Customs Modernization Bill Would Benefit From More Trade Facilitation Provisions, Lawyer Says
The Customs Modernization Act draft bill in the Senate is largely a customs enforcement bill, not a customs modernization bill, Sidley Austin attorney Barbara Broussard said in an interview, but she's hopeful that some carrots can be added to the sticks in the current approach. She said traders would really like to be able to file entry summaries monthly or quarterly, similar to the way Customs reconciliation is allowed, rather than having to do entry summaries within 10 days of goods' entrance into commerce. Sen. Bill Cassidy, R-La, recently requested stakeholder input on the draft bill.
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Allowing each company to file monthly would save money, both by saving employees' time, possibly by saving on broker fees, and possibly by saving on merchandise processing fees, she said. Broussard said that in order to change the way that merchandise processing fees are charged, you would have to revise other statutes, as well. "It’s understood that that maximum may need to cap out at a higher threshold," she said, with regard to the MPF.
Even though companies would have to contract with brokers less often if the entry summaries could be filed monthly, Broussard acknowledged that brokers would likely charge more, since there would be more data to prepare. But, she said, with a more predictable flow, "More importers would be able to bring some of this in house," she said.
At the time that the Trade Facilitation and Trade Enforcement Act was coming together, it seemed that CBP was open to moving in the direction of monthly filing for entry summaries, she said. But in the 21st Century Framework that CBP has been discussing with the Commercial Customs Operations Advisory Committee (COAC), the agency has been "more focused on data and less on facilitation," she said. "TFTEA did have both the carrot and the stick."
Broussard said she expects comments submitted to Cassidy to question the proposal to allow CBP to use advance data for commercial enforcement. Sidley Austin had issued an insight on the draft bill that talked about how this change is problematic (see 2111120049). She said the import security filing (ISF) may be provided by the exporter, who may not be familiar with Harmonized Tariff Schedule codes to the 10-digit level, since the HTS is only harmonized to six digits internationally. "This is earlier data so it’s not necessarily better data," she said. Currently, the entry data, provided so that goods can be released, is the second time CBP gets data on shipments. Broussard said it would be helpful if the ISF data could be edited in order to submit the entry.
Along the same lines, Broussard said it would be customs modernization if companies could, instead of doing a post-summary correction, edit the entry summary and flag that it had been changed. She said even if CBP still needed a post-summary correction to be a separate step, if they allowed importers to do it on their own, and not pay their broker to do so, that would be attractive to the trade community.
She said a real effort at customs modernization should also modernize some of CBP and partner government agencies' internal processes. She noted that drawback still liquidates manually, and she suggested it should be automated, just as the acceptance of entry summaries is. When it's done manually, she said, "it certainly leads to greater efforts on the importer side," as there are more questions to answer.
Broussard said the fact that Cassidy's office emphasized that this is a draft, and that they want to hear from businesses (see 2111030035), gives her hope that the bill, when introduced, will be more balanced between enforcement and facilitation. "Hopefully, they’ll take the comments they get back seriously," she said.