makes a strong business case to its stakeholders about these return on investments in the agency. “New investment is tough to come by,” she added.
“Our four-lane highway will have a lot of activity on it, but we think it is critical to be as effective as we can be with our current tools, programs and resources and look ahead to see what additional authorities and resources we need to get us where we want to be 10 to 20 years from now,” Smith said.
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