On September 27, 2016, the Trade Subcommittee of the Committee on Ways and Means of the U.S. House of Representatives held a hearing on “Effective Enforcement of U.S. Trade Laws.” The Commissioner of U.S. Customs and Border Protection (CBP), R. Gil Kerlikowske, appeared before the Subcommittee to give testimony regarding the agency’s efforts to improve enforcement of U.S. trade laws and provide an overview of the agency’s implementation of the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA).
In addition to Commissioner Kerlikowske’s testimony, the Trade Subcommittee invited individuals and organizations to submit a written statement for consideration on the topic. In response to this invitation, the Southern Shrimp Alliance today submitted a statement on the importance of robust implementation of TFTEA by CBP.
In particular, the Southern Shrimp Alliance’s statement emphasized five aspects of the new law that, if implemented by CBP, would significantly improve enforcement.
First, CBP was given authority to access important early information regarding shipments to U.S. ports for commercial risk targeting operations and analysis. Although CBP cannot use this information for commercial enforcement purposes, access to this data will greatly improve the agency’s risk targeting operations by focusing on problematic shipments and facilitating legitimate trade. CBP must develop and adopt regulations that implement Congress’s intent that this information be used for commercial risk targeting purposes.
Second, CBP was ordered to establish an importer risk assessment program in order to improve collections of duties. A recent report by the U.S. Government Accountability Office (GAO) identified a series of risk factors that characterize shipments for which duty payments are evaded. Any risk assessment program adopted by CBP should account for the GAO’s findings and recommendations regarding nonpayment risks.
Third, CBP was ordered to establish an importer of record program that would collect information regarding importers, including information sufficient to identify linkages and affiliations between various importers. As explained in the recent GAO report, CBP officials believe that an importer owing nearly $170 million to the U.S. government continued to import merchandise into the United States under a different name while avoiding payment of its debt. For this reason, the importer of record program must obtain more information than CBP currently receives in order to prevent companies from closing down and opening up under new names to avoid payment obligations to the U.S. Treasury.
Fourth, CBP was also ordered to create regulations establishing minimum standards for customs brokers and importers verifying the identity of an importer. As with the CBP’s importer of record program, CBP’s regulations should improve the agency’s ability to identify linkages and affiliations between various importers.
Fifth and finally, the Department of Homeland Security and the Department of the Treasury are required to submit a report regarding security and revenue measures related to merchandise transported in bond through the United States. The Southern Shrimp Alliance has repeatedly raised concerns regarding questionable “in bond” shipments. CBP has been responsive to those concerns, but the information available regarding “in bond” shipments appears to be very limited and it is unknown whether “in bond” shipments are fully reconciled to confirm that they have left the United States. Should there be significant entries that are unreconciled, any joint report submitted by the Departments should explain the reasons for the lack of reconciliation and measures CBP intends to adopt to improve the reconciliation process.
Read the Southern Shrimp Alliance’s October 11, 2016 written comments here:
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The Southern Shrimp Alliance Submits Comments to Congress Regarding the Effective Enforcement of U.S. Trade Laws
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