U.S., Canada agree on multimodal system for reverse inspections

Legal framework sets stage for expanding preclearance operations across borders.    The United States and Canada on Monday reached a major milestone on customs collaboration by agreeing on procedures for each side to pre-inspect passengers and cargo in the host country, with the aim of expediting cross-border trade and travel in all modes for the first time. 
   Pre-clearance is a key facet of the Beyond the Border Initiative and the 2011 action plan between President Barack Obama and Prime Minister Stephen Harper to develop a border strategy aimed at securing the North American perimeter from dangerous goods and people, while making their shared border more free-flowing for citizens and businesses. The ultimate goal is to make both countries more competitive and generate economic growth.
   The process involves U.S. Customs and Border Protection officers working on foreign soil to make admissibility decisions, rather than upon arrival at the U.S. port of entry, and vice versa for Canada. Clearing people and cargo in advance is designed to relieve pressure on ports of entry that are often congested during peak traffic periods because of limited physical space or personnel. Both governments have been working to establish such a “reverse inspection” system for more than a decade, but an accord was complicated by jurisdictional, legal and diplomatic issues. 
   Department of Homeland Security Secretary Jeh Johnson and Steven Blaney, Canada’s minister of public safety and emergency preparedness, signed the pre-clearance agreement during a ceremony at CBP headquarters in Washington.
   “It is critical that we manage our border so that it doesn’t stand as a barrier to commerce or prosperity,” Blaney said. 
   The United States and Canada enjoy the largest bilateral trade relationship in the world, with more than $735 billion in goods and services crossing the border in 2013. 
   Pre-clearance dates back several decades in the airline sector and has been formalized several times since, most recently in 2001. The new agreement updates the 2001 arrangement to reflect changes in today’s operating environment, including policies and tools since implemented at domestic ports of entry. CBP officers today conduct advance clearance on about 11 million passengers per year at eight Canadian airports, which reduces wait times upon arrival and often the number of connections required because travelers can go directly to non-international airports. The agreement is reciprocal, but Canada so far has not exercised the option.
   In 2013, CBP conducted a five-month trial at the Blaine, Wash.-Surrey, B.C., crossing on the Pacific Highway to test standard operating procedures and technologies for employing cargo pre-inspection in the truck environment. The lessons learned were applied last year to the much busier Peace Bridge crossing between Buffalo, N.Y., and Fort Erie, Ontario. CBP officers were stationed at the Canadian checkpoint to do primary inspections, which ostensibly expanded capacity because space is tight at the U.S. Customs plaza. Trucks received a green light when they reached the U.S. side of the bridge or were directed to a cargo lot for secondary inspection.
   The program was suspended in January and officials are now evaluating the results to determine its effectiveness and whether to maintain pre-clearance there on a permanent basis. The evaluation is scheduled to be completed by July 31, according to the Canadian government.
   The new agreement acts as the legal framework for implementing pre-inspection at new locations for rail, land, air and marine modes. It spells out the scope and limitations of customs officers’ authority when stationed abroad, including the ability to carry firearms, defensive tools and restraint devices to the same extent that host country officers are equipped. In Canada, this means that U.S. CBP officers would be able to carry firearms in the land, rail and marine modes, but not when conducting pre-clearance of air passengers. Currently, a Canadian law enforcement officer is on duty during CBP hours of operation and able to assist, if required, at Canadian airports. 
   The document also establishes a new criminal liability regime to govern the conduct of pre-clearance officers. The sending country will generally be allowed to exercise primary criminal jurisdiction for acts committed by its officers in the performance of official duties in the host country. An enhanced Preclearance Consultative Group would also provide greater oversight of the agreement.
   The pre-clearance agreement negotiated between the United States and Canada also provides for the both sides to explore the idea of co-locating customs personnel in a single plaza at small and remote land ports. 
   The compromises over traditional sovereignty issues go beyond simple administrative prerogatives and therefore both countries must implement enabling legislation for them to be adopted. The Civilian Extraterritorial Jurisdiction Act was introduced in the last Congress and DHS officials expressed hope that it will reintroduced soon.
   “After years of hard work and negotiations, today we have one of the most significant, visible, and anticipated products of the Beyond the Border initiative,” Secretary Johnson said. “This agreement will facilitate legitimate trade and travel that keeps our economy thriving as we maintain utmost vigilance for the security of our borders.”
   Industry is pushing both governments to reduce regulatory burdens at the border to minimize costs, especially since supply chains are so intertwined that many manufacturing components cross the border several times in the process of building and delivering a final product.
   “This is really positive,” Eric Miller, vice president of innovation and competitiveness at the Canadian Council of Chief Executives, said after the event. Once it enters into force, the agreement will allow negotiations to expand pre-clearance operations at individual land border crossings “and then you’ll see the vision fully realized.”
   A Canadian Council of Chief Executives paper in December recommended, as one mechanism to better integrate the economies of the United States, Canada and Mexico, that Customs officers actually conduct pre-inspections on factory premises for high-volume manufacturers that repetitively ship the same intermediate and finished goods. Conducting on-site “reverse inspections” away from the border would require dedicated inspectors and trained certified contractors under the supervision of officials, tamper-proof seals on inspected trucks to ensure an unbroken chain of custody between the plant and the border, vehicle tracking devices to warn of deviation from designated routes, and fast lanes for pre-inspected traffic at ports of entry.
   The paper said companies are willing to pay for personalized customs and cargo security inspections if it results in faster transit times at the border.
   A U.S-Mexico pilot project is currently testing a similar concept in the Maquiladora sector of Tijuana.
   The United States and Canada are working on several levels besides pre-clearance to better harmonize border management, including more interoperable trusted shipper programs, developing similar methods for screening shipments on all-cargo planes, a common set of advance data for cargo screening, and eventually integrating electronic portals through which importers and exporters submit documents to customs and other agencies.