CBP Publishes COAC Quarterly Meeting Minutes CBP Publishes COAC Quarterly Meeting Minutes CBP Publishes COAC Quarterly Meeting Minutes
09/15/08 07:45 AM Filed in: Customs
U.S.
Customs and Border Protection (CBP) has posted on
its website the
minutes
from the August
7, 2008 quarterly meeting of the
Departmental Advisory Committee on Commercial
Operations of Customs and Border Protection and
Related Homeland Security Functions (COAC). The
discussion included the following:
1. C-TPAT Partners. As of July 21, 2008, there were 8,527 certified C-TPAT Partners, of which 600 are new companies. Buffalo and Houston were added to the C-TPAT field offices with focus primarily on Canadian and Mexican supply chains. A total of 8,519 C-TPAT validations were conducted, with 1,916 validations conducted this year. CBP is taking actions to suspend companies that fail the validation process. Of the 593 members that failed the validation, half were highway carriers. Mexico’s highway carriers are revalidated annually to ensure their improvement. The validation cycle time has improved according to latest information, and is currently at 60 days. CBP has reduced the cycle time it takes to issue reports to a partner from 100 days to 45 days.
2. Mutual Recognition (MR) Arrangements. CBP Commissioner has signed new MR arrangements with Jordon and Canada. CBP continues to work with the European Union (EU) on supply chain security and hopes to sign an MR arrangement with the EU by next year. CBP has been working with Japan on joint validations and hopes to have an MR agreement completed by the end of this year. CBP is working with Canadian Customs on a single set of rules that would be applicable to companies common to both the U.S. and Canadian Supply Chain Security Programs; there are about 1,000 such companies.
3. Automated Commercial Environment (ACE) Program Status and Int’l Trade Data System (ITDS). CBP had expected to replace the Vessel and Rail e-manifest system by October of 2008. Issues with testing the new software have delayed the implementation of the e-system. CBP hopes to have a system in place by December 2008, which the Trade can participate in testing. The Entry Summary Processing deployment from January 2009 is also pushed into the future, probably one month after the Rail and Vessel elements are completed.
4. Import Safety Initiatives. Import Safety and Intra-Agency Requirements, Office of Int’l Trade (OT) of CBP, addressed the effort of the interagency working group. The initiative is active and will implement the Import Safety Action plan. The Consumer Product Safety Commission (CPSC) Reauthorization Bill is expected to be signed by the President in the near future. Importer Self Assessment (ISA) Module will include a Product Safety Component. Work is being done to identify good safety practices. It is desirable that the practices be administered on a company, rather than a commodity, basis. CPSC has conducted several foreign factory visits. CPSC only has 9 officers in the field but this number will be increased to 50 officers.
5. Lacey Act Amendments. The effective date of the Lacey Act Amendments is December 15, 2008. The Act requires that the name of the plant, the value, the quantity of the plant and the Country of Origin (COO) of the plant must all be declared at entry. The schedule that identifies the Harmonized Tariff Schedule (HTS) chapters that will be affected by the Act will be available in the near future. There are 8,000 lines that come in daily that will be required to submit the Import Declaration. If actual COO is not known at the time of entry, the Import Declaration must state all possible COOs. The COO form is currently a paper form, and so all 8,000 lines that were paperless will now require a paper form. The United States Department of Agriculture (USDA) does not have an automated feed into CBP’s system as Food and Drug Administration (FDA) does. Development of an electronic method to add the name into the system will be difficult because of the length of the plant genus or species name. There are over 1,500 genus and species of tress in the world that could potentially be recorded.
6. Agricultural Program Update. Wood boring insect. – an emerald ash borer – was found in Virginia. The insect is established in the Midwest and has, so far, killed 20 million trees and has endangered millions more. Enforcement of wood packing requirements needs to be increased.
