A spirit of cooperation was the prevailing mood when members of the new 16th term Commercial Customs Operations Advisory Committee, known as COAC, gathered last week in Washington, D.C., for their first public meeting with U.S. Customs and Border Protection Commissioner Chris Magnus. The meeting, held on March 31, was also the first time that the trade advisory group had gathered in person since the start of the pandemic. For the past two years, the committee’s public meetings were held virtually.
“It’s been a long time since we’ve been able to have this kind of gathering, a meeting ‘in real life,’ when the participants, at least most of them, are in the room with each other,” said Magnus, who has been at the helm of the agency since mid-December last year.
Twelve of the 20 COAC members and all five alternates are new to the committee. Magnus, who co-chaired the meeting, welcomed them. “To those of you who are new COAC members, I want to thank you for your willingness to take on this incredibly important work with us to modernize trade and tackle the many big challenges in front of the trade community. Your collaboration with CBP and willingness to provide us with frank, thoughtful feedback is what makes this committee so valuable.”
Magnus expressed his commitment to the trade community and the American public. “My first 100 days have gone by in the blink of an eye but let me assure you that my CBP colleagues and I are laser-focused on the trade mission and its importance to both our economy and the nation,” he said. “I appreciate that the previous COAC has provided a number of recommendations to CBP that helped us better understand the impact of how we interact with U.S. businesses and industries. But ultimately, it’s the American public that benefits the most from our collaboration, and I don’t want to lose sight of that.”
Magnus emphasized the importance of working with the trade community. “When we work together, we can improve the supply chain consumers rely on, protect citizens from counterfeit, dangerous and defective products, cut through unnecessary red tape and redundant processes and better address critical issues including forced labor and national security.”
The commissioner recognized that CBP and the trade community wouldn’t always agree on everything. “But we can commit to be honest, transparent and to take your needs and concerns into consideration,” said Magnus. “As commissioner, I will always be forthright, make myself available to you and be willing to tackle the tough issues.”
Magnus shared a few, quick highlights pertaining to the work CBP is doing. First, he noted that in early March, Congress had passed the fiscal year 2022 omnibus appropriations bill, which funds the federal government through September 30. “Congress appropriated $16.3 billion to CBP, including $87 million for non-intrusive inspection systems, $27.5 million to implement the Uyghur Forced Labor Prevention Act and $12.4 million for the Advanced Trade Analytics Platform,” said Magnus. He also noted that CBP is working on two final rules that will have a significant impact on customs brokers. One will update regulations so that customs brokers can meet the challenges of the modern operating environment. The other will increase continuing education requirements for licensed brokers. If finalized, the rule would require 36 hours of continuing education credit every three years for individual license holders.
Magnus also spoke about ACE 2.0, a new cargo processing system that will ultimately replace the Automated Commercial Environment, or ACE, the current platform connecting CBP, the international trade community and partner government agencies when trade-related data is submitted for processing imports and exports. “This is a new system based on advanced technologies and processes intended to more effectively meet CBP’s mission and deliver cost and efficiency benefits to both the government and the private sector,” said Magnus. “This system will be based on international interoperability standards developed to incorporate legacy systems, distributed ledger technology such as blockchain and the flexibility to future-proof our systems as more disruptive technologies come online.”
Before concluding, Magnus announced a new COAC initiative—a domestic manufacturing and production working group. “This group will work to further understand the areas of trade within CBP’s authority that impact our domestic industries,” he said.
Magnus also invited others to speak including Pete Flores, CBP’s new executive assistant commissioner of Field Operations. Flores, a CBP veteran, spoke about his career with the agency including his most recent position as the director of field operations for CBP’s San Diego Field Office. Flores thanked the COAC members for working side by side with CBP over the years. “Our partnership is critical for us. Working in a silo, in a box all by ourselves does not work well. We’ve seen the outcome of that, so we’ve really worked hard to strengthen our partnership, our collaboration and how we move forward with what we do,” said Flores, citing the pandemic’s disruption of U.S. supply chains as evidence of why working together is so essential.
Flores also praised CBP’s workforce for ensuring commerce continued to flow during the pandemic. “I’m extremely proud of the men and women in CBP and the Office of Field Operations. During the pandemic, they showed up to do their job every day to ensure we were part of the solution during a difficult time.”
