COAC Advocates Broad, New "Account Based Processing" for Commercial, Product Safety, and Security Purposes

"Account Based Processing" for Virtually All Interactions with Filers/Importers Designated as Trade Accounts

COAC's states that CBP should adopt Account Based Processing (ABP) as a fundamental business model for all commercial, product safety and security operations.

CBP should (1) develop an integrated ABP concept that encompasses virtually allinteractions with filers/importers designated as trade accounts with an emphasis on internal controls leading to accurate/compliant reporting for both CBP and Other Government Agencies (OGA) requirements; (2) conduct a comprehensive review of each of its major programs in the commercial, product safety and security arenas to determine how the ABP approach could be utilized as a key driver in all programs throughout the CBP enterprise, and (3) approach all new programs with this business model in mind.

COAC Recommends Working Group to Develop Implementation Plan

The white paper recommends that COAC and CBP begin a dialog to address any fundamental differences in their visions of how importers and brokers who qualify should be managed and the role of the account manager. COAC states that a working group consisting of importers, brokers/forwarders, carriers, and CBP personnel should be formed to discuss the issues and to develop an implementation plan.

CBP's Current Account Management Program Has Failed to Meet Goals

According to COAC, CBP's Account Management program has fallen well short of the original goals and design. It is estimated that CBP has less than 50 full-time National Account Managers (NAMs) and some 400 part-time Port Account Managers (PAMs). Allegedly, only the top 30 broker accounts by import line value are assigned to NAMs. COAC states that after more than a decade, these statistics do not reflect a sincere commitment by CBP to make the program a reality or a success.

COAC also notes that CBP has placed a greater emphasis on establishing Accounts for the programs that are of a higher priority to CBP (e.g., ACE accounts and Customs-Trade Partnership Against Terrorism accounts). COAC states that it does not understand the rationale that a "fully managed account" for both security and trade would not serve both the importer and CBP better in the long term.

COAC's Vision for ABP Concept

COAC states that CBP should consider creation of an Integrated ABP concept that encompasses trade compliance, informed compliance, security, intellectual property rights, import product safety and information technology.

NAMs should manage top 3,000 importers, 100 brokers - NAMs should be considered to manage the top 3,000 importers and top 100 brokers to act as the primary CBP contact and communication point with coordination responsibilities for all trade and security interaction between CBP and the trade accounts.

ABP should also be expanded to small and medium importers via brokers - Thought should be given as to how ABP can be expanded to encompass both small and medium enterprises (SME) by providing a role for qualified brokers managing customs business on behalf of their SME clients.

Commercial, security, interagency, and IT components - COAC's idea of an ABP system includes commercial, security, interagency, and information technology account components.

"Centers of Expertise" for Specific Industrial Sectors at Ports

COAC recommends that CBP consider establishing "centers of expertise" for specific industry sectors (e.g. automotive, information systems hardware, aerospace, textiles, apparel, pharmaceuticals, etc.) and trade associations in concert with the NAM program.

The goal would be to achieve more industry commodity expertise, greater uniformity of treatment for specific product categories, and promote informed compliance. Trade associations could assist the NAM if a classification or particular safety violation should occur and they would need assistance.

Quarterly processing of certain entries for Trade Accounts. The concept would be to designate a few specific units or ports that would be responsible for specific industry sectors. The designated import specialists or commodity experts would be responsible for a concentrated focus and intimate knowledge of the specific commodity area for classification, valuation, etc. All entries for Trade Accounts would be processed quarterly for those commodities at the appropriate "center".

Expand concept to include brokers. COAC states that the Centers of Expertise concept could be expanded to include the brokerage community. By focusing on filer code, the brokerage ISA program could be used to include qualified segments of a broker's customer-base.

ABP Benefits for CBP and Trade Accounts

COAC states that if an ABP approach (as described above) can be agreed upon and adopted, it has the potential to benefit both CBP and the importing community in the following ways (partial list):

Reduced processing time. More efficient entry process for both CBP and importers/filers by reducing entry processing and review times;

Add'l monetary "float." Quarterly filing of entries and payment of applicable duties provides importers the financial benefit associated with the time cost of money, or what is commonly known as the "float";

Green lane treatment. CBP receives advanced data permitting participant importers to get green-lane treatment at the border, while CBP has the ability to make better use of their limited resources; and

Uniformity. Centralized entry filing to a specific CBP team, a team of trained commodity specialists, will benefit importers and CBP with consistent decisions, uniformity in handling and be a more efficient use of CBP's latest technology and systems to ensure compliance while facilitating legitimate trade.

COAC white paper (adopted 05/06/09) available at http://www.cbp.gov/xp/cgov/trade/trade_outreach/coac/meetings/05062009_meeting/coac_processing.xml.