Commissioner Kerlikowske's Remarks at the CONECT Conference
Remarks as prepared for April 13, 2016
I’m pleased to be here in Newport – so important to colonial trade and one of our nation’s earliest epicenters of American capitalism.
Today, I’d like to provide a brief update on CBP’s trade facilitation and enforcement mission, and our partnerships with you.
As most of you know, CBP has an incredibly complex mission: facilitating lawful travel and trade while securing our borders and the global supply chain.
On a typical day, CBP screens more than 70,000 truck, rail, and sea cargo containers at our 328 ports of entry.
In FY 2015, CBP processed more than $2.4 trillion in imports – 26 million cargo containers.
CBP also processed more than $1.5 trillion worth of U.S. exports, the speed of which is a key for international customers of U.S. goods.
We also collected approximately $46 billion in duties, taxes, and other fees.
And all of these numbers are expected to grow in the coming years.
With 90 percent of the world’s trade now being transported in cargo containers, we know that our port operations are crucial to keeping the engine of our economy running smoothly.
So now let’s look at how we help do that: trade facilitation; trade enforcement; partnerships; and improvements in staffing.
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.
The 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 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’s Customs-Trade Partnership Against Terrorism (C-TPAT) helps secure benefits for C-TPAT members across the globe.
Today, with more than 11,000 members, C-TPAT has become the world’s standard.
In fact, C-TPAT imports account for about 54 percent (by value) of all imports to the U.S.
Since 2007, C-TPAT has signed a total of 11 Mutual Recognition Arrangements (MRA) with other countries’ similar programs, driving use toward clearer international cargo security standards.
CBP also ensures supply chain security through its Container Security Initiative, or CSI, started in 2002.
Using intelligence and automated data, CBP identifies high-risk cargo and we work with our foreign counterparts to inspect it before it’s loaded onto U.S.-bound vessels.
CBP has 60 operational CSI ports, in 35 countries, on six continents, and they prescreen more than 80 percent of the maritime containerized cargo imports.
If CBP had to conduct these inspections in the U.S., importers might 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’ve reached an important milestone regarding our Centers of Excellence and Expertise, which align our post-release trade processing by industry sector under an account-based framework.
I’m pleased to announce that all 10 Centers are now fully operational.
This extraordinary shift in the way we do business reduces transaction costs, increases uniformity and consistency, improves compliance with import laws and enhances trade enforcement.
CBP also works together with our stakeholders through public-private partnership programs authorized by Congress.
For example, our Reimbursable Services Program allows CBP to work with our partners to provide services beyond what would otherwise be possible in the air, land, and sea environment.
We recently concluded the FY2016 Open Season Application Period (Feb. 1-29), and we tentatively plan to hold another application period next February.
Now, I’d like to talk about how the trade enforcement side of our mission is protecting American businesses and consumers.
Probably the most significant development is the Trade Facilitation and Trade Enforcement Act, signed into law on February 24.
This law is the first comprehensive authorization of CBP since DHS was created 13 years ago, establishing a modern foundation for the agency’s mission to safeguard economic and national security.
This law supports CBP’s efforts to ensure a fair and competitive trade environment, sending a strong message that CBP will effectively enforce U.S. trade laws in key areas, including intellectual property rights, antidumping/countervailing duty evasion, and forced labor-derived goods.
The law also authorizes several critical CBP programs and lays a strong foundation for many of our most vital initiatives.
And it’s probably one of the most important pieces of trade legislation in a generation.
Let me summarize a few key aspects of the legislation and explain its impact on CBP’s organization and operations.
The law provides CBP with new tools to better enforce intellectual property rights and antidumping countervailing duty laws. In FY 2015, $10.1 billion of imported goods were subject to AD/CVD, and CBP collected $1.2 billion in AD/CVD deposits.
It creates a process for swift and thorough investigation of allegations of AD/CVD evasion, bolstering CBP’s expanded targeting, investigation, and prevention efforts in this area.
It enhances targeting and increased bonding for high risk imports;
The law provides mechanisms to supplement IPR enforcement, enhancing CBP’s collaboration with IP rights holders, interagency targeting through the IPR Center, and international partnerships to stop counterfeiting at the source.