Brian White and Kathy Wilkins, the 16th term COAC trade co-chairs, also spoke. Wilkins, a licensed customs broker and the vice president of logistics consulting firm Alliance Operating Services, expressed how much the trade community appreciated having the opportunity to work with CBP, especially on the 21st Century Customs Framework initiative. The 21st Century Customs Framework addresses current and future trade challenges and modernization barriers that impact U.S. businesses, consumers, and the country’s economic security. “A lot of our trade members have been in town all week working on this initiative, so it is important to us,” said Wilkins. “As a whole, the trade is very invested in security in the supply chain.”
White, also a licensed customs broker and the senior international trade advisor at computer technology giant Intel, explained that he and Wilkins had met with trade associations and industry colleagues to better understand how they could represent the collective interests of trade through COAC. “As we on- boarded all of the 16th term members, we asked them, ‘How do we distill our thoughts and keep priorities?’” said White. He shared that the COAC members’ priorities fit into four pillars—trade facilitation, enforcement modernization, risk-based partnerships, and regulatory package updates. “These are the areas that we want to focus on as we work through the 16th term alongside CBP and our partners,” said White.
The meeting was also co-chaired by Timothy Skud, the U.S. Department of Treasury’s deputy assistant secretary of tax, trade, and tariff policy, and included updates on trade programs and COAC subcommittee work. E-commerce was among the many topics discussed. “Our mission is to work with CBP to examine the growing e-commerce ecosystem and how to best keep trade moving while recognizing the security challenges we are collectively seeking to address,” said COAC member Amy Smith, the head of U.S. regulatory affairs and trade compliance for DHL Express and a co-chair of the COAC e-commerce task force. “We approach our work recognizing that e-commerce cannot be un-invented, and stifling e-commerce would only harm the U.S. economy.”
Smith explained that “striking the balance between continued facilitation and enhanced enforcement in the growing e-commerce environment is critical. Further, we know our global partners are carefully watching and deliberating their own regulatory changes and look to the U.S. for leadership. Moves at home could have a profound impact on U.S. companies abroad. However, I’m confident with the expertise on this task force and our collaboration with CBP, we’ll be able to continue our constructive dialogue to provide the agency, Congress, and the public with thoughtful and practical recommendations.”
CBP’s trusted trader program was another discussion topic. “A huge milestone occurred since the last time the official COAC met, and that huge milestone was the 20th anniversary of the creation of the Customs Trade Partnership Against Terrorism,” said Thomas Overacker, CBP’s executive director of cargo and conveyance security. “It was in November of 2001 that Commissioner Bonner announced the creation of such a partnership. In those days, we started with seven companies—what Commissioner Bonner referred to as the ‘magnificent seven.’ And now, the program has matured and grown to where we have over 11,000 members including not just importers, but carriers, brokers and other members of the supply chain.”
“The CTPAT program became the model for the world to follow and it became the principles that were embedded into the World Customs Organization’s Safe Framework of Standards,” said Overacker. “We’re very proud of the work that we’ve done and we’re also looking forward to continuing work with the COAC on the Trusted Trader Working Group, so that we can take it to the next level. Not just with respect to CTPAT, but all of the things that we do when it comes to facilitation.”
A brief moment of silence was held during the meeting to honor former COAC member Kate Weiner, who passed away earlier this year. Weiner was a member of the 15th term COAC and made significant contributions to the committee’s Export Modernization Working Group. “I can’t express greater gratitude for what Kate did and the legacy that she has left, which includes, and I have this in my hands, the June 23rd, 2021 export modernization white paper,” said Overacker. “We also know that Brenda Barnes played a big role in this, but I just can’t thank Kate enough for everything she did for COAC and for CBP. She is and will be sorely missed.”
The next COAC meeting is scheduled for this June.
COAC is a 20-member advisory committee that was established by Congress in 1987. The committee provides advice and recommendations to CBP and the Department of the Treasury on the commercial operations of CBP and trade-related interdepartmental functions. Some of the issues that COAC focuses on include enhanced border and supply chain security, international efforts to harmonize customs practices and procedures, import safety, compliance, and modernization and automation processes used to facilitate trade.