7. 10+2. First Data Format was distributed in May 2008 and comments in response were received. Second version was distributed on July 17, 2008, and comments are still being accepted. Industry Working Group introduced account-based filing for 10+2 and the way it would work. This will be shared with CBP and on the November meeting agenda.
8. Secure Freight Initiative (SFI). SFI of CBP’s Office of Field Operations is facing challenges with the initiative, largely because the technology for anomaly detection is not available. Equipment has not been used in high-volume ports yet. Issues also arise with respect to space and trade flows at various ports. Setting up a lane to use the equipment is difficult when land is scarce. The system is already operational in Hong Kong, and should become operational in Oman and Korea.
9. CBP Trade Strategy. CBP has introduced, in the May meeting, the CBP Trade Strategy in a multi-level approach. CBP has provided the Trade Strategy report to COAC and is expecting comments. The implementation of the Strategy is expected October 1, 2008.
10. Proposed Rules of Origin. Currently, CBP is running two systems: one is a case-by-case analysis of past legal cases, which has been done for the past 200 years; another is based on Decision Tree, which codifies inputs and existing body of law, which has been in existence for the past 15 years. The traditional system is problematic because it is subjective, and therefore the Court has difficulty applying the decisions consistently. Similarly, the Trade faces issues of certainty and predictability as well as the reasonable care requirements. The new system, on the other hand, has yielded terrific results: less than 1% of the decisions are revised. Thus, decision has been made to move to the more modern system, which already applies to 40% of the Trade. 60-day comment period was opened since the Issue Date.
11. First Sale. Office of Int’l Trade is withdrawing the First Sale Proposal because they need to focus on the Farm Bill Act. CBP is working on a yes/no question with respect to whether the valuation is based on the first sale. The yes / no answer will be required at the entry line level and will become electronic. If it is first sale, CBP form 7501 on the Automated Broker Interface (ABI) will simply need to be marked “F” and left blank, if the entry valuation is not on first sale basis.
12. Proposed Closure of the Los Angeles Drawback Center. The question is raised whether to reassign the Los Angeles drawback officers to the San Francisco Office. The number of drawback specialists would not be reduced. CBP will issue a Federal Register Notice before the office is closed and will provide the public with opportunity to comment.
The next COAC meeting is schedule for November 20, 2008 in Washington, DC.
1. C-TPAT Partners. As of July 21, 2008, there were 8,527 certified C-TPAT Partners, of which 600 are new companies. Buffalo and Houston were added to the C-TPAT field offices with focus primarily on Canadian and Mexican supply chains. A total of 8,519 C-TPAT validations were conducted, with 1,916 validations conducted this year. CBP is taking actions to suspend companies that fail the validation process. Of the 593 members that failed the validation, half were highway carriers. Mexico’s highway carriers are revalidated annually to ensure their improvement. The validation cycle time has improved according to latest information, and is currently at 60 days. CBP has reduced the cycle time it takes to issue reports to a partner from 100 days to 45 days.
2. Mutual Recognition (MR) Arrangements. CBP Commissioner has signed new MR arrangements with Jordon and Canada. CBP continues to work with the European Union (EU) on supply chain security and hopes to sign an MR arrangement with the EU by next year. CBP has been working with Japan on joint validations and hopes to have an MR agreement completed by the end of this year. CBP is working with Canadian Customs on a single set of rules that would be applicable to companies common to both the U.S. and Canadian Supply Chain Security Programs; there are about 1,000 such companies.
3. Automated Commercial Environment (ACE) Program Status and Int’l Trade Data System (ITDS). CBP had expected to replace the Vessel and Rail e-manifest system by October of 2008. Issues with testing the new software have delayed the implementation of the e-system. CBP hopes to have a system in place by December 2008, which the Trade can participate in testing. The Entry Summary Processing deployment from January 2009 is also pushed into the future, probably one month after the Rail and Vessel elements are completed.
