East Coast Trade Symposium
East Coast Trade Symposium
Remarks as Prepared: Dec. 1, 2016
Thank you, Maria Luisa, and welcome to this year’s East Coast Trade Symposium. This is my third Trade Symposium – and it’s the final time I’ll be able to address you as Commissioner. So I want to thank all of CBP’s industry partners for their help and cooperation over the past two and a half years.
Our trade mission – to facilitate, secure, and enforce – is key to our nation’s economic and national security, and your input continues to help shape key policies and initiatives.
I also want to thank our Partner Government Agencies for their support and collaboration. Your involvement has been absolutely critical to our ability to serve our trade stakeholders.
I’d be remiss if I didn’t recognize CBP’s terrific trade “team” that has provided such excellent advice over the past few years:
- Maria Luisa Boyce, CBP’s Senior Advisor for Private Sector and Trade Engagement, Office of Trade Relations;
- Brenda Smith, Executive Assistant Commissioner, Office of Trade;
- Todd Owen, Executive Assistant Commissioner, Office of Field Operations;
- Mark Koumans, Assistant Commissioner, Office of International Affairs; and
- Patrick Schmidt, my Advisor for trade-related policy.
This morning, I’d like to summarize the most significant accomplishments we’ve made since I took my oath as Commissioner in March 2014. And we’ve made those accomplishments together.
These past 30 months have been such an amazing journey. I know that when we first met, there was some healthy skepticism about how my background in law enforcement would translate to the nuances of CBP’s trade mission. But I’m confident my law enforcement experience – with its emphasis on teamwork and collaboration – has been helpful in managing the tremendous progress we’ve made together.
Tomorrow, you’ll hear from Deputy Commissioner Kevin McAleenan, and he’ll set the stage for what’s on the horizon for CBP and its trade policies. So, I hope you won’t mind if I provide a brief “recap” before Deputy Commissioner McAleenan offers a “preview of coming attractions.”
There are five main areas I want to touch on this morning:
- ACE and the Single Window;
- The Centers of Excellence and Expertise;
- Trade enforcement in the wake of the legislation enacted earlier this year;
- The elevation of CBP’s international profile; and
- The Export side of the equation.
I don’t have to tell you how important ACE is, or how much the Single Window has transformed our trade processes.
And I don’t have to tell you that it hasn’t always been smooth sailing.
Robert F. Kennedy once noted that “Progress is a nice enough word, but change is its motivator … and change has its enemies.” But it hasn’t been change for change’s sake; the change has been absolutely necessary, and our transition to ACE has been well worth it.
It’s been worth it for our Partner Government Agencies, for example, because ACE has automated more than 300 paper forms. PGAs receive shipment data earlier and have greater visibility into that data prior to and at the time of entry and export. We are on track to implement a coordinated border management with our colleagues.
And our trade stakeholders are also telling us that the transition has been well worth it.
Take the ACE Portal, for example. The ACE Portal is a free, online interface to ACE that allows our trade partners to monitor compliance requirements.
Allow me to quote Tom Gould, Senior Director of Customs and International Trade for Sandler, Travis and Rosenberg, who says the portal is “an invaluable tool I use daily to assess clients’ import and export compliance and to identify opportunities for efficiencies and duty savings.”
Another example is ACE Reports, which lets our trade partners review filing data in real time to detect and analyze trouble spots on behalf of their customers.
One of those trade partners is BDP International. Michael J. Ford, BDP’s Chief Compliance Officer, says that ACE Reports provide “the visibility needed to achieve today’s demanding world of customer service.”
There’s also ACE eBonds. Electronic bond submission – launched in January 2015 – has reduced paper bond submissions by 95% and cut processing times significantly.
Lisa Gelsomino, President and CEO of Avalon Risk Management, says that eBond lets her company get customs bonds on file “in seconds vs. the 5 to 10 business days it previously took.” In addition, she noted that paper bond updates could previously take up to 30 business days but now they can be resolved in mere minutes.
Finally, there’s the new ACE Availability Dashboard. This new tool gives users real-time updates and operational status overviews that make ACE even more responsive to users’ needs.
ACE is working … delivering real results for CBP and for our trade stakeholders. For CBP, it has saved us an estimated $20 million in Fiscal Year 2016. For trade stakeholders, that figure is more than $40 million.
We deeply appreciate the dedication of our trade partners in making ACE a success, and we remain committed to providing an efficient system and process that adds value and encourages participation from all of our stakeholders.
