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Roundup of Developments at the CBP Trade Symposium

By Lara A. Austrins

Benjamin L. England Customs and Trade Team

Here’s a roundup of developments of interest to the transportation and customs broker communities which were announced at the Trade Symposium recently hosted by U.S. Customs and Border Protection (CBP) in Chicago July 23 – 24, 2019:

  1. Risk-Based Increases in Importer Bond Amounts

CBP officials emphasized several times at the Symposium that it has been issuing insufficiency notices on bonds to better reflect importers’ increased liability for Section 301 and Section 232 tariffs.  While the increase in premiums for higher value bonds in most cases is not terribly significant, as the face value of the bond increases, so does the sureties’ liability.  Increased liability has had a significant impact on the cash collateral that sureties are demanding in connection with ADD/CVD entries, and we wonder if similar cash collateral requirements will make their way into bonds securing entries subject to Section 301 and Section 232 duties as well.

  1. Potential for Increased Enforcement Actions

Knowledgeable CBP officials stated at the Symposium that “trade remedy enforcement” is “one of the major priorities” of the Centers of Excellence and Expertise (CEE).  Our experience is that the CEEs are bringing meaningful sophistication to trade agreement and trade remedy enforcement, with their greater expertise, product knowledge, sharing of information, and improved targeting models. 

Symposium participants told us that given the large duty increases imposed under Section 301 and Section 232 and the easy accessibility of unlawful transshipment and other methods for evading the tariffs, they expect a wave of CBP enforcement actions to hit starting approximately six months from now.  Indeed, CBP officials told reporters (but not attendees) at the Symposium that they would like Congress to amend the Enforce and Protect Act (EAPA) to expand the CBP’s current ability to investigate and punish antidumping and countervailing duty evasion to all duty evasion (including evasion of Section 301 and Section 232 tariffs).

Given these developments, now would be a good time for importers to increase their due diligence in assuring themselves of the actual origin of their goods.  If importers have not already done so, we believe that it would behoove them to conduct factory visits, verify the presence and good working order of production equipment, confirm factory purchases of raw materials sufficient to produce the goods they are importing, verify that an adequate, trained workforce is in place at the factory to produce their imported goods, etc.

  1. Changes to Broker Regulations

The customs brokerage community has long been waiting for the issuance of the proposed broker regulations, which would include changes to powers of attorney and cybersecurity requirements.  One major change anticipated in the proposed broker regulations will be the replacement of the district permit and national permit with one single permit that operates at the national level within the Customs territory of the United States.  Additional guidance will most likely be issued at some point addressing the factors customs brokers of varying sizes must satisfy to ensure that they are exercising responsible supervision and control over their customs business.  Knowledgeable CBP officials tell us that the proposed regulations are undergoing review, and we are hopeful that they will be published within the next year or sooner.

  1. Enhancements in Cargo Inspection on the Southwestern Border

CBP has received significant funding to put new, non-intrusive inspection systems in place on the Southwestern Border, which should significantly speed the flow of truck traffic.  Due to the strength of energy emissions from CBP’s current truck-scanning equipment at the border, drivers of trucks seeking to cross the border from Mexico are required to exit the cab before the truck is scanned.  However, CBP officials stated at the Symposium that new equipment will be put in place which will allow truck drivers to remain in the truck while the truck is scanned, thereby significantly speeding the pace of inspection (truck drivers will retain the option to exit the truck during scanning if they wish).

  1. Ways to Manage Risk Presented by Rapid Growth in e-commerce

Finally, the rapid growth in the e-commerce environment and how to manage the increased risks that come along with such growth were central discussions at the Trade Symposium.

This increase in e-commerce is further fueled by the fact that  the value of goods that can be imported by one person in one day free of duty and taxes, the so called de minimis value, under Section 321 of the Tariff Act of 1930, as amended, was increased in 2016 from $200 to $800 (“321 shipments”).  This increase in de minimis value along with the growing popularity of e-commerce has contributed to the exponential growth of low value shipments (321 shipments) crossing our borders over the past few years.

According to CBP 1.8 million 321 shipments are entering the United States daily.  The ease of online shopping clearly has changed consumer purchasing habits resulting in the growth of e-commerce, and the growth shows no sign of decreasing or leveling off.  At the Symposium, both CBP and FDA officials highlighted the greatly increased risk of entry of counterfeit goods (including counterfeit pharmaceuticals and health and beauty products) and other illicit goods via de minimis e-commerce shipments.

