Commissioner Kerlikowske’s Remarks at the Annual Safety and Risk Mitigation Summit
Remarks as prepared for February 19, 2016
I’m delighted to be here in Tampa – and back in my home state of Florida – particularly in February! I’d like to thank Port Tampa Bay for hosting this event.
I’ve been asked to talk about how CBP protects our homeland while ensuring that lawful cargo continues to move in and out of the country.
That balance – national security and economic security – isn’t an easy one, but it’s a balance that I think we’ve mastered – and I am happy to get this opportunity to explain how we do it. And it’s a balance that is particularly important to stakeholder communities served by Port Tampa Bay, which handled more than 36 million tons of cargo in Fiscal Year 2014. On the passenger side, Port Tampa Bay is one of the top 8 U.S. cruise ports, handling nearly 900,000 passengers each year.
I know we have a diverse group of people here today – everyone from first responders to business leaders. For those of you who might not be that familiar with CBP, let me briefly summarize our mission – and to highlight CBP’s commitment to all of you.
That commitment is: To ensure the integrity and security of our borders and of the global supply chain through effective enforcement; to facilitate the flow of lawful goods and people in and out of the country.
So, our mission is exceptionally broad and complex.
In FY 2015, CBP processed more than $2.4 trillion in trade. CBP also processed approximately 33 million imports (entries) and collected approximately $46 billion in duties, taxes, and other fees. That’s the highest amount collected in the last five years. Special programs and Free Trade Agreements represented approximately 27 percent of total U.S. imports, by value, with the North American Free Trade Agreement leading the way. Duty collection remains a CBP priority, and the agency collected more than $37 billion in duties in FY 2015, an increase of 6.6 percent from FY 2014. CBP processed more than $1.5 trillion worth of U.S. exported goods.
Florida, in fact, is home to more than 61,000 exporters – the second-highest number in the United States – and exports from Florida alone totaled nearly $60 billion in 2014.
On the inbound side, CBP processed more than 26.3 million imported cargo containers through the nation’s ports of entry – an increase of 2.7 percent from FY 2014.
As we continue to meet these demands, CBP is preparing to meet the growth predicted for the coming years.
With 90 percent of the world’s trade now being transported in cargo containers – and nearly half of the incoming U.S. trade arriving in maritime containers – your business is our business.
First I’d like to talk about homeland security and how the trade enforcement side of our mission is protecting our economy and American businesses and consumers.
We cannot overlook CBP’s core law enforcement and national security missions, stopping terrorism, smuggling, theft, fraud, and other criminal activity that jeopardize the security of the supply chain – and therefore our national and economic security.
CBP has robust trade enforcement capabilities, including import safety mechanisms, anti-dumping and countervailing duty measures, and intellectual property rights protection. CBP works collaboratively with other agencies to ensure import safety and to protect the security of the supply chain and – ultimately – American businesses and their customers. For example, as a multiagency “fusion center,” the Commercial Targeting and Analysis Center (CTAC) targets commercial shipments that could pose a threat to the health and safety of American consumers.
CTAC is composed of 11 federal government agencies who have a shared interest in the prevention, preemption, deterrence and investigation of violations of importation laws that affect U.S. interest in the import safety environment. In FY 2015, CTAC initiated 368 seizures of unsafe imported products with a gross Manufacturer Suggested Retail Price (MSRP) of $24 million. This represents a 107 percent increase in the number of CTAC-initiated seizures over the previous fiscal year.
A recent example of a product that may pose serious health and safety hazards to people who buy and use them are substandard and counterfeit hoverboards and components. There are worldwide reports of fires possibly caused by faulty batteries within some hoverboards. In addition, this threatens our economic security by hurting legitimate businesses who invest significant amounts of resources into development and protecting their brands. To date, there have been 245 hoverboard seizures, totaling more than 63,000 pieces, with a MSRP of $24.7 million. Hoverboard seizures have been recorded in 42 different ports of entry.
Another trade enforcement priority for CBP is in the field of Antidumping and Countervailing Duties (AD/CVD). In FY 2015, $10.1 billion of imported goods were subject to AD/CVD, and CBP collected $1.2 billion in AD/CVD deposits. Furthermore, CBP and our sister agency within the Department of Homeland Security – U.S. Immigration and Customs Enforcement – seized commodities shipments with a domestic value of more than $5 million for violations of AD/CVD. In addition, 92 CBP audits of importers of AD/CVD commodities identified $69 million in AD/CVD discrepancies with $5.4 million collected to date.
