CBP Plans 8-10 More CEEs for Add'l Industries, with AE as Component

(The current CEE pilot is being used to facilitate trade and manage risk within the pharmaceutical industry. The current AE pilot aims to allow CBP to engage trusted partners in the electronics industry to facilitate trade while ensuring continued compliance with all import requirements. Trade sources confirm that both pilots have been extended until October 1, 2011, with CBP subsequently planning to make the pharmaceutical CEE permanent and add an electronics CEE with AE as a component.)

CBP Seeks Trade Input on Expanding CEEs, Areas of Value, Etc.

CBP is completing its evaluation of the initial pilot phase of the pharmaceutical CEE and the electronics AE and is seeking trade input regarding expansion of the pilots on the following topics:

• 8-10 new CEEs for different industries. CBP has notionally discussed creating approximately 8 to10 new CEEs throughout the U.S., each focusing on a different commodity or industry area, in order to cover the range of imports coming into the U.S. CBP would like to know what the industry breakouts should be for the CEEs.
• Location of CEEs. CBP would like industry feedback on the location of the new CEEs and on what criteria should be used to evaluate such locations. CBP is interested to know if CEEs should be located in close proximity with importers and if this would make it easier for CBP to work with importers on compliance, brand security, and facilitate other information.
• Areas of greatest value for trade. CBP would like to know the areas where the pilots would have the greatest value to the trade and whether CBP is focusing on the right issues with its CEEs.
• CBP communication with trade. CBP also seeks feedback on the best way to communicate to the various sectors of the trade community about the pilots, particularly small and medium-sized enterprises (SMEs). CBP noted that while its pilots primarily focused on importers, there are many other segments to the trade community that could benefit from the CEEs.

Pilot Accomplishments Since Last COAC Meeting

Under the CEE pilot, CBP aimed to facilitate legitimate cargo shipments by targeting enforcement at companies and shipments that were less than legitimate, and work with them more effectively to ensure compliance. Since the last COAC meeting in April 2011, CBP stated it has identified new challenges and noted its accomplishments in addressing them, which include the following:

• Removing unnecessary cargo holds. Both pilots have worked extensively to examine delays, both at the cargo release and the entry summary stage (or post-release stage). CBP found that a number of nonproductive examinations and document reviews occur, and that cargo holds are being placed for clerical type issues. Through the pilots, CBP has discovered a number of efficiencies for CBP as well as a number of transactional cost savings for importers, and is currently focused on removing such unnecessary holds.

• Sharing info for better port decisions. CBP has gaining information from pilot partners and passing it along to ports of entry. This provides CBP with a better understanding of the information it has an agency so that it can make better decisions at the ports of entry as to whether it needs to hold a shipment, examine it, or allow its release.

• Spreading best practices on counterfeit pharmaceuticals. CBP has worked closely with the trade community and law enforcement partners (such as U.S. Immigration and Customs Enforcement, ICE) to address counterfeit pharmaceuticals. CBP gained a lot of knowledge from brand security managers, ran specialized operations, and worked with ports of entry to spread best practices learned.

• Creating uniform, industry-based policy. CBP has worked with importers to understand their business processes within the pharmaceutical industry. This has given CBP the opportunity to put together industry-based policy to add clarity and transparency for the trade as well as for CBP employees on how to handle pharmaceutical imports. CBP states this is a step towards improving uniform enforcement.

Anticipated Changes for CEE and AE After October

CBP and COAC members also discussed what the trade should anticipate after the pilot phase for CEE and AE comes to an end in October. Within the CEE and AE, CBP is considering the following:

• AE to become part of CEE. To further facilitate trade, CBP may recommend that the AE become a component of the CEE so that there will be someone within CEEs to expedite cargo handling for particular industry groups.

• Remove entry criteria holding up shipments. CBP will continue to work with ports of entry on removing entry criteria that may be holding up shipments unnecessarily, monitoring holds that are placed for untrusted partners, and creating more expedited release.

• CEE to take on post-release process for trusted shipments. In the future, once past the release phase, CEE could take on post-release processes for trusted partner shipments. Rather than import specialists handling entry summary information, information would be sent to the CEE. The CEE would be a consolidated body for making uniform decisions and making uniform inquiries into trusted partner shipments.