As per officials at the Symposium, CBP has taken the following actions to address these risks:

  1. Electronic Advance Manifest Submission for 321 Shipments by Truck

Advance electronic manifest submissions for all 321 shipments by truck must be filed in ACE in accordance with the guidelines specified in the Trade Act of 2002.  This requirement is in full effect and failure to include 321 shipments on ACE manifests could result in monetary penalties issued by CBP.

Prior to this year, 321 shipments were exempt from advance electronic manifest filing requirements.  However, the significant increase of 321 shipments by truck resulted in slower processing times and longer wait times at the borders, as CBP was unable to conduct risk assessments or perform advance targeting on 321 shipments.   As a result, CBP changed its policy at the beginning of this year to require electronic advance manifest filing submissions in ACE for all 321 shipments by truck.  While the current cargo manifest implementation guide states the maximum number of shipments is 9,999, the 9,999 shipments can be submitted multiple times against a single manifest using instructions which are provided for via a web link in CSMS #19-000156, which can be found at https://csms.cbp.gov/viewmssg.asp?Recid=24141&page=&srch_argv=19-000156&srchtype=Seq_Msg_Num&btype=&sortby=&sby=

As the advance electronic manifest submission in ACE of 321 shipments entering by truck is in full effect, the failure to include 321 shipments on ACE manifests may result in monetary penalties issued by CBP at $5,000 for the first offense.

  1. CBP Conducting Section 321 Data Pilot Program to Consider Advance Data Submission Requirements for Low Value Shipments

On July 22, 2019, CBP published Federal Register notice of its intention to begin a voluntary test to collect certain advance data for low-value entries that may be eligible for Section 321 exemptions. 

According to the notice, “CBP is conducting this test to determine the feasibility of requiring advance data from different types of parties and requiring additional data that is generally not required under current regulations in order to effectively identify and target high-risk shipments in the ecommerce environment.” See 84 FR 35408. 

CBP realizes that currently, it is not receiving sufficient advance information to determine the risk presented by 321 shipments. The purpose of the pilot is to allow CBP to use the advance information to improve its ability to effectively and efficiently identify and target high-risk shipments, including for narcotics, counter-proliferation, and health and safety risks.

Eligible participants that can join the pilot include carriers, customs brokers, freight forwarders, and online marketplaces of any size, location or commodity type, regardless of whether they offer delivery logistic services. 

The pilot applies to each Section 321 shipment destined for the United States, arriving by air, truck, or rail and will operate in all ports of entry utilized by the participants for Section 321 shipments.  It will not apply to any mail shipments, shipments arriving by ocean or shipments destined for a Foreign Trade Zone.

The benefits of participation may vary. One benefit is that CBP may expedite clearances for low-risk Section 321 shipments when enough test data has been received prior to the shipment’s arrival.

The pilot will begin Aug. 22, 2019 and operate for a one-year period.  Once the pilot program is completed, CBP will evaluate the results to determine whether to extend and/or expand the pilot to include additional participants.  It will also decide whether additional advance reporting requirements are necessary in the e-commerce environment.

  1. CBP Entry Type 86 Pilot

In addition to the test pilot for advanced data collection on Section 321 entries, CBP officials announced the creation of  a new entry type (Entry Type 86), which will allow customs brokers and importers to send Partner Government Agency (PGA) data in conjunction with the basic data elements for 321 shipments.  Use of this new entry type may alleviate the concerns raised by FDA and other PGAs regarding the potential for unlawful goods evading review through use of the 321 process.  CBP stated that it will be issuing a Federal Register notice in the near future regarding the pilot program to test the new Entry Type 86, and that it intends to roll out the new Entry Type 86 on Sept. 28, 2019.

Please contact me if you would like to get additional information regarding these or any other Customs and trade matters.

Lara A. Austrins is a member of Benjamin L. England & Associates’ Customs and Trade Team and concentrates on issues arising from the movement of goods between countries.  She regularly deals with U.S. Customs and Border Protection, Department of Commerce, and other agencies that regulate U.S. imports and exports. She can be reached by email at or at (410) 220-2800.

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