CBP Allowing for 'Unprecedented Connectivity' With Industry During Pandemic, NCBFAA Says

The National Customs Brokers & Forwarders Association of America is seeing “an unprecedented connectivity with CBP” so far through the COVID-19 pandemic, said Alan Klestadt, customs counsel to the NCBFAA, during an April 21 webinar with lawyers for the association. “We're speaking with senior headquarters officials on a daily basis, multiple times a day, talking with them about developing policy, whether it is statement processing, duty deferral,” said Klestadt, a lawyer at Grunfeld Desiderio. That's particularly important when others in government “don't appreciate the granularity” of detail that customs brokers need to “effectively implement the policy decisions and the policy goals that the administration is pursuing.”

The back-and-forth with the agency during informal conversations about the needs of customs brokers also allows for advance notice in some cases, Klestadt said. That further facilitates the processes, he said. Although COVID-19 is at the forefront of everyone's minds, the association remains engaged on other issues, Klestadt said.

Among those issues is a recent CSMS message on pipe spools that seems to instruct filers to “deconstruct a fully assembled imported product” so “that trade remedies could be assessed.” The “issue arises from a series of scope rulings” from the Commerce Department “that the individual components of these products” were within the scope of antidumping duty orders and “therefore should be reported separately,” he said. That is “contrary to the General Rules of Interpretation and to years of customs precedent in terms of how you classify,” he said. It's concerning “because it's an opening of a new theory potentially of tariff classification which will be extraordinarily difficult for the brokers to administer,” and “if it's pipe spools today, why won't it be automobiles tomorrow or paper making machines the next day?” he said. The NCBFAA has just started to get engaged on that issue, he said.

There's also been a longtime discussion around digital recordkeeping and server locations (see 14010101), Klestadt said. CBP has previously been adamant that the servers used for cloud storage of the records be located within the U.S., he said. But, in recent weeks, CBP issued a ruling to software provider WiseTech that involves the use of a primary server in the U.S. and a backup server in Australia, Klestadt said. CBP ruled that the arrangement is allowable because the primary server is in the U.S., he said. “That's the first time customs has accepted offshore record storage in any format” and seems to be “the beginning of a crack in the door,” he said.

The NCBFAA is also taking on a recent trend of carriers defining within bills of lading that merchants include customs brokers or forwarders, said Ed Greenberg, a lawyer with GKG Law. As a result, the carriers have started making claims against brokers and forwarders “who have simply ordered cargo moved but on behalf of the shipper or even on behalf of the carriers,” he said. “We've gotten the attention of the chairman of the Federal Maritime Commission and I suspect” that “we will see something out of the commission in the near future that is going to address what I think is an inappropriate expansion of the avenues the carriers take to try and collect unpaid freight or demurrage charges.”