CBP to Eliminate Penalties for Minor EEI Violations

CBP will eliminate penalties for minor violations of Census Bureau export filing requirements as part of its upcoming electronic export manifest rollout, said Jim Swanson, director of CBP’s Cargo and Security Controls Division.

Speaking during the National Customs Brokers & Forwarders Association of America Conference on Sept. 23, Swanson said CBP is working with the Census Bureau to give exporters 10 days to correct wrong information. He said that if the exporter has a “manifest on file” with the correct information, the exporter will not receive a Census violation. “You still have to correct it,” Swanson said, “but we’re not going to issue you a penalty for those.”

Swanson hinted at the change in April, saying CBP wants to stay away from “parking ticket violations” (see 1904170063). The agency plans to remove penalties for violations such as incorrect date of export or port of export as long as they’re corrected, Swanson said. He said exporters will “see that benefit immediately.”

The change is part of a broader approach CBP plans to take toward penalties once it has implemented export manifest, which Swanson said in August was close to “operational” (see 1908220029). CBP wants to emphasize penalizing “serious issues,” Swanson said. "Obviously for fraud and other areas you're always going to potentially be subject to penalties ... it's not off the plate that people could receive a penalty simply for the fact that they intentionally misrepresent something on a manifest."

But the minor penalties did little to force serious violators to comply with export filing requirements, Swanson said, and proved too costly for an agency with “limited resources.” Swanson said CBP lost money issuing violations and collecting penalties, which often involves multiple phases of litigation, “a significant number of hours invested,” wasted paper and postage.

“It sounds petty, but all those things add up,” Swanson said. “We end up spending more money than we take in.”

Swanson also said CBP is examining its rationale behind issuing penalties to force compliance, suggesting a different approach may help. “It’s a routine compliance penalty regime that continues to issue the same penalties for the same party over and over again. Is that right? Or do we need to find another way to do it?” Swanson said. “We think this does a lot of that, and we hope that you'll see that benefit immediately.”

CBP will still rely on penalties to enforce some export-related violations, Swanson stressed. "The threat of penalties still has to be there,” he said. “But we need to look at whether there's a better way to do that. We should always be striving for that. And we think this is one of those better ways to gain compliance.”

Swanson did not provide a date for the rollout of electronic export manifest but said it will be ready “fairly shortly.”

“It’s a big change. We’re trying to get there,” he said. “We’ve been working very hard.”