4. Import Safety Initiatives. Import Safety and Intra-Agency Requirements, Office of Int’l Trade (OT) of CBP, addressed the effort of the interagency working group. The initiative is active and will implement the Import Safety Action plan. The Consumer Product Safety Commission (CPSC) Reauthorization Bill is expected to be signed by the President in the near future. Importer Self Assessment (ISA) Module will include a Product Safety Component. Work is being done to identify good safety practices. It is desirable that the practices be administered on a company, rather than a commodity, basis. CPSC has conducted several foreign factory visits. CPSC only has 9 officers in the field but this number will be increased to 50 officers.
5. Lacey Act Amendments. The effective date of the Lacey Act Amendments is December 15, 2008. The Act requires that the name of the plant, the value, the quantity of the plant and the Country of Origin (COO) of the plant must all be declared at entry. The schedule that identifies the Harmonized Tariff Schedule (HTS) chapters that will be affected by the Act will be available in the near future. There are 8,000 lines that come in daily that will be required to submit the Import Declaration. If actual COO is not known at the time of entry, the Import Declaration must state all possible COOs. The COO form is currently a paper form, and so all 8,000 lines that were paperless will now require a paper form. The United States Department of Agriculture (USDA) does not have an automated feed into CBP’s system as Food and Drug Administration (FDA) does. Development of an electronic method to add the name into the system will be difficult because of the length of the plant genus or species name. There are over 1,500 genus and species of tress in the world that could potentially be recorded.
6. Agricultural Program Update. Wood boring insect. – an emerald ash borer – was found in Virginia. The insect is established in the Midwest and has, so far, killed 20 million trees and has endangered millions more. Enforcement of wood packing requirements needs to be increased.
7. 10+2. First Data Format was distributed in May 2008 and comments in response were received. Second version was distributed on July 17, 2008, and comments are still being accepted. Industry Working Group introduced account-based filing for 10+2 and the way it would work. This will be shared with CBP and on the November meeting agenda.
8. Secure Freight Initiative (SFI). SFI of CBP’s Office of Field Operations is facing challenges with the initiative, largely because the technology for anomaly detection is not available. Equipment has not been used in high-volume ports yet. Issues also arise with respect to space and trade flows at various ports. Setting up a lane to use the equipment is difficult when land is scarce. The system is already operational in Hong Kong, and should become operational in Oman and Korea.
9. CBP Trade Strategy. CBP has introduced, in the May meeting, the CBP Trade Strategy in a multi-level approach. CBP has provided the Trade Strategy report to COAC and is expecting comments. The implementation of the Strategy is expected October 1, 2008.
10. Proposed Rules of Origin. Currently, CBP is running two systems: one is a case-by-case analysis of past legal cases, which has been done for the past 200 years; another is based on Decision Tree, which codifies inputs and existing body of law, which has been in existence for the past 15 years. The traditional system is problematic because it is subjective, and therefore the Court has difficulty applying the decisions consistently. Similarly, the Trade faces issues of certainty and predictability as well as the reasonable care requirements. The new system, on the other hand, has yielded terrific results: less than 1% of the decisions are revised. Thus, decision has been made to move to the more modern system, which already applies to 40% of the Trade. 60-day comment period was opened since the Issue Date.
11. First Sale. Office of Int’l Trade is withdrawing the First Sale Proposal because they need to focus on the Farm Bill Act. CBP is working on a yes/no question with respect to whether the valuation is based on the first sale. The yes / no answer will be required at the entry line level and will become electronic. If it is first sale, CBP form 7501 on the Automated Broker Interface (ABI) will simply need to be marked “F” and left blank, if the entry valuation is not on first sale basis.
12. Proposed Closure of the Los Angeles Drawback Center. The question is raised whether to reassign the Los Angeles drawback officers to the San Francisco Office. The number of drawback specialists would not be reduced. CBP will issue a Federal Register Notice before the office is closed and will provide the public with opportunity to comment.
The next COAC meeting is schedule for November 20, 2008 in Washington, DC.