CBP also enforces Intellectual Property Rights (IPR) – most visibly by seizing products and infringe on trademarks, copyrights, and patents. The theft of intellectual property and the trade in fake goods – everything from fake Super Bowl jerseys, counterfeit jewelry, and toys to handbags, electronics, and pharmaceuticals – threatens America’s economic vitality and national security. This kind of commerce in illicit goods also funds criminal activities and organized crime. Closer to home, it jeopardizes the health and safety of consumers.
To combat these threats, CBP has developed a multi-layered, strategic approach to IPR enforcement.
In addition to seizing goods at U.S. borders, CBP audits the business records of companies at high risk for importing counterfeits, issues penalties for infringing goods uncovered in the audits, and works with companies to improve their internal controls. We collaborate closely with our trading partners, and we partner with industry and other federal agencies to enhance these efforts. CBP also issues civil fines and, where appropriate, refers cases to other law enforcement agencies for criminal investigation.
Just as counterfeiters use new technologies to their advantage, CBP uses technology to increase interdiction of fake goods, facilitate partnerships with industry, and enhance enforcement efforts through the sharing of information and intelligence.
CBP is refining its risk modeling technology to more accurately identify suspected shipments of counterfeit and pirated goods for inspection.
What can businesses do to help protect themselves?
Rights holders can use our web-based tool, e-Recordation, to record their trademarks and copyrights with CBP. Recordation makes information on protected rights available to CBP ports and offices throughout the United States. Our online trade violation reporting system, e-Allegations, makes it easier for the private sector to notify CBP of possible IPR violations and other trade violations.
CBP is a partner at the interagency National Intellectual Property Rights Coordination Center (IPR Center). The IPR Center’s mission is critical to the U.S. economy and to national security. The Center brings together 23 agencies (including 19 Federal agencies), Interpol, Europol, and the governments of Mexico and Canada in a task force setting. Technology has magnified and multiplied the threats to border security, national security, and U.S. stability. The IPR Center has kept pace, using technology to stay ahead of trends and to enhance investigation, outreach, and training to strengthen enforcement. In fact, CBP provides more referrals to ICE-HSI for criminal investigation than any other agency.
Now I’d like to turn to the other side of the coin in terms of our mission: facilitating lawful trade.
As many of you know, President Obama called for the completion of a “single window” by December 2016—allowing businesses to electronically transmit data required by the U.S. Government to import or export cargo.
Automated Commercial Environment – or ACE – is the system underpinning the Single Window. ACE streamlines processes for industry and government by going “paperless,” streamlining trade for industry and government by replacing paper-based processing and legacy system requirements with faster, more modernized, and more cost-effective electronic submissions.
Federal agencies will have earlier, automated visibility to shipment data, expediting their import or export assessments at the border and speeding the flow of legitimate trade.
CBP made tremendous strides in FY 2015. One example is the deployment of electronic bond capabilities – “E-Bonds” in ACE. This enables the electronic filing and processing of single transaction and continuous bonds and streamlining a process that has historically been entirely manual and paper-based. Time for processing these bonds has been reduced in many cases from days to minutes.
Consistent with the President’s Executive Order on Streamlining the Export/Import Process for America’s businesses, CBP, working with the Census Bureau, has integrated AESDirect into ACE, thereby eliminating the need to maintain two data collection systems for exports. This boosts efficiencies, streamlines trade, and reduces costs.
I also want to emphasize the importance of Partner Government Agency capabilities – or PGAs. CBP will continue its partnerships with industry and Partner Government Agencies in FY 2016 to realize full ACE implementation by December 2016.
February 28, 2016: CBP will begin limiting technical and customer support for the legacy ACS system, a necessary step to focus critical resources in support of the new system, ACE.
March 31, 2016: APHIS (Lacey Act) and NHTSA electronic filings will be in ACE along with certain entry summary types for CBP. The legacy system, ACS, will no longer be available for these specific transactions.
May 28, 2016: ACE will also become the required system for electronic filing of certain CBP entry types (cargo release). This new date aligns with recommendations from industry partners and provides additional time to transition to cargo release filing in ACE.