It eliminates Consumptive Demand Exemption/Forced Labor. Effective March 10, goods made with indentured, convict, forced labor – including child forced labor – are no longer allowed into the country just to meet U.S. demand. Although the new provision is already being enforced, we will also be revising our regulations to update the petition process through which we receive allegations regarding imports made with forced labor. Recently, I have signed Withhold Release Orders directing the detention of goods suspected of being made by forced labor. We are committed to vigorously enforcing the legal prohibition on the importation of goods manufactured with forced labor, and will do our part to ensure that products entering the United States were not made by exploiting those forced to work against their will, and to ensure that American businesses and workers do not have to compete with businesses profiting from forced labor.
For example, CBP recently blocked a shipment of Chinese soda ash – suspected of being made with forced prison labor – from entering the United States. Soda ash is a raw material of vital importance to the manufacture of so many products – from glass products, soaps and detergents to insulation and televisions.
I want to re-emphasize that CBP is serious about enforcement.
We’ll be clarifying standards/process tor reviewing petitions – and we welcome input from industry and NGOs.
I urge industry to be proactive in evaluating their supply chains.
Effective March 10, the de minimis value for an imported shipment increased from $200 to $800. This was long overdue and of major significance to many importers. CBP has made the needed changes in ACE and we’re training field personnel. This change will save you money, exempting low-value shipments from certain duties and taxes.
The law authorizes continued funding for operations and maintenance of ACE – which, as I described earlier, is the backbone of the U.S. Government’s “Single Window.” As we continue to drive toward the President’s year-end 2016 goal for completion of the Single Window, continued funding will ensure that ACE and the Single Window are fully supported over the long term
The law formally recognizes the Centers of Excellence and Expertise and the importance of these Centers to modernizing and consolidating operations by industry sector, generating expertise that also improves CBP’s enforcement capabilities.
The law also simplifies and modernizes the drawback process for duty refunds – making drawback more workable for CBP while increasing efficiencies for trade stakeholders.
It enhances COAC within DHS, increasing involvement from our Immigration and Customs Enforcement (ICE)/Homeland Security Investigations (HSI) and recognizing the value of our industry advisory committee in improving CBP’s trade operations and policies.
On the travel and security side, the law also improves funding mechanisms and support CBP’s Preclearance efforts, better positioning us to push our borders outward and increase locations around the globe to meet our goal of processing 33 percent of U.S.-bound air travelers through Preclearance by 2024.
I also want to emphasize CBP’s commitment to collaboration – because we know how powerful partnerships can be.
We work closely with the trade and travel industries, other federal government agencies, and our international partners to ensure the safety and the efficiency of the global supply chain.
For example, we host several meetings a year for the Commercial Operations Advisory Committee (COAC) and we include other government agencies – bringing key players to the table for candid discussions.
We also participate in the Border Interagency Executive Council (BIEC), bringing together senior leaders to examine and improve the import/export process across the U.S. government.
Finally, we are eager to share our experiences with our foreign counterparts so that we all can benefit from better aligned policies.
To that end, CBP is a key leader within the World Customs Organization (WCO).
The WCO’s 179 other member nations show considerable interest in CBP’s initiatives and policies, and I’ve sought out opportunities to engage with our WCO partners.
I am also proud that Ana Hinojosa, former Deputy Assistant Commissioner of Trade, now holds the Compliance Director Chair – that’s a big “win” for CBP and for U.S. commercial interests.
Finally, a brief word about frontline recruitment and hiring challenges.
We know that we can’t serve our stakeholders without proper staffing.
We’ve established a National Frontline Recruitment Command (NFRC), and we are currently on track to host more than a thousand recruitment events nationwide this year.
A key effort is our traditional and military hiring hub pilots, through which we have reduced time in the hiring process by over 60%.
And we’re committed to attracting women and minorities.
We’ve held 16 recruitment events aimed specifically at women, and we’ve held 230 recruitment events at Minority Serving Institutions.
In FY15, CBP’s recruitment efforts resulted in more than 100,000 new applicants for frontline positions.
In closing, I’d like to thank Karen Kenney and everyone at CONECT for their hospitality today.
I want you all to know that CBP is eager to work with you and your companies to keep lawful cargo moving efficiently and securely.
Now I’d like to open it up to questions.