Senate's Customs Reauthorization Bill Would Require More C-TPAT Benefits, New Entry Facilitation Partnership Program

According to Senator Baucus, S. 1631 would direct Customs and Border Protection and Immigration and Customs Enforcement to make customs facilitation and trade enforcement a priority again. And it would provide the agencies with the tools and resources that they need to fully discharge those duties.

Additional Trade Benefits for C-TPAT Tier 1, Tier 2, and Tier 3 Participants

S. 1631 would require the DHS Secretary, acting through CBP and in consultation with a new Commercial Customs Operations Advisory Committee (CCOAC), the Trade Support Network, and the Senate Finance and House Ways and Means Committees, to develop and implement additional trade benefits to be provided to Customs-Trade Partnership Against Terrorism (C-TPAT) Tier 1, Tier 2, and Tier 3 participants.

Not later than December 31, 2010, the DHS Secretary, acting through CBP, would be required to submit to the Senate Finance and House Ways and Means Committees a report describing (as of the report's submission date) (i) the trade benefits provided to C-TPAT Tier 1, Tier 2, and Tier 3 participants; and (ii) the additional Tier 1, Tier 2, and Tier 3 trade benefits that have not yet been implemented.

(CBP would also be required to provide annual reports in 2011 and 2012 on the progress made in providing such additional trade benefits.)

New "Partnership Program" to Facilitate Entry

CBP would be required to establish a voluntary government-private sector program to be known as the "Customs Facilitation Partnership Program" to facilitate the entry of merchandise into the U.S. and to provide certain benefits to persons involved in the entry of merchandise into the U.S.¹ that meet or exceed the program's requirements.

Participants could receive targeting, clearance benefits. The benefits for Partnership Program participants would be those which the CBP Commissioner, after consultation with CCOAC, considers appropriate for facilitating entry of merchandise into the U.S., including having CBP:

take into account participation in the Partnership Program in assessing the risk posed by such persons for the purposes of commercial risk assessment targeting (as outlined in Section 211 of S. 1631); and

to the extent practicable, give priority to participants with respect to the clearance of merchandise after an incident in which merchandise entering the U.S. was found to pose a threat to the health or safety of consumers in the U.S.

Minimum requirements for participation. The CBP Commissioner would be required to establish minimum requirements for participation in the Partnership Program. In determining whether a person meets the minimum requirements for participation in the Partnership Program, the CBP Commissioner would consider the person's history of entering merchandise in to the U.S. and the person's compliance history (e.g., regarding maintenance of importer of record numbers, customs bonds, and promptly responding to CBP requests for information, etc.).

An applicant for the Partnership Program would be allowed to participate after the CBP Commissioner (i) certifies the person as complying with the minimum requirements discussed above and (ii) verifies the information contained in the person's application (pursuant to procedures, etc. outlined in S. 1631).

Partnership Program participants would also be required to be reverified pursuant to procedures outlined in S. 1631.

Non-compliance could lead to suspension of all/some of benefits. If the Commissioner determines, in conducting a reverification, that the person fails to meet the requirements for participation in the Partnership Program, or if the CBP Commissioner is unable to reverify that the person meets the necessary requirements, the CBP Commissioner would be able to suspend all or some of the benefits provided to the person under the Partnership Program until the Commissioner is able to reverify that the person meets those requirements.

If a person participating in the Partnership Program intentionally provides false or misleading information to CBP in the application, during the verification process, or during the reverification process, the CBP Commissioner would have to, in addition to any other penalty provided by law, deny to the person the benefits under the Partnership Program and prohibit the person from further participation in the Partnership Program.

S. 1631 establishes an appeal process for persons whose application to participate in the Partnership Program is denied or whose benefits have been denied or suspended.

Congressional Consultation on Supply Chain Security MRAs Would be Required

S. 1631 would require the DHS Secretary, not later than 30 days before entering into a Mutual Recognition Arrangement (MRA) or similar agreement between the U.S. and a foreign government providing for mutual recognition of supply chain security programs (e.g., C-TPAT), to consult with the Senate Finance and House Ways and Means Committees.

(The U.S. has already signed MRAs with New Zealand, Canada, Jordan, and Japan. See ITT's Online Archives or 07/06/09 news, 09070605, for BP summary of the U.S. and Japan signing a MRA for the U.S. C-TPAT and Japan's Authorized Economic Operator programs.)

Commercial Customs Operations Advisory Committee

Effective June 30, 2010, S. 1631 would repeal the statute that established the Departmental Advisory Committee on Commercial Operations of U.S. Customs and Border Protection and Related Homeland Security Functions (COAC) and would require the Treasury and DHS Secretaries, not later than June 30, 2010, to jointly establish a new Commercial Customs Operations Advisory Committee (CCOAC).

S. 1631 would allow the CBP Commissioner to transfer the members serving on COAC to the new CCOAC.

According to S. 1631, CCOAC would be comprised of 20 individuals, not more than ten of which could be from the same political party, who would serve a term of up to four years, and may be reappointed to subsequent terms (but may not serve more than two terms sequentially).

The duties of CCOAC would be to:

advise the Secretaries of Treasury and DHS on all matters involving the commercial operations of CBP and ICE, including advising with respect to significant changes that are proposed with respect to agency regulations, policies, or practices;

provide recommendations to the Secretaries on improvements to CBP and ICE commercial operations; and

perform such other functions relating to CBP and ICE commercial operations as prescribed by law or as the Secretaries jointly direct.

The new CCOAC would meet at least four times a year and submit an annual report on its activities to the Senate Finance and House Ways and Means Committees (as does the current COAC). CCOAC would also be allowed to submit additional reports directly to the Senate Finance and House Ways and Means Committees.

¹Persons involved in the entry of merchandise into the U.S., including intermodal transportation systems providers, contract logistics providers, air, land, and sea carriers, customs brokers, importers, and forwarders.

(See ITT's Online Archives or 08/07/09 and 08/13/09 news, 09080715 and 09081305, for previous BP summaries on S. 1631.)

Senate Finance Committee press release (dated 08/06/09) available at http://finance.senate.gov/press/Bpress/2009press/prb080609.pdf.

Senate Finance Committees section-by-section summary available at http://finance.senate.gov/sitepages/leg/LEG%202009/080609%20Customs%20Section%20by%20Section.pdf.

S. 1631 available at http://finance.senate.gov/sitepages/leg/LEG%202009/080609%20Customs%20Reauthorization%20Bill.pdf.

Senator Baucus' floor statement on S. 1631 (dated 08/07/09) available at http://finance.senate.gov/press/Bpress/2009press/prb080709.pdf.