Another milestone of my tenure as Commissioner is that all 10 Centers of Excellence and Expertise are now fully operational. The Centers are a game-changer in how we interact with industry – from the largest corporation to the smallest family-run business.
Specific benefits include:
- Streamlined and centralized processing – saving businesses time and money; and
- Uniformity of decisions – increasing predictability and transparency.
These benefits aren’t just theoretical – they play out every day all over the country. The Centers help avoid costly plant shutdowns by assisting in the timely release of “just in time” freight. They also facilitate the development of greater expertise in company-specific intellectual property among CBP import specialists and CBP officers.
But don’t just take my word for it … Let’s look at the Automotive and Aerospace Center, based in Detroit. The A&A Center collaborated with a major importer to streamline the process related to filing protests.
Thanks to the Center, the importer could consolidate numerous monthly protests filed on the same issue into a single protest filed once a month. This streamlined approach meant that the importer filed only 12 protests per year. These efforts resulted in a significant reduction in time, effort and expense for both the importer and CBP.
Here’s another example of how the A&A Center is a “win-win” for both CBP and industry: an A&A Center account reached out to the Center for assistance with the expedited release of a shipment at a port of entry.
The port expedited the exams – but inspection revealed live agricultural pests within the shipment. Thanks to the collaboration between the Center and the port, the shipment was appropriately quarantined while the goods were released – avoiding a costly plant shutdown.
And the Center engaged the account in discussions about possible packing and shipping alternatives to wood pallets – since the pests had been stowaways in the wood.
The Centers also make it easier to collaborate with PGAs.
Through the Pharmaceuticals Center, CBP works with other agencies – the FDA, the DEA, and the International Trade Commission – to stop the importation of illicit pharmaceuticals.
The Pharmaceuticals, Health, and Chemicals Center and the Port of JFK International Airport received the Global Intellectual Property Rights Champion award from the U.S. Chamber of Commerce. The Center and JFK worked with Homeland Security Investigations (HSI) in an investigation of a large-scale manufacturing and distribution network of counterfeit health and beauty items – leading to raids on 21 warehouses in New York in August 2014.
Clearly, the Centers of Excellence and Expertise have been a game-changer, and I couldn’t be prouder of the employees who brought each of them to fruition.
That’s a look at some of our major trade facilitation achievements. We’ve made just as much progress on the enforcement front.
Look at Forced Labor. This is a critical aspect of the Trade Facilitation and Trade Enforcement Act of 2015 or TFTEA – the elimination of the consumptive demand exemption. Goods made with forced labor are no longer allowed into the country simply to meet U.S. demand. This year, I’ve already signed Withhold Release Orders on several commodities from China: soda ash, calcium chloride, potassium products, Stevia and its derivatives, and peeled garlic. It’s imperative that companies examine their supply chains to understand product sourcing and the labor.
Then there’s the issue of antidumping and countervailing duties, or AD/CVD. CBP’s enforcement of AD/CVD laws is critical to leveling the playing field for American business. In FY 2016, CBP enforced 364 AD/CVD Orders covering around 150 products. In FY 2016, $11.2 billion of imported goods were subject to AD/CVD, and CBP collected $1.8 billion in AD/CVD deposits.
TFTEA also enacted the Enforce and Protect Act (EAPA), which gives us new authority to investigate merchandise alleged to be evading antidumping and countervailing duty orders. We’ve established a website in order to get information and resources to the trade in a timely method as we are implementing this new proceeding. Today, I can announce that parties may now file EAPA allegations electronically via our e-allegations web portal on cbp.gov.
Turning to the protection of intellectual property, I want to emphasize that trade in counterfeit and pirated goods poses a significant threat to the U.S. economy, the livelihoods of our workers, and consumer health and safety. Trade in these illegitimate goods has also been linked to transnational criminal organizations, threatening our national security.
In the coming weeks, we will release our FY 2016 Intellectual Property Rights Seizure Statistics. But today I’d like to offer a preview of CBP’s achievements in protecting against counterfeit and pirated goods over the past fiscal year.
- In FY 2016, CBP and HSI made over 31,000 IPR seizures, which is an all-time high and a 9 percent increase over FY 2015.
- These products would have had a retail value of more than $1.3 billion if they were genuine.
- These seizures include items such as counterfeit pharmaceuticals and potentially dangerous counterfeit automobile and aerospace parts.
- Once again, China and Hong Kong remained the primary sources of counterfeit and pirated goods, together accounting for 88 percent of the total estimated value of all IPR seizures.