Through Summer 2016: ACE will become the primary system for electronic filing for remaining PGAs.
And I can’t stress enough how important it is to participate in the pilots operating with our PGAs, allowing us and our partner agencies to more fully test the system in advance of our deadlines.
CBP’s entire leadership team will continue to work with trade stakeholders to ensure that the transition to ACE is completed as efficiently as possible.
Our latest steps to secure the supply chain and facilitate trade include: Pushing our borders outward through international agreements; expansion our Container Security Initiative; continued growth in our Air Cargo Advanced Screening initiative, or “ACAS”; conducting a pilot at four seaports for C-TPAT Sea Carriers and automation of maritime forms, simplifying the process for vessel documentation.
CBP recognizes how important our engagement with other Customs administrations is to our nation’s competitiveness.
That’s why I am so pleased that Ana Hinojosa, Deputy Assistant Commissioner of CBP’s Office of International Trade, was elected to a position in the World Customs Organization and started serving in that leadership role in January. Ana’s election to the post of Director of Compliance and Facilitation is a positive development for CBP, for our trade stakeholders, and for the nation.
CBP is also working internationally to build upon the 10 Mutual Recognition Arrangements, or MRAs, we have already signed. MRAs are key to coordinating supply chain security programs like the Customs-Trade Partnership Against Terrorism (C-TPAT), helping secure benefits for C-TPAT members across the globe. C-TPAT, which today has nearly 11,000 members, has become the world’s standard.
And we’re taking it a step further.
CBP’s Trusted Trader Pilot, tests a streamlined approach connecting supply chain security and compliance for companies with strong track records in both. Fifty-six importers volunteered to be part of the pilot, and CBP selected 9 of those companies. Once we’ve completed the trade compliance validations for all 9 companies, we’ll review the process to determine best practices and identify efficiencies that can be expanded to more companies.
CBP also ensures supply chain security through its Container Security Initiative, or CSI, started in 2002. Teams of CBP officers work with our counterparts at those foreign ports to target and examine high-risk cargo before it ever makes it onto vessels destined to the United States. Using intelligence and automated data, CBP identifies containers that pose a risk for terrorism. We then use X-ray scanning, radiation detection, and other technology to pre-screen containers that are deemed risky at ports of departure before they make their way to U.S. ports.
CBP’s 60 operational CSI ports in 35 countries on six continents prescreen more than 80 percent of all maritime containerized cargo imported into the United States. The CSI program ensures greater security through collaboration and it fosters information sharing between customs administrations. But the best thing about CSI for you and your companies is that CSI saves everyone time and money.
If CBP had to conduct these inspections here in Tampa, importers would have to pay as much as $2,500 per exam. These costs are considerably lower overseas at CSI ports – and sometimes they are even borne by the host government.
We also have our Air Cargo Advanced Screening (ACAS) program. CBP developed ACAS following a terrorist plot in October 2010 that involved explosives concealed on U.S.-bound aircraft from Yemen. CBP and TSA collaborated with the private sector to identify strategies to strengthen air cargo supply chain security.
Trade partners under the ACAS umbrella provide pre-departure shipment information to CBP and TSA for joint analysis early in the supply chain. The advance screening air shipment date prior to departure adds an important layer of security to our private sector partners, enhancing our ability to secure air cargo destined for the United States.
Through ACAS, we’ve screened 297 million shipments, subjecting more than 3.2 million – or just over 1 percent – to further review. Last July we extended the ACAS pilot for an additional 12 months.
And in October, we started a pilot for C-TPAT sea carriers called Advanced Qualified Unlading Approval Lane, or AQUA Lane. This pilot will test an expedited clearance system for sea carriers that qualify, allowing immediate unlading upon arrival at four seaports— Baltimore, Port Everglades, New Orleans and Oakland.
In closing, I want to emphasize that our mission is vital to our country’s national and economic security – here in Tampa, on the East Coast, nationwide, and around the world.
This conference and expo is a terrific opportunity for us to connect and exchange ideas on how we can improve our operations.
Our partnership with all of you is of tremendous importance to our competitiveness on the global commerce playing field.
U.S. Customs and Border Protection is the unified border agency within the Department of Homeland Security charged with the management, control and protection of our nation's borders at and between the official ports of entry. CBP is charged with keeping terrorists and terrorist weapons out of the country while enforcing hundreds of U.S. laws.