U.S. Customs and Border Protection must take its four-year-old trade transformation initiative to the next level if it is going to make a real difference enabling businesses to easily move goods in and out of the country, Brenda Smith, the new assistant commissioner for international trade, said.
Smith recently told reporters that her agenda will focus on further simplifying regulations and internal processes, making smarter use of data already collected, and bolstering the agency’s trade expertise.
CBP wants to ensure “that we are making decisions in a coordinated fashion so that trade is predictable, it’s low cost, it’s efficient, and at the end of the day, the American consumer benefits and is protected,” Smith said.
Since 2010, CBP officials have challenged the organization to rethink its traditional approach of putting security first at all costs, and the way it operates, to reduce the cost and hassle of cross-border trade, and make American companies more competitive.
Trade facilitation programs being implemented or developed include Centers for Excellence and Expertise, simplified cargo release, an integrated trusted trader program, and a standardized multi-agency approach for making cargo admission and enforcement decisions.
CBP is trying to bring the rest of government into the modern age of border management. Many agencies have their own systems and procedures for enforcing import rules related to product safety, health and the environment. Most still rely on random or manual inspections rather than trend analysis and advance data to prioritize enforcement of high-risk shipments. Businesses complain that disjointed decision-making often leads to lengthy cargo delays at ports of entry.
Importers and exporters support CBP’s new direction, especially since the agency has made a point to co-create policy initiatives with direct assistance from private-sector stakeholders.
While Smith’s title may be new, she is no stranger to the office or the issues. She has spent 20 years at Customs, and early in her career, she worked at the Treasury Department and on Capitol Hill dealing with international trade policy. Before spending the past couple of years as head of the ACE Business Office — which manages user specifications, training and public outreach for the agency’s new trade-oriented information technology system — she was executive director of trade policy and programs in the Office of International Trade. In that position, she played a key role in developing the CEEs to help streamline trade, and policies related to trade enforcement, including intellectual property rights, free trade agreements and anti-dumping orders, compliance simplification, and communication to the trade.
CBP’s culture change is a work in progress. Its mission traditionally has focused on revenue collection and preventing the smuggling of drugs and other contraband. After Sept. 11, 2001, security became the priority, and industry groups complained the government was layering on multiple rules without understanding whether they made a noticeable security difference or their collective impact on companies and travelers.
“We continue to put our current regulations and practices under the microscope,” Smith said. “With 225 years of history, we have built up a lot of barnacles. And I think we really need to look at the reason why we do things and how we do things, and streamline them, not only at CBP, but within the government with the other government agencies.”
Smith said she wants the government to make better use of trade data to make risk-based decisions rather than simply asking for more types of information from importers and exporters.
Full implementation of ACE and the International Trade Data System, a government-wide electronic data exchange aimed at improving inter-agency communication and reducing redundant filing, is expected to make more information readily available to CBP specialists and give them the analytic tools to better manage the information.
International Trade needs to beef up its analytical and communication skills, Smith added. The CEEs are a good way of organizing limited expertise around specific industries to provide centralized processing of entry summaries and post-release activity associated with the payment of customs duties and statistics collection, but personnel still require investment in additional training and development, she said.
In May, Commissioner Gil Kerlikowske suggested Customs could eventually expand the role of its 10 CEEs beyond revenue-related functions to include making decisions on how and when to release imported goods into U.S. commerce. That remains an open question, Smith said, but noted the industry integration centers already play an important role in cargo release.
The CEEs are designed to provide participating importers with more predictable processing by routing entry summary documents to industry specialists better able to make compliance determinations based on a national view of a company account rather than on individual transactions, saving industry and the government from redundant work. The transition of revenue-type functions to the CEEs is being done incrementally. Previously, staff at ports of entry processed the forms, and traders often complained about the lack of uniformity in interpreting rules and regulations. The industry centers also serve as a single point of contact for importers and other border agencies to quickly resolve problems and provide assistance on the best ways to comply with various trade rules.
But Smith explained the CEEs also serve as a second layer of oversight to make sure officers at ports are making good risk-based decisions and alert them if too many low-risk shipments are being held up.
She said the biggest advance for trusted trade programs will come when other government agencies coordinate their processes with those of CBP.
A Border Interagency Executive Council now meets regularly to develop common policies for risk assessment, cargo segmentation, efficient processing of shipments, ITDS and automation, and other trade facilitation measures.
Some agencies are testing trusted trader programs of their own, and work is underway to incorporate regulatory reviews by other agencies within the CEEs.
“I think it’s critical that CBP and our partners work together to really look at the process, and that’s the way partnership members are going to see the greatest benefit,” Smith said.
This column was published in the November 2014 issue of American Shipper.