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Pacific Coast Council (PCC) of Customs Brokers and Freight Forwarders Association, Inc. 
CBP Priorities for Trade Facilitation/Trade Enforcement

Remarks as Prepared: Oct. 14, 2016

Thank you, Vince [Iacopella, President of PCC]. I’m delighted to be here in San Diego, and I want to thank you for inviting me. We have a lot to catch up on since our last engagement a year ago in Palm Springs.

The theme of this year’s WESCCON is “Navigating trade facilitation through the Single Window.” I’ll certainly address CBP’s central role in ACE, although the tremendous lineup of speakers and panelists at this year’s sessions can certainly tackle the more technical aspects of the system.

So I plan to give you an overview of where we are – a snapshot of CBP’s current state – as well as a brief recap of the progress we’ve made and where we’re going. 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.

We are at record numbers in all areas, and in all modes. On a typical day, CBP screens more than 70,000 truck, rail, and sea cargo containers, and hundreds of thousands of express consignment shipments and mail parcels. Annually, CBP manages more than 300,000 active unique importer-of-record numbers, accounting for 30 million commercial transactions.

In FY 2015, CBP processed more than $2.4 trillion in imports, more than $1.5 trillion in U.S. exports. And we collected approximately $46 billion in duties, taxes, and other fees, the highest amount collected in the last five years.

As we continue to meet these demands, CBP is preparing to meet the increasing complexity in all aspects of our mission. Transnational organized crime seeks new ways to exploit the supply chain—whether it’s to smuggle contraband, diversify funding sources with trade-based money laundering, or peddle fraudulent goods.

In examining our dual mission of border security and trade/travel facilitation, there’s no question that engagement with you, our partners with shared goals in a security global supply chain, is critical to CBP’s success. Nowhere has this collaboration been more important than in our development and implementation of the Automated Commercial Environment, the backbone of the U.S. Single Window.

I’m pleased to report we’re on track to meeting the President’s December deadline, with ACE now processing 100% of electronic entry summary and cargo release filings.

Your input has been invaluable as we develop and implement one of the most complex IT projects the U.S. government has ever seen.

We recently reached milestones in July and August, and based upon your input, we have added flexibility to our October goals. And while our Single Window effort is largely complete, we are on track to deliver all core trade processing capabilities in ACE by January 2017.

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.

Probably the biggest milestone for our trade operations during my tenure was the signing of the Trade Facilitation and Trade Enforcement Act (TFTEA) earlier this year. 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 also 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; and
  • 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.

I’d like to emphasize one important aspect of TFTEA – the elimination of the consumptive demand exemption. Goods made with indentured, convict, child, or other 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 shipments from China, involving soda ash, calcium chloride, potassium products, Stevia and its derivatives, and garlic.

It’s imperative that companies examine their supply chains to understand product sourcing and the labor. You can play a key role in amplifying this message to your own customers.

The law’s funding of ACE through 2018 is also vitally important. The BIEC governance process, along with input from all of you, will help CBP and the PGAs determine how to devote our resources to keep ACE moving forward.

CBP is also leading international efforts to modernize customs processes. In collaboration 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 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.

Finally, I’d like to commend our export community. Exporters have been leaders in automation.

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.

And in an effort to better manage risk in the export environment, CBP is working closely with industry to lay out the future of Option 4, also known as Post Departure Filing.

I know there has been a lot of concern from industry about these future changes, and we have proceeded carefully and cautiously. Together with Census and BIS, we are working closely with a COAC working group to identify the right approach to advance information.

We are currently exploring several options, including:

  • Collecting information through the electronic export manifest;
  • Applying a progressive filing approach; or
  • Implementing a trusted trader strategy in the export environment.

Thanks to the stellar efforts of COAC members like Vince Iacopella, Mike Young, Julie Parks, Liz Merritt, and Heidi Bray, we are getting close to finding a solution that works for everyone.

I want to thank WESCCON for inviting me here today.

Last Modified: February 3, 2021