CBP won't be able to accept drawback claims filed in ACE under the revised processes that come from the Trade Facilitation and Trade Enforcement Act when they take effect on Feb. 24, 2018, the National Customs Brokers & Forwarders Association of America said in a May 9 email. The agency lacks the funding to complete the TFTEA-related programming and "CBP believes that it needs a full year to program all agency requirements," according to the NCBFAA. Still, CBP is expected to finish necessary regulatory changes by the statutory deadline, even if ACE isn't ready for the TFTEA changes.
Weeks out from the first compliance date for new requirements under the Foreign Supplier Verification Program on May 30, confusion persists among the trade community as to what must be done to comply and who is required to do it. Despite pleas from the NCBFAA for a “soft landing” (see 1705020041), the Food and Drug Administration has so far not explicitly indicated a policy of enforcement discretion, though agency officials have agreed to be “mindful” of the rule’s impact on industry (see 1704040024). Given the rule’s complexity and past experience, FDA will likely take a lenient approach, using the initial compliance period for education, though particularly egregious cases could see early enforcement.
Concern is deepening over “widespread misunderstanding and confusion” among importers about the Food and Drug Administration’s upcoming Foreign Supplier Verification Program requirements, the National Customs Brokers & Forwarders Association of America said in a May 1 letter to FDA Director of Enforcement and Import Operations Doug Stearn. “Absent an interim ‘soft landing’ for FSVP entry data by the FDA, we fear disruption at the border for food shipments after May 30,” the date many importers must first begin complying with the new regulation (see 1602120038), the NCBFAA said.
Acting CBP Commissioner Kevin McAleenan met with National Customs Brokers & Forwarders Association of America President Geoffrey Powell and NCBFAA lobbyist Jon Kent last week to discuss ACE, the trade group said in a May 1 email to members. Among the topics discussed were "ACE Post CORE," the Border Interagency Executive Committee and "the ACE Downtime Policy," the NCBFAA said. Powell also met with Valerie Neuhart, acting director of CBP’s Office of Trade Relations, "to discuss NCBFAA's role at the Customs Trade Symposium," and with Jeff Nii, director of the CBP Interagency Collaboration, to discuss the BIEC and partner government agency data requirements, it said. Stuart Schmidt, compliance manager at UPS Supply Chain Solutions and a member of the NCBFAA Customs Committee, also attended, the association said.
Allen Lund Company, a California transportation broker, and Santos International, a Texas freight forwarder and customs brokerage, partnered to create a new company, Allen Lund said (here). The new company, TransKool Solutions, is located in Mission, Texas, and will offer warehousing, load consolidations and customs brokerage, Allen Lund said. "Managing operations will be Kristi Salinas, with support from both Allen Lund Company and Santos International," it said.
Thirteen associations expressed support for the confirmation of CBP commissioner nominee Kevin McAleenan in a letter (here) to Senate Finance Committee Chairman Orrin Hatch, R-Utah, and ranking member Ron Wyden, D-Ore. The groups said McAleenan is fully familiar with the ongoing rollout of ACE and regulations drafted pursuant to the Trade Facilitation and Trade Enforcement Act. The groups requested that the Senate “expedite” his confirmation process to “solidify the political leadership” of the agency at a time when significant trade enforcement and policy are central to the overall White House agenda. A spokeswoman for the committee's GOP majority didn't comment, but Hatch noted the CBP commissioner vacancy during a committee meeting April 25, and asked for the Trump administration to submit nominees for open trade positions promptly, pledging to move them through his committee "quickly."
The National Customs Brokers & Forwarders Association of America is urging the Food and Drug Administration to allow a grace period for new Foreign Supplier Verification Program requirements that begin to take effect May 30, the NCBFAA said. “Given the complexity of the rule and widespread confusion in the trade, NCBFAA is urging FDA to allow a period where some or all of the new data elements are optional and to allow FSVP importers time to develop their supplier verification programs before enforcement begins,” the association said in an email to members. NCBFAA President Geoff Powell has been in contact with FDA's director of Enforcement and Import Operations, Doug Stearn, and has requested a meeting in early May to discuss further the need for a "soft landing" on May 30.” Stearn recently said FDA will be “mindful” of the challenges posed by the new requirements, which include submission of new data elements in ACE on the identity of the FSVP importer (see 1704040024). The May 30 compliance date applies to certain raw agricultural commodities and products from larger suppliers subject to human food preventive controls regulations (see 1602120038).
A buying agent for a related manufacturing company meets the standard for "financial interest" for importing goods in the U.S. as the importer of record, CBP said in a April 6 ruling (here). The buying agent, Overseas Food Trading, sought a CBP ruling on its ability to file entries for imports of cooking oils from Pompeian, a sister company that manufactures oils and vinegars. Overseas and Pompeian entered an agreement that would have Overseas serve as the importer of record, among other things, the company said. The two companies have the same owner but operate separately, CBP said.
The National Customs Brokers & Forwarders Association of America endorsed President Donald Trump’s nominee for CBP commissioner, Kevin McAleenan, saying that he understands how to resolve ongoing challenges associated with e-commerce processing, the rollout of ACE and revision of customs broker Part 111 regulations, according to a letter the group sent to the Senate Finance Committee (here). In the letter addressed to committee Chairman Orrin Hatch, R-Utah, and ranking member Ron Wyden, D-Ore., NCBFAA President Geoffrey Powell added that McAleenan has demonstrated that CBP can work with its 49 partner government agencies in ensuring that imports meet requirements for health, safety, intellectual property, antidumping and countervailing duty enforcement, and “enlightened labor standards.” McAleenan "has demonstrated leadership within CBP that gives us confidence in the agency and should provide you assurance that it will meet its responsibilities in enforcement and in the facilitation of trade,” Powell said. “NCBFAA is strongly supportive of his nomination.” Powell urged the committee to hold a confirmation hearing “as soon as committee procedures and schedule permit.” Senate Finance didn't comment.
Industry groups asked the U.S. government to work to repeal restrictions on NAFTA drawback and duty deferral and to expand ACE, in response to the Commerce Department’s request for information (here) on regulations that hamper domestic manufacturing. Although negotiators included the drawback and deferral restrictions in NAFTA to prevent China from using Mexico as a platform for component parts to be exported to the U.S., several companies involved in duty preference programs for foreign investors and domestic firms have nevertheless convinced suppliers from Asia and Europe to establish production facilities in Mexico to replace imports from non-NAFTA sources, according to the Duty Drawback Coalition’s comments (here). To counter the negative effects of NAFTA drawback restrictions on foreign-owned manufacturing plants in Mexico, Mexico established Sectoral Promotion Programs, which reduce several standard duty rates, the coalition said. Canada has reduced duty rates to mitigate the effects of the NAFTA drawback restrictions as well, the group said.