Last week 40 delegates from all 5 of the West Coast Broker and Forwarder Associations gathered in Washington DC for the annual Pacific Coast Council (PCC) Mission to DC. This year’s mission focused heavily on the current ACE Core completion and the future application of the Trade Enforcement and Trade Facilitation Act.
Assistant Commissioner Brenda Brockman-Smith opened an extensive meeting with the PCC delegates delivering a clear message; the agency is a quiet and effective part of this administration’s agenda. Smith introduced the Trade 2020 Strategy. This four-part strategy focuses on; secure trade lanes through trusted trader and other vetted programs, next generation facilitation (i.e. legislation for automation), intelligent trade enforcement utilizing predictive analytics to facilitate legitimate trade and resource optimization.
A recap of topics discussed follows:
ACE Completion: CBP regards ACE as complete and no further development is planned at this time. CBP is aware that the trade has identified key functionality that ACE does not accommodate. To assure those needs are met, the trade must communicate to those who make the funding decisions that ACE is a good investment and that CBP needs a predictable funding stream.
Drawback: CBP successfully transitioned Drawback entries to ACE last week. The proposed regulatory updates to Drawback, as outlined in the Trade Facilitation and Trade Enforcement Act (TFTEA), are currently under review by the Treasury Department. These regulations are not anticipated to be complete before February 22, 2019, stalling implementation of advanced payments for drawback filers.
Post-Core ACE: In the absence of funding, CBP is generating a list of capabilities to support Trade Facilitation and Trade Enforcement Act (TFTEA) regulations. At the top of this list is programming to support low value entries (Section 321). The post-core ACE will continue to need the support of the Border Interagency Executive Council (BEIC) which facilities cooperation between CBP and Participating Government Agencies.
Trade Facilitation and Trade Enforcement Act (TFTEA): The TFTEA legislation from 2016 mandated several changes to CBP regulation. The new importer of record (IOR) program is not ready. Customs Form 5106 is a priority for CBP who will also be looking at cleaning up the IOR numbers on file with CBP. TFTEA provided for certain data elements that all importers must provide to their Customs Brokers. These criteria points are not available yet, but it was indicated that they will not exceed what most diligent Customs Brokers already do for importer vetting processes.
Enforcement Policy/ Forced Labor Division: To date, 7 shipments have been seized for North Korean Forced Labor Violations. Importers are encouraged to familiarize themselves with CBP’s resources on Forced Labor (found here). Importers should focus on internal control processes that demonstrate their suppliers are inspected and proof of these inspections should be kept on file. It is important to identify non-compliance and demonstrate that corrective action has been taken. Manufacturer/vendors that have been found in violation of the Forced Labor standards will be posted on the CBP website. The Department of Labor posts products and countries where high risk labor practices have been identified.
Centers: The Centers continue to focus on the national account management perspective. They are working on uniform enforcement and a layered approach for targeting and threat analysis. The goal is to increase import compliance and decrease duplication of efforts. The trade was offered a group e-mail that is monitored at HQ for issues that may impact more than one Center or Import Specialist within a Center. (CEE@cbp.dhs.gov)
Export Post Departure Filing: There has been progress made on post departure Electronic Export Information (EEI) filings. For those export commodities that are not subject to ITAR or BIS licenses and for those exporters with an Export Compliance Management Program (ECMP) in place the exporter may apply to be part of the post departure program. Further details and guidance from CBP is expected.
Auto Exports: CBP is trying to automate the process for Self-Propelled Vehicles that have VIN/Serial Numbers. CBP is also working to integrate into the Department of Transportation system in hopes to better identify stolen vehicles. Again, further details and guidance is expected from CBP.
Federal Maritime Commission (FMC): The group met with Commissioner Rebecca Dye and then Acting Chairman Michael Khouri. As there are only 3 FMC Commissioner seats filled right now, no two commissioners can meet jointly without the Sunshine Act going into effect. Both Dye and Khouri stated it is more difficult to get things done now with only three than it was with five. The conversation focused on unfair demurrage/detention charges, terminal operation practices, freight forwarder brokerage commission, concern for ILA contract negotiation, ocean-carrier alliances, and fewer ocean carriers in general. The group was not given any hint of what may happen next. The group was able to share with Khouri what they believe the FMC should do with regard to the demurrage/detention issue.
FDA Entry Data: John Verbeten, Director of Import Operations, shared key updates from the FDA.
FDA is beginning an initial pilot of 9 filers for the new Filer Evaluation process. The intent of the new Filer Evaluation will be to increase collaboration and provide better communication. The process, as explained to the PCC delegation, includes on-site visits where FDA will show credentials and meet with the most responsible person at the site. There will be opportunity for communication and a written record of the meeting. The evaluation report will be written up after the evaluation and discussed with an FDA supervisor. If official action is recommended, there will be a secondary level of review. FDA will still review the same data elements; ACE additional data elements are not yet part of the Filer Evaluation. The new filer evaluation process is expected by the end of 2018.
Filers should use ITACS to upload documents and update exam notification as this creates a time stamp and provides FDA with metrics. Electronic notices via Document Image System (DIS) are not yet ready and development should not be expected in the near term. FDA would like to be able to allow for changes on an entry, but the electronic mapping is extremely difficult. The current change process is that FDA (port level) writes a letter to advise CBP it is acceptable to cancel entry where shipment has not received a May Proceed. FDA would support entry correction when a port changes if the entry has a May Proceed status, but the system does not allow, and they found sometimes entries were removed to avoid holds.
The Foreign Supplier Verification Program (FSVP) is considered the “linchpin” of the Food Safety Modernization Act (FSMA). To date, FDA has done close to 400 FSVP inspections and are in an “educate while we regulate” stage which should continue for 2 more years.
On March 19th the “Small Supplier” exception expires. Small firms will no longer be exempt, and Customs Brokers can no longer transmit code “FSX” in place of the FSVP importer’s DUNS number. Similarly, transmitting “UNK” as the FSVP importer’s DUNS number will be most likely to generate a hold message. UNK will remain available for a short period of time. FDA will publish FSVP Importer list based on Informative Disclosure Rule.
The Voluntary Qualified Importer Program (VQIP) is a Trusted Trader program for food importers only. Importers can apply to participate and foreign suppliers will be subject to third party inspection. As a benefit to participation in the program, food importers will see fewer FDA exams. The VQIP program will be a user fee-based program estimated at $17,000 - $18,000 a year. The application is good for 3 years and the fee is paid annually.
The tariff numbers for fluorescent lights (8539.31.0040, 50, 60, 70) are subject to FDA as radiation emitting device, an Affirmation of Compliance (AoC) is NOT required. Note this tariff number is not flagged for FDA but the FDA product code can be built on the Product Code Builder.