• CEEs to provide trade with info, not CF 28s. CBP is increasing industry knowledge inside and outside the agency to raise awareness of how to contact CBP through CEEs. The presence of the CEE and the knowledge within them will make them a central place for trade to go for answers instead of having to generate a CBP Form 28 (Request for Information).

• Develop uniform, national responses. Regarding enforcement, CBP is working with targeting centers and ports of entry to develop national responses to identified risks. CBP wants its responses to be made in a holistic and more cohesive manner with greater visibility for the trade community. CBP states that it also aims to develop policy to address industry-specific issues to resolve some of the systemic issues within CBP.

• Locate CEEs near ports with high industry imports. Based on its experience in the pharmaceutical industry, CBP is considering locating new CEEs at ports of entry where high volumes of a particular industry's imports are coming through. CBP eventually plans for CEEs to have a virtual presence, which could extend their hours of availability.

• Resolve holds due to OGA reqs. In working in the pharmaceutical industry, CBP identified holds being generated because of the requirements of other government agencies (OGA). With electronic data submission and data being submitted less often, CBP noted that the pilots could be of value for those needing to comply with OGA requirements. CBP focused on this issue and worked with OGA partners to expedite cargo, and going forward, CBP would like to engage OGAs and importers in discussions on meeting OGA requirements.

Possible Pilot Benefits for Trusted Trade, SMEs, Etc.

The following are the possible benefits of expanding the CEE and AE pilots:

Managing Trusted Trade by Account Would Allow CBP Focus on High-Risk Trade

By managing by account, and not by transaction, CBP will be able to move cargo more efficiently and respond to questions more effectively. CBP stated that this would free up its resources, enabling CBP to focus enforcement on noncompliant traders. This could represent a savings to trusted partners in the long run because the more effective CBP can be with intellectual property enforcement, the more effective it can be against smugglers of fake or trusted partner products. CBP could also seek prosecution of smugglers and take counterfeit goods off the street, making trusted partner brands more secure.

CEEs as External and Internal CBP Point of Contact Could Expedite Trade

It was stated that the idea of CEEs being a CBP point of contact, both internally and externally, for expertise having to do with a particular industry could benefit the trade. As CEEs get to know an industry and individual accounts better, the movement and expediting of trade would be facilitated. Having this focal point of information about industry and particular accounts would also enable CBP to more confidently release cargo.

SMEs Would Gain a Direct Line of Communication with Customs Through CEEs

It was noted that SMEs may not have enough volume to warrant direct communication with ports of entry or engagement with customs; rather, SMEs often operate through a broker or a service provider. Therefore, the value of the CEEs to SMEs may simply be the fact that they would have the ability, through the CEE, to have a line of communication with customs, which doesn't exist today.

Having a center of expertise available for a specific business' industry would also be of value from a knowledge standpoint, as SMEs will have someone/someplace to go if they have a question. SMEs are consequently going to be more compliant and may engage in a partnership program where they have not in the past. This would also benefit CBP because more compliant businesses would reduce its workload.

Raise Number of Participants by Targeting Associations, Service Providers, Etc.

CBP has struggled to reach the SME segment of the trade community or others that are not aware of the resources from the CEE and AE pilots. To engage new SMEs and increase the volume of pilot participants, meeting participants suggested that CBP engage entities like the U.S. Chamber of Commerce, which has three million members, most being SMEs. Engaging in dialogue with such entities could help bring more SMEs into the pilot program.

CBP could also reach SMEs through their service providers, or through brokers. CBP could ensure that brokers have the correct channels to direct their clients when they need additional information. CBP notes that such communication channels are not yet in place or they're unknown to brokers and other service providers.

¹The Departmental Advisory Committee on Commercial Operations of U.S. Customs and Border Protection and Related Homeland Security Functions (COAC). Note that this article is based on a recording of the COAC meeting, and not on official CBP documents.

(See ITT's Online Archives or 08/22/11 news, 11082214, for BP overview of the August 18 COAC meeting.

See ITT's Online Archives or 08/23/11 news, 11082315, for BP summary of draft simplified entry, summary, and payment models presented at the August COAC meeting.

See ITT's Online Archives or 06/10/11 and 06/13/11 news, 11061007 and 11061303, for BP summaries of CBP announcing its intention to extend the CEE pilot to 8-10 more industries and CBP considering to make the CEE and AE pilots permanent.)

Executive summary of the COAC Trade Facilitation Subcommittee's recommendations for the CEE and AE is available here.