Robert Bowman Contributor
From Logistics and Transportation
logistics, international trade and supply-chain management
10 Predictions for U.S. Customs and Border Protection in 2014
Big changes are underway at U.S. Customs and Border Protection (CPB), which appears to be shifting from a single-minded focus on fighting terrorism to one that includes regulating trade.
That’s the view of Florida attorney Peter Quinter, who chairs the Customs & International Trade Law Group of GrayRobinson, P.A. He has come up with a list of 10 predictions about where CPB is headed — and, consequently, what importers and exporters need to be concerned about — in the year ahead.
1. His first — that CBP will get a new, permanent commissioner — is already well on its way to being fulfilled. Following up on a promise made last summer, President Obama has nominated Richard Gil Kerlikowske for that post. He should bring some much-needed continuity to the agency, which has seen a series of acting heads over the past several years.The former U.S. drug czar — Kerlikowske directed the Office of National Drug Control Policy – has promised to focus on a number of initiatives aimed at streamlining the flow and inspection of imports and exports. Quinter said the appointment reflects a shift in CBP’s mission, one that balances trade enforcement with antiterrorism efforts. The Senate held a friendly confirmation hearing on January 15.
2. Despite continuing battles over federal spending and sequestration, CBP will get a big budget increase. The agency’s budget for fiscal 2014 was $12.9 billion, up 6.5% over the prior year. Expect it to go even higher in FY2015. Quinter said the funding direction has been up ever since 2003, when Customs became part of the Department of Homeland Security and took on responsibility for immigration enforcement as well. “It’s been more planes, guns, boats, people and equipment,” he said.
3. The “do-nothing” Congress will pass a Customs reform bill, which has been around in one form or another for at least seven years. The measure will underscore the agency’s new direction of regulating trade. Quinter predicted that customs inspectors will spend less time stopping and frisking individuals, and more on examining merchandise in containers. The change will make it even more imperative that traders, brokers and carriers join the Customs-Trade Partnership Against Terrorism (C-TPAT), a “voluntary” program which grants expedited processing to participants. It is now being expanded to include foreign companies, Quinter said.
4. As part of a return to its original mission, CBP will perform a record number of importer audits, aimed at companies attempting to avoid payment of antidumping duties. And don’t think you’re in the clear if you hear nothing right away — the agency has five years in which to audit paperwork on goods flowing into the country. What’s more, said Quinter, an audit almost always results in the finding of a violation, and payment by the importer.
5. The U.S. will continue to crack down onintellectual property violations. CBP will place a high priority on examining and seizing imported counterfeit merchandise. Whether that effort will have any effect on rampant violations in China is another question. Quinter said it’s getting tougher to buy counterfeit merchandise on the street in China, but reports suggest that plenty of sellers still hawk fake merchandise behind closed doors.
6. CBP will place more officers in U.S. embassies and consulates, to smoke out counterfeit goods and narcotics destined for the U.S. Customs will step up inspection of containers before they’re loaded aboard ship. “Why wait until the container comes here?” asked Quinter. Few people are aware of the extensive role that U.S. agents play in fighting narcotics trafficking in other countries, he added.
7. The U.S. Government Accountability Office will issue yet another critical report about CBP’s system for selecting the cargoes that should be considered high-risk, and flagged for inspection. GAO doesn’t believe Customs has proved that it knows which shipments to examine for drugs, counterfeit goods or nuclear materials. “I don’t think the targeting systems are very good,” said Quinter, “and they’re not getting any better.” CBP’s methods are far more random than the agency claims, he said.
8. A record number of licensed customs brokers will be counseled by CBP’sBroker Management Offices around the country — and assessed penaltiesfor various violations of the law. Customs and other government agencies are demanding an “overwhelming” amount of information from brokers today, and errors are rampant. A counseling session might be limited to a meeting with a CBP import specialist. Or it could result in a penalty of $30,000 per violation and even revocation of a broker’s license. You can thank the burgeoning CBP budget for the extra staff that makes the program possible.
9. C-TPAT will expand its membership categories to include warehouses and trucking companies. Currently the program is restricted to importers, airlines, railroads, ocean carriers, customs brokers, third-party logistics providers and port authorities. Beyond that, CBP will likely extend membership to exporters shipping to the U.S., said Quinter.
10. CBP employees will see a significant bump in pay, having been forced to accept “insultingly low” increases over the past few years. Previous raises haven’t even kept pace with inflation. A decent increase, Quinter said, would be at least 3% to 5%, given the current low inflation rate. The likely result is more motivated Customs officers — and a need for importers and exporters to be even more vigilant about complying with an ever-expanding body of