CBP Provides Update on Pharma and Electronics Account Pilots
During recent trade events1, U.S. Customs and Border Protection officials provided an update on both of CBP’s management by account pilots -- the Centers for Excellence and Expertise (CEE) pilot for the pharmaceutical industry and the Account Executive (AE) pilot for selected companies in the electronics industry.
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AE and CEE Pilots Have Been Running Since November 2010
As part of its efforts to strengthen its relationships with its trade and business partners, CBP decided to launch the CEE in Los Angeles and the AE pilot in New York on November 1, 2010. (See ITT’s Online Archives or 10/26/10 news, 10102613, for BP summary announcing the November 2010 commencement of the pilots.)
CEE Pilot Goals Include Expertise, Trade Facilitation, and Enforcement
According to CBP officials, the CEE pilot, which is being used to facilitate trade and manage risk within the pharmaceutical industry, is a way for CBP to build a knowledge base for the pharmaceutical industry. Officials note that CBP has been losing expertise and the CEE concept is a way to build expertise and increase uniformity.
The goals of the CEE pilot are to:
- raise the level of CBP’s expertise in the pharmaceutical industry by working with the trade and the Food and Drug Administration (FDA);
- increase the facilitation of legitimate trade through risk segmentation; and
- improve enforcement efforts against counterfeit pharmaceuticals and substandard drugs being imported.
Most imports from small number of compliant importers. CBP officials also discussed lessons learned from the CEE pilot, including the fact that the vast majority of pharmaceuticals are imported by a small number of highly compliant importers.
CBP has learned that 90% of pharmaceutical trade is coming in through 2% of importers and that a large number of these importers are trusted traders involved in trade partnership programs (such as the Customs-Trade Partnership Against Terrorism (C-TPAT) and Importer Self Assessment (ISA) programs).
In contrast, CBP has also learned that there are a large number of importers bringing in low-value pharmaceuticals, which raises concerns about counterfeit pharmaceuticals2.
Trade facilitation opportunities identified. During the course of the pilot, CBP and the trade have been able to identify various obstacles to trade facilitation facing the pharmaceutical industry, including redundant paperwork requirements, inspection difficulties, etc.
CBP Working to Expand/Improve Account Management with AE Pilot
The purpose of CBP’s AE pilot is to allow CBP to engage trusted partners in the electronics industry to facilitate trade while ensuring continued compliance with all import requirements.
CBP picked two companies (both of which hare trusted partners (i.e., C-TPAT and ISA) in the electronic industry to participate in the AE pilot. CBP has been working with these companies to expand on and improve the existing account management program.
Account executive has more authority. CBP notes that under the old account management program, account managers had little authority to require uniformity at the ports or make process improvements. However, under the AE pilot, the account executive has more authority to influence the ports and procedures.
Process improvements identified, implemented. During the course of the AE pilot, CBP has been working with the two electronics companies on ways to improve uniformity and consistency, such as allowing post entry amendments (PEAs) to be submitted to one central CBP office (rather than to individual ports with their individual requirements).
CBP Has Reviewed Pilots Periodically, Next Independent Evaluation in June
In response to a question about how CBP will measure the success of its pilots, officials note that CBP has been doing a review of the pilots against a series of agency milestones every six weeks and has conducted an independent mid-term evaluation of the two pilots. According to CBP, another independent evaluation is expected to be done at the end of June 2011.
CBP to Discuss Future of CEE and AE Pilots in Coming Weeks
In response to a question, CBP officials stated that its senior leadership will be discussing the future plans and options for CEE and AE over the coming weeks.
1CBP’s April 13-14, 2011 Trade Symposium, April 12, 2011 meeting of COAC, and April 3-6, 2011 NCBFAA conference.
2CBP also discussed its IPR enforcement efforts for the pharmaceutical industry at recent trade events. (See ITT’s Online Archives or 04/26/11 news, 11042622, for BP summary.)
(See ITT’s Online Archives or 04/27/11 news, 11042722, for BP summary of CBP’s discussion of plans to restart work on simplified processing.)