CBP’s MBA isn’t a college degree

CBPÆs MBA isnÆt a college degree Good corporate citizens to get import help under dual pilot programs.

By Eric Kulisch

   U.S. Customs and Border Protection said it began testing two concepts in November to address calls from industry to manage trade compliance on an account basis rather than per shipment.
   The agency established a Center for Excellence and Expertise to smooth the importation process for the pharmaceutical industry, and an Account Executive program, focused on the electronics sector, to test its ability to deal with low-risk companies based on the totality of their trade, product safety and security compliance. The demonstration programs will run through June 2011.
   For years the trade community has suggested Customs judge companies based on their overall compliance history rather than try to enforce rules and issue penalties for individual shipments entering the country. CBP made a gesture towards the approach in the mid-1990s by creating a national account manager program, which now has 35 full-time account managers serving as points of contact for 500 large companies.
   But CBP officials acknowledge that management-by-account (MBA) didn’t work as well as expected largely because managers were not given consistent guidance about how they should interact with trading companies. The account managers’ scope is fairly limited, with much of the focus limited to the Importer Self-Assessment program — which permits validated importers to self-assess their customs compliance to avoid CBP audits and reduce shipment inspections — and some other coordination functions.
   The immediate impetus for the new demonstration programs came from the Commercial Operations Advisory Committee and instructions from new Commissioner Alan Bersin to speed up trade facilitation efforts. COAC, comprising 20 industry representatives, early this year handed Customs a white paper recommending a new business model centered on integrated account management of importers’ activity in the areas of trade compliance, informed compliance, security, intellectual property rights, product safety and information technology.
   Supporters of modernizing trade facilitation want the process to be more predictable, simple, efficient, transparent and uniform.
   ‘We’re trying to focus on more of an approach of managing by account rather than a standalone program called account management,’ said Brenda Brockman Smith, executive director for trade policy and programs, in an interview. ‘We believe there are a lot of opportunities through financial processing, data collection, risk analysis and management, facilitation, where we can all manage by account’ throughout the organization.
   At the COAC’s May meeting in Philadelphia, Brockman Smith previewed CBP’s vision, saying: ‘We’ve reached an understanding that an account is not merely the sum of transactions but that we need to look at each entity holistically.’
   The Center of Expertise and Excellence (CEE) is designed to educate Customs officers at ports of entry to be more consistent in their implementation of policies and procedures, identify the risks for regulatory violations and agency-caused shipping delays, and provide technical guidance to importers of pharmaceutical products, Smith said. The five- to 10-member team of commodity specialists will draw on issue experts within CBP as needed.
   The center is led by Anne Maricich, assistant port director for trade at Los Angeles International Airport and a former director of trade management at CBP headquarters. Maricich, who has been detailed to operate the CEE on a full-time basis from Los Angeles, said she intends to work with the pharmaceutical trade association and large companies to understand their challenges.
   ‘This is a concept that we’re going to test, and evaluate the results and make a determination if this is a way to go in the future and expand it to other industries,’ she said.
   In its report, COAC envisioned an even greater role for CEEs as centralized offices for processing entries from a specific industry sector on a quarterly basis, using their specific commodity expertise and data mining techniques to pinpoint high risk shipments.
   Leon Hayward, assistant director of field operations for trade and cargo security in New York City, will serve as the pilot Account Executive.
   Under the current system, the account manager provides advice on valuations, improving internal controls, determining customs bond sufficiency, documentation problems and other issues.
   ‘The small number of account managers is most certainly insufficient to cover the needs of approximately 862,000 importers. In fact, the number is insufficient to cover the top 3,000 importers that represent half of all entries filed and 73 percent of the value of all imports,’ COAC said in the white paper. ‘Allegedly, only the top 30 broker accounts by import line value are assigned to national account managers. After more than a decade, these statistics do not reflect a sincere commitment by CBP to make this program a reality or a success.’
   COAC recommended that the national account manager program be expanded to cover the top 3,000 importers and the 100 largest customs brokers. It conceded that hiring 400 additional account managers is unrealistic given the government’s budget problems, but said an interim improvement would be to use the Automated Commercial Environment’s secure Web portal to get a consolidated view of an importer’s trade activity and make risk assessments that way.
   The new Account Executive program builds on the account managers’ ability to use audits, advance rulings and other tools to address areas of compliance risk for importers, with the understanding that validations of trusted, low-risk shippers aren’t necessary on a transactional basis, Smith said.
   The Account Executive will work closely with auditors, ports of entry, risk targeting specialists and other experts to make sure everyone within CBP takes the most efficient, strategic approach when dealing with companies that have high compliance rates, ‘so we’re not looking at them 100 times when we don’t need to,’ she said.
   Cargo inspectors, import specialists and other enforcement staff in the field are expected to coordinate with the Account Executive if they pursue checks of a trusted importer.
   At the same time, the Account Executive’s role is to mentor customs officers about trusted accounts and use CBP’s systems to oversee their work by monitoring examination levels, requests for information, penalties and audits associated with those importers, Smith said.
   CBP is starting with one electronics company that already has an account and will gradually add other volunteers to the program from the same industry. As the program expands, CBP wants to learn how the Account Executive can interact with the CEE, she said.
   Meanwhile, CBP is still studying how to implement other COAC ideas, such as simplified customs entry and financial processing, she said.
   COAC proposed doing away with the customs entry and entry summary for importers with excellent internal controls and consistent compliance. Instead, the Importer Security Filing, which must be transmitted 24 hours prior to vessel loading overseas, would become the primary instrument for releasing a shipment. The trusted trade account would update the ISF, which includes a high percentage of the data found on the entry, with the value of each shipment as that information becomes available and then files a periodic entry to take care of duties, taxes and fees on a monthly or quarterly basis.