American ShipperTrade and Compliance

Customs brokers feel pinch of government shutdown

Various duty refund programs remain on hold as numerous CBP employees are on furlough during the federal government shutdown.

   Imports continue to enter the United States through the facilitative and compliant hands of thousands of customs brokers, but various duty refund programs remain on hold as numerous Customs and Border Protection staff are on furlough during the federal government shutdown. 
   “CBP is not sending out any refunds, including drawback refunds, and that hurts, especially if the broker or the importer was expecting a refund,” said Amy Magnus, president of the National Customs Brokers and Forwarders Association of America (NCBFAA). 
   Drawback is a refund of customs duties paid on imported materials that are either exported or used in the manufacture of exported articles. With appropriate documentation, an exporter can receive up to 99 percent of duties paid.
   “The liquidation process remains, but even if (drawback) refunds are generated at liquidation, they will not be paid until the shutdown ends,” said Dave Corn, vice president of one of the nation’s oldest drawback specialists, Comstock & Theakston Inc., and co-chairman of the Association of American Exporters and Importers’ Drawback and Duty Deferral Committee. “The impacts from the lack of payment are obvious; having payments restored is the No. 1 priority.”
   For some of the nation’s largest importers, these drawback refunds could easily be in the hundreds of thousands to millions of dollars. 
   “Hopefully when the government is back on line, the refund checks will be processed immediately as many of our members rely on receiving these funds,” Magnus said.
   Another problem for customs brokers is not having access to CBP Automated Broker Interface client represents to answer questions or provide clarifications.
   “Brokers rely on the ABI client reps to assist in troubleshooting when something gets hung up in the system,” Magnus said. “Sometimes it’s our own software, but sometimes it’s on CBP’s side. The time spent trying to resolve these seeming minor issues has increased greatly without the assistance of our client reps.”
   “The OT Drawback email policy folks are furloughed too, so in this time of extreme transition for drawback, we will have to wait for policy and guidance on Section 301 duties for TFTEA (Trade Facilitation and Trade Enforcement Act of 2015) claims, changes to privilege applications based on new regulations, and any necessary updates to the Drawback CATAIR and error dictionary,” Corn explained. “Very simply, the trade has questions that cannot be answered at this time.”
   “Not having ACE (the Automated Commercial Environment) updated for the 301 exclusions will also create needless work in the form of post summary corrections since we have the exclusions now, but we cannot file accordingly,” Magnus said, who also serves as director of customs affairs and compliance for customs broker, A.N. Deringer.
   Megan Montgomery, executive vice president of the NBCBFAA, said the nation’s largest trade association representing customs brokers is “doing our best” to keep its members up to date on the impacts of the federal government shutdown. 
   In addition to providing a stream of updates on its website, NCBFAA sends out multiple email notices each week, especially following CBP’s biweekly trade update calls, she said.
   “We’ve had many of our members ask us for permission to share our updates with their clients, and so we’ve created a downloadable copy of our blasts for that purpose,” Montgomery said. “We find that our members are grateful for timely information, always with the caveat in this extraordinary situation that as better information becomes available we will get that out into our members hands as soon as we can get a blast together.”
    She added, “Our members are doing an excellent job on behalf of their clients working with the government to keep good flowing across the border, and CBP is doing an excellent job keeping the lines of communication with the trade open.”

Chris Gillis

Located in the Washington, D.C. area, Chris Gillis primarily reports on regulatory and legislative topics that impact cross-border trade. He joined American Shipper in 1994, shortly after graduating from Mount St. Mary’s College in Emmitsburg, Md., with a degree in international business and economics.