CBP works with our customs counterparts in other countries to improve IPR enforcement at the border. For example, as part of our annual Operation Team Player, working in conjunction with Mexican customs officials and Hong Kong customs officials, CBP and ICE targeted counterfeit merchandise that flooded the U.S. market ahead of Super Bowl 50 earlier this year. This effort resulted in CBP interdicting 887 shipments with a value of over $50 million.
Speaking of that kind of collaboration, CBP is also leading international efforts to modernize customs processes. In partnership with our Canadian and Mexican counterparts, we’ve proposed a common vision statement focused on aligning cargo processing in the region and standards for the North American Single Window.
And 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 harder 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 those 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.
CBP is also active in the World Customs Organization (WCO).
I was especially pleased and proud that “one of our own” – Ana Hinojosa, Deputy Assistant Commissioner of our Office of Trade – was named Director of Compliance and Facilitation. 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 allow us to share best practices on an international scale while strengthening CBP’s international partnerships.
I’ve logged more than 220 thousand miles and visited more than 20 countries, and I’m the first CBP Commissioner to visit Africa. It’s been such an honor to represent CBP on the international stage.
Finally, I’d like to commend our export community. The Trade Act of 2002 requires electronic submission of carrier manifest information for all modes of transportation. In 2015, CBP announced three automated export manifest pilots for the submission of export manifest data for air, ocean, and rail carriers.
These pilots are underway, and we’re already seeing benefits. We now know the exact departure port for your shipments, allowing us to more accurately assess risk and reduce delays.
In the maritime environment both Maersk and Overseas Oriental Container Lines are submitting electronic manifests to CBP through the Ports of Newark, NJ and Long Beach, CA respectively. This pilot is estimated to save each carrier about $900,000 annually for copying and courier costs alone. And Maersk is looking to expand their participation in the pilot to another east coast port shortly.
In the air environment, BDP International began their initial filing of export bills of lading last week. A number of other carriers and freight forwarders have begun the process to submit air export manifest.
In the rail environment, Union Pacific and Canadian National Railway have begun submitting bill of lading information electronically to CBP.
CBP has also established a truck electronic export manifest working group to decide which data elements would be required for the manifest in a potential pilot for the trucking environment. The working group is also considering the Canadian and Mexican import manifesting requirements for the Single Window initiative.
As with imports, our export activities also involve collaboration with our PGAs. For example, in 2015, CBP and the State Department’s Directorate of Defense Trade Controls worked together to share DDTC’s complete license database to enforce the International Traffic in Arms regulations more effectively. In addition, CBP and the Defense Security Cooperation Agency have been working together to automate the exchange of Foreign Military Sales Case information, and we anticipate the completion of that project sometime next year.
Before I open it up to questions, I’d like to make a couple of final, more personal observations.
One of the things I started doing as Commissioner – and something I hope CBP continues – is what we call “CBP in the City” visits. These outreach events let us engage with business, academic, and government leaders in a particular city to discuss the most pressing issues facing their local communities.
I’ve had the pleasure of visiting Atlanta, Baltimore, Boston, Charleston, Detroit, Houston, Indianapolis, Philadelphia, Phoenix, and Wilmington. Next stop for CBP in the City: Savannah – the fastest-growing U.S. port for the past decade, averaging 11% growth each year – and the second-largest port on the East Coast (behind Newark).
Another point I’d like to make is that it’s so important to have a confirmed Commissioner. I’m grateful to have been the first confirmed Commissioner in more than five years. I think it really does make a difference.
Along those same lines, I’m proud that CBP has filled many of the “Acting” leadership positions. Our headquarters realignment – a mammoth undertaking – was initiated and completed during my tenure, and it’s a major step forward in streamlining decision-making and ensuring that the field gets the resources needed to accomplish our mission.
Just 10 weeks ago, on September 12, CBP established the e-Commerce and Small Business Branch within the Office of Trade. This new branch reflects the new internet-based business models and the shift to direct shipping to customers. And it will help small and medium-sized enterprises move their legitimate cargo more efficiently, without unnecessary costs and delays.
Finally, as I prepare to leave office, I know that you know that I leave CBP in the most capable hands of Deputy Commissioner McAleenan. Kevin has a keen appreciation and understanding of the tremendous importance – and complexity – of CBP’s trade facilitation and trade enforcement responsibilities. You’ll hear more about his vision for CBP and the way forward during the upcoming transition tomorrow.
In closing, let me again express my gratitude to all of you for your support over the past two and a half years. It’s been a terrific learning experience for me, and I’ve been so fortunate to have truly top-notch people advising me – people who will continue to lead CBP into 2017 and beyond.