21CCF Will Enable Deep Supply Chain Reports to CBP Without Audit

Changes to the de minimis statute, whether excluding China or changing the threshold, have gotten the most attention in Congress of any possible customs legislative change, but CBP says its 21st Century Customs Framework will not touch the issue.

During an interview in Boston during the CBP Trade Facilitation and Cargo Security Summit, Brandon Lord, executive director of trade policy and programs, said, "unfortunately, some people have started to think that's what we're going to do. We'll enforce whatever level Congress sets on de minimis. That will not be part of 21st CCF."

Lord, whose office leads the modernization effort, added during the interview last week: "We always try to remind folks, too, that the vast, vast majority of what comes in under de minimis is well below $200."

The de minimis threshold was changed from $200 to $800 in 2016.

As CBP officials have said before, their request to Congress will include asking that there be changes to the entry statute so that parties other than exporters can send data to CBP -- not just final product manufacturers, but suppliers way back in the supply chain. "One of the things I envision is a progressive entry filing. So the idea that parties further up the supply chain can begin sending us data on importation earlier than we've ever received it previously," Lord said. "The idea there is we're getting that data, we're getting that information from new entities, and it might be data that's sort of non-traditional, outside of the traditional manifest or entry. And then, when that formal entry is in fact filed, we already know a lot about it."

He said those submissions could provide evidence for rules of origin under a free trade agreement, or a supply chain free of forced labor, or, in the case of cars and trucks imported under USMCA, that the wages paid to workers met the wage threshold.

Currently, this sort of detail is only needed with a CBP audit, or if goods are detained under suspicion of forced labor.

Lord said: "That is a super negative way to show off your investment! We're on the hunt here for a positive way to every day, demonstrate to us, 'Hey, I have made investments in my supply chain, and any day at any given moment I can certify I'm in compliance with environmental rules, forced labor rules, whatever might be applicable to the supply chain."

While Lord said those submissions would "offer some kind of facilitative benefit," the law will not say what that will be. He said regulations will be used to detail the benefits. "We have a whole process of consulting with the trade community about what would be a smart way to do that," he said.

There has been a lengthy process of consultation with the Commercial Customs Operations Advisory Committee about the legislative proposal for 21st CCF. Lord said CBP cannot push some of COAC's facilitative requests, because they touch on partner government agencies' processes. However, he repeated that CBP is receptive to a government-wide Customs Trade Partnership Against Terrorism program that includes the PGAs.

COAC has asked for the statute to clarify that importers or exporters can "iteratively provide data as it becomes available in the supply chain," and CBP will ask Congress to do so.

The ability to share data about enforcement actions with more businesses is something that CBP has been seeking for a long time, and that will be part of CBP's 21st CCF proposal to Congress. Lord said, "we have a lot of challenges right now, where we take an enforcement action, and there are certain entities in the supply chain that might have an interest in knowing about that, but right now, as our laws are constructed around the Trade Secrets Act and the like, it's difficult for us to always share, and share timely and in a more fulsome way."

If CBP had permission to share non-public information about intellectual property with rights-holders, it believes that could accelerate the identification of counterfeits.

That element was also part of the discussion draft submitted by Sen. Bill Cassidy, R-La. (see 2111030035). Office of Trade Executive Assistant Commissioner AnnMarie Highsmith, who also participated in the Boston interview, said CBP didn't want to detail how its proposal and Cassidy's draft might differ. But, she said, "Mr. Cassidy's discussion draft covered just a portion of the areas that we have been working with the COAC to address."

The agency has projected that it would be ready to go to Congress with its request before the end of the year (see 2301180028). When asked if it's on track to reach that deadline, Smith replied: "I hope so."

She said CBP has started having briefers with staffers on the relevant committees, and the first briefings with members. "I think that there's a lot of positive momentum, and I'm anxious to have our final meeting with the COAC, have their final recommendations and move on to the next stage," she said.