Commissioner Kerlikowske’s Remarks to the National Customs Brokers & Forwarders Association of America, Inc. (NCBFAA) Government Affairs Conference
Remarks as Prepared: Sept. 13, 2016
Thank you, [NCBFAA President] Geoff [Powell]. I’d also like to thank Megan Montgomery, the Association’s new Executive Vice President … Megan, congratulations, and thank you for putting together such a stellar event.
Yesterday, you heard from several CBP trade experts, and all of these folks play invaluable roles in shaping CBP’s trade facilitation and trade enforcement efforts. As we approach the end of my tenure as Commissioner, I want to highlight the tremendous progress we’ve made over the last two and half years, and describe the future vision for CBP.
As we look to future challenges facing CBP, including our security and facilitation missions, there’s no question that engagement with our business and trade stakeholders – brokers and forwarders, in particular – are key to success. That collaboration has enabled us to better situate CBP and industry for that future.
Executive Assistant Commissioner Brenda Smith noted yesterday that we’ve made significant progress on the implementation of ACE and single window filing capabilities. Due in no small part to the insight, feedback, and contributions of NCBFAA and your members, we are on track to meet the President’s year-end 2016 goal for completion of the Single Window.
We recently reached milestones in July and August, and based upon your input, we have added flexibility to our October goals. Working together, CBP, our Partner Government Agencies, and members of the trade community have already transformed the way our country conducts trade, with 100% of electronic filings now being processed by ACE.
I want to thank the NCBFAA for its leadership in helping the trade community at large make this transition with us and our PGA colleagues. We’ve made significant progress – but there is still work to be done before the full implementation of ACE. After the deployment of core trade processing capabilities, we will look to make continued enhancements to ACE.
And the Border Interagency Executive Council (BIEC) will be critical to the long-term governance of the Single Window, enabling us to work with PGAs and the trade to decide how to devote our resources to keep this system moving forward.
Looking beyond our borders, CBP has initiated an extensive dialogue with the governments of Canada and Mexico on a proposed North American Single Window (NASW) Approach. In collaboration with our Canadian and Mexican counterparts, we’ve proposed a common vision statement focused on aligning cargo processing in the region.
Additionally, CBP has established a targeted Single Window implementation roadmap that proposes a phased international engagement strategy for 2016-2019. We’ve provided views and experiences on Single Window in a variety of international settings, including the World Customs Organization (WCO), Asia Pacific Economic Cooperation (APEC), the International Maritime Organization (IMO), and elsewhere. This type of international engagement is essential to securing global supply chains and facilitating lawful commerce.
The tremendous growth in the volume and complexity of trade requires increased cooperation among customs authorities to detect, deter, and disrupt networks engaging in illicit trade.
Traditional trade fraud schemes – activities such as transshipment and undervaluation – are becoming more difficult to detect and prove without tracing the goods back through the supply chain.
And relatively new trade fraud schemes – such as identity theft and trade-based money laundering – pose risks not only to U.S. national security, but also to that of our closest trading partners.
Increased information sharing among customs agencies – through an International Customs Network, for example – would facilitate global enforcement, improve risk management, and help stem the proliferation of illicit trade.
Another example of our global engagement is the World Trade Organization Trade Facilitation Agreement (TFA), which could increase global merchandise exports by up to $1 trillion per year.
Because of its profound potential benefits, the U.S. is playing a major role in supporting the TFA and its implementation in internationally.
CBP is also active in the World Customs Organization (WCO). This past July, I led a delegation of CBP officials to Brussels to attend several meetings, including the WCO’s 75th Policy Commission Session, the Border Five Heads meeting, and numerous bilateral meetings. These events let us share best practices on an international scale while strengthening CBP’s international partnerships.
The passage of the Trade Facilitation and Trade Enforcement Act (TFTEA) earlier this year was a real milestone for us. TFTEA emphasized CBP’s trade enforcement responsibilities in key areas, including the protection of intellectual property rights, anti-dumping/countervailing duty evasion, and forced labor-derived goods.
TFTEA is the first comprehensive authorization of CBP since the creation of the Department of Homeland Security in 2003. Specifically, the new law:
- Extends funding for Automated Commercial Environment (ACE) through 2018;
- Recognizes and validates our efforts to expand the Centers of Excellence and Expertise;
- Modernizes drawback, simplifying the process for duty refunds and increasing efficiencies for trade stakeholders;
- Establishes key aspects of our organizational structure including the Executive Assistant Commissioner positions – including those now held by Brenda Smith for Trade and Todd Owen for Field Operations.
One important aspect of TFTEA – the elimination of the consumptive demand exemption – deserves additional comment. Goods made with indentured, convict, child, or other forced labor are no longer allowed into the country just to meet U.S. demand. This year, I’ve already signed Withhold Release Orders on several shipments from China, involving soda ash, calcium chloride, potassium products, and Stevia and its derivatives.
It’s imperative that companies examine their supply chains to understand product sourcing and the labor—and brokers can play a key role in amplifying this message to your customers.
We’re committed to ensuring that our American values outweigh economic expediency, so CBP will ensure that products made with forced labor do not cross our borders and that American businesses and workers don’t have to compete with businesses profiting from forced labor.
Finally, a word about eCommerce, which, as you all know, is fundamentally altering many aspects of the global supply chain. Since 2011, annual growth of eCommerce has exceeded 10 percent per year – with projections showing that by 2018, eCommerce will account for $414 billion in sales, or about 11 percent of all U.S. retail sales.
eCommerce lets small and medium-sized businesses compete on a global scale on what is, essentially, a seamless, border-free platform. At the same time, however, eCommerce presents new challenges for trade enforcement – uncharted territory.
CBP must continue to ensure safe and legitimate trade in eCommerce goods that comply with U.S. trade laws. We must make sure that our risk-based enforcement mechanisms align with U.S. consumer and industry expectations of low costs and rapid, efficient import and export processes.
As CBP and our partner agencies adapt to these realities and the new challenges eCommerce brings, we rely on brokers and forwarders to provide the insight and guidance we need to effectively modernize our policies and programs.
In closing, I want to thank the NCBFAA for inviting me here today. Obviously, as we move into the home stretch of this very “unique” election cycle, the transition to a new Administration is foremost on our minds. There are certainly some questions that we can’t answer yet.
- What will new Department leadership look like?
- Will DHS priorities shift towards or away from any of CBP’s stated operational or enterprise goals – and, if so, how?
- How will the new Congressional landscape affect ongoing policy reform efforts and budgetary concerns?
There are certain things that remain constant, however – and that’s our mission – and as complex and far-reaching as that mission is, it’s not going to change. Nor will our need for industry’s help – including that of the broker community – in making sure we do the very best job we can for the American people.
No single company, customs service, or law enforcement agency sees the complete picture of every facet of the supply chain. That’s why it’s imperative that we coordinate with our trade stakeholders and our international partners to ensure that the supply chain stays secure and efficient.