CBP consolidates trade functions in new office
U.S. Customs and Border Protection announced plans Wednesday to reorganize its trade policy and enforcement functions under a single office in response to complaints from industry and Congress that trade support functions have taken a back seat to security.
The new Office of Trade Relations will replace the Office of Strategic Trade, and include the trade and textile enforcement groups now within the Office of Field Operations, as well as the Office of Regulations and Rulings (OR&R). Effective Oct. 15, the new office will be responsible for centralizing policy and enforcement efforts to ensure importers and exporters comply with the nation’s trade laws.
“The creation of the Office of Trade underscores CBP’s strong conviction that partnerships and outreach are necessary to facilitate legitimate trade and to effectively enforce trade laws,” Commissioner Ralph Basham said in a statement. “By providing the trade with a focal point within CBP, we can better align our resources with the greatest risk while ensuring the fastest possible clearances for complaint trade.”
Officials said the merger consolidates the chain of command on trade compliance issues, including targeting and analysis of antidumping duty circumvention, intellectual property rights crimes, revenue protection, textile transshipment, as well as trade facilitation activities such as the Importer Self-Assessment program for avoiding customs audits and the use of national account managers to assist international traders in meeting customs requirements.
Daniel Baldwin, assistant commissioner for Strategic Trade, will head the Office of Trade Relations. OR&R will continue to be lead by Sandra Bell, but will no longer exist at the assistant commissioner level. Her new title will be executive director of OR&R.
Vera Adams, executive director of trade enforcement and facilitation in Field Operations, will take over the Office of Commercial Enforcement and Targeting, and Cindy Covell, executive director of the Office of Regulatory Audit within Strategic Trade, will retain her office and role, Baldwin said.
CBP will soon name someone to head the Office of Trade Policy and Programs, he added.
Over the years many of the offices involved in trade policy have been split up. The Office of Strategic Trade was created in 1995 as part of a broad reorganization within the legacy Customs Service. The Office of Strategic Trade primarily provides support to customs officers in the field by researching and analyzing trade data and documents to look for patterns of criminal activity related to avoiding duties or trade restrictions, and smuggling activity. It also is responsible for gauging the level of industry compliance and oversees the audit program.
“We can be much more effective if we have a consolidated chain of command and bring these offices back together” to ensure consistent trade policies and programs, Baldwin said.
CBP’s move in effect preempts legislation on Capital Hill instructing CBP to establish an Office of Trade to streamline trade functions to make it easier for industry to comply with regulations. The language was quietly inserted last week by Senate Finance Committee Chairman Charles Grassley, R-Iowa, in Title IV of the Port Security Improvement Act currently being debated in the Senate.
Baldwin said the Senate intent dovetail’s with Commissioner Basham’s own initiative, and that he decided to move forward to create the Office of Trade because the two sides are in agreement. CBP is working closely with the Senate and House to make sure all sides are in lockstep on the reorganization, he said.
Industry representatives reacted with tentative optimism, saying they wanted to see how the reorganization shakes out in practice.
“I can tell you that the commissioner’s effort to give commercial trade an opportunity to have more visibility at Customs is strongly appreciated,” said Jon Kent, a partner with Kent & O’Conner, and counsel to the National Customs Brokers and Forwarders Association of America.
There is general support within the trade community for any actions that place more emphasis on expediting trade, said Mary Alexander, chair of the Joint Industry Group and director of government relations for Panasonic Corp. of North America. Basham is scheduled to call prominent members of the trade community Thursday to brief them on his thinking, she said.
But some members of the trade bar who have worked at CBP or closely with OR&R are expressing concern that the move could undermine the independence of the body within CBP that provides legal standing for trade enforcement efforts.
“It appears that the emphasis is being placed on enforcement, not facilitation,” said Bruce Shulman, counsel to Stein Shostak Shostak Pollack & O’Hara. “In my view, it’s not a good idea to have the people who are making the case (penalties and seizures) and the people who are deciding the case in the same office. You don’t want the prosecutor in charge of the judge.
“If you have a non-lawyer in charge of what is a legal shop, the policy considerations will likely overrule the legal considerations.”
Shulman, who worked for 13 years in OR&R, said the new structure would result in more litigation for the agency.
He also questioned whether OR&R would have the clout to get additional resources by going through an additional layer of management, and whether the reorganization would derail former Commissioner Robert Bonner’s initiative to speed up rulings by OR&R.
Shulman said he supported the consolidation of the trade support functions as long is it didn’t include OR&R.
But other lawyers dismissed concerns that OR&R would ignore the law to please policymakers.
“There’s always the possibility that things are going to get mucked up, but there’s not a tremendous amount of concern. If they were to set the system up so policy dictated, that wouldn’t last very long. Major corporations would take that on. There’d be a lot of hell to pay on the Hill,” said Susan Kohn Ross, a trade attorney in Los Angeles.
'It is important for offices such as Regulations and Rulings to retain their independence and objectivity,' CBP's Baldwin responded. 'In fact, we have the same consideration for our Office of Regulatory Audit where objectivity and independence is required when performing our verification and analysis of import reviews. I am confident we will be able to resolve these issues while retaining the arm's length relationship needed when performing our legal or audit roles.'
It remains to be seen whether the new structure will lead to more enforcement action, but that is not the original intent, Alexander and Kohn Ross said.
“It’s not unreasonable to anticipate that when you begin to provide a greater emphasis on trade facilitation that a natural byproduct is that the agency has a greater understanding of who is more compliant or could use extra help,” Kohn Ross said.
“The fact that they are shaking the agency up is a good indication that Basham has come in and is taking control,” she said. “Hopefully it gets Congress off their back. But the devil is in the details. I think it’s a good first step for Basham.”