More input should be added to the mix before legislation is fully cooked.
As U.S. Customs and Border Protection works with members of the private sector to craft successor legislation to the Customs Modernization Act (Mod Act), CBP should ensure that it engages sufficiently with the customs brokerage community.
According to CBP Executive Assistant Commissioner for Trade Brenda Smith, CBP envisions four major pillars for the legislation: data access and sharing, “responsible party” definitions and enforcement, new processes and resource optimization.
The American Association of Exporters and Importers (AAEI) is drafting a proposal to update the current Mod Act, enacted in 1993, according to several people with knowledge of the proposal.
The Mod Act made major changes to customs brokers’ main responsibilities, but it remains to be seen whether any successor legislation would coincide with major changes to how brokers do business, said Jon Kent, legislative representative for the National Customs Brokers & Forwarders Association of America (NCBFAA) and founder of government affairs firm Kent & O’Connor.
“The whole thing with Mod Act 1 was a shift of responsibility from the Customs service to the broker and the importer, insofar as being responsible for the filing of entries,” Kent said. “That shift was a sea change, and I don’t see the sea changes anymore. Maybe they aren’t out there.”
There’s a potential for blockchain to play a larger role in brokers’ jobs in the future, and CBP should work toward a deeper dialogue with the trade community on how blockchain might improve brokers’ work, Kent said.
Speaking during the CBP 2018 Trade Symposium in Atlanta in August, Smith said CBP hopes to support legislation that will leverage its work on the Automated Commercial Environment (ACE) to more fully define the “One U.S. Government” concept, as well as update “responsible party” definitions and enforcement to account for new players in the supply chain, among other things.
While CBP officials have mentioned a potential Mod Act 2.0 during several recent speaking engagements, in the absence of the release of a hard proposal, it’s difficult to envision how the concepts discussed publicly will come to be defined in any drafted legislation, Kent said.
But for hashing out those concepts, CBP should take the pulse of independent brokers and forwarders sooner rather than later.
“The importers and brokers want things discussed at an operational level so they can see how it all fits together and how it will make their lives easier,” Kent said. “That’s a translation that needs to take place.”
The Commercial Customs Operations Advisory Committee, which advises CBP on policy matters, would be too limited a forum to vet the proposal as it comprises representation from 15 to 20 companies, he said.
Although prospects for a Mod Act 2.0 may look hazy at this moment, the trade community should ensure that any legislation contains clear direction on how CBP should implement any statutory requirements, Kent said, mentioning that CBP’s rollout of modernized drawback procedures established through the Trade Facilitation and Trade Enforcement Act of 2015 has been disappointing.
“We’ve all had experiences where we’ve passed legislation and not had the result we wanted from the people writing the regs,” Kent said. “Now it seems like it’s entered a different universe. It passes to Congress, it’s got private-sector support, then it gets shipped over to CBP and CBP does whatever it wants — within limits.”
But a long road likely remains before a congressional committee even considers a Mod Act 2.0, and there’s virtually no chance the would-be legislation passes in NAFTA reimplementing legislation, Kent said, noting the first Mod Act was enacted as part of 1993 legislation implementing NAFTA in its current form.
The first Mod Act involved a lot of give and take between different members of the industry and was “incubating” a great deal before it passed, he said.
“You can’t take a bill to the [House] Ways and Means Committee and expect to pass it if there’s controversy or if it’s not been shared elsewhere,” Kent said. “They want something that’s sort of got a stamp on it, that says, ‘Yeah, all parties agree to this, now we’ll take a look.’ And they will. But they want something that’s cooked. This is way, way away from that.”
Smith during her speech also mentioned the potential for a dedicated customs funding stream, which would help ensure that CBP’s infrastructure will evolve at the speed of commerce.
It appears as though CBP remains in the precursory phases of considering any Mod Act legislation.
I know the agency is not on a formal timeline with this and that it has several more immediate responsibilities, such as administering trade remedies.
But whenever CBP decides to move Mod Act 2.0 discussions out of this initial phase, it should remember to collect input from a wide swath of the brokerage industry that it regulates.
According to CBP Executive Assistant Commissioner for Trade Brenda Smith, CBP envisions four major pillars for the legislation: data access and sharing, “responsible party” definitions and enforcement, new processes and resource optimization.
The American Association of Exporters and Importers (AAEI) is drafting a proposal to update the current Mod Act, enacted in 1993, according to several people with knowledge of the proposal.
The Mod Act made major changes to customs brokers’ main responsibilities, but it remains to be seen whether any successor legislation would coincide with major changes to how brokers do business, said Jon Kent, legislative representative for the National Customs Brokers & Forwarders Association of America (NCBFAA) and founder of government affairs firm Kent & O’Connor.
“The whole thing with Mod Act 1 was a shift of responsibility from the Customs service to the broker and the importer, insofar as being responsible for the filing of entries,” Kent said. “That shift was a sea change, and I don’t see the sea changes anymore. Maybe they aren’t out there.”
There’s a potential for blockchain to play a larger role in brokers’ jobs in the future, and CBP should work toward a deeper dialogue with the trade community on how blockchain might improve brokers’ work, Kent said.
Speaking during the CBP 2018 Trade Symposium in Atlanta in August, Smith said CBP hopes to support legislation that will leverage its work on the Automated Commercial Environment (ACE) to more fully define the “One U.S. Government” concept, as well as update “responsible party” definitions and enforcement to account for new players in the supply chain, among other things.
While CBP officials have mentioned a potential Mod Act 2.0 during several recent speaking engagements, in the absence of the release of a hard proposal, it’s difficult to envision how the concepts discussed publicly will come to be defined in any drafted legislation, Kent said.
But for hashing out those concepts, CBP should take the pulse of independent brokers and forwarders sooner rather than later.
“The importers and brokers want things discussed at an operational level so they can see how it all fits together and how it will make their lives easier,” Kent said. “That’s a translation that needs to take place.”
The Commercial Customs Operations Advisory Committee, which advises CBP on policy matters, would be too limited a forum to vet the proposal as it comprises representation from 15 to 20 companies, he said.
Although prospects for a Mod Act 2.0 may look hazy at this moment, the trade community should ensure that any legislation contains clear direction on how CBP should implement any statutory requirements, Kent said, mentioning that CBP’s rollout of modernized drawback procedures established through the Trade Facilitation and Trade Enforcement Act of 2015 has been disappointing.
“We’ve all had experiences where we’ve passed legislation and not had the result we wanted from the people writing the regs,” Kent said. “Now it seems like it’s entered a different universe. It passes to Congress, it’s got private-sector support, then it gets shipped over to CBP and CBP does whatever it wants — within limits.”
But a long road likely remains before a congressional committee even considers a Mod Act 2.0, and there’s virtually no chance the would-be legislation passes in NAFTA reimplementing legislation, Kent said, noting the first Mod Act was enacted as part of 1993 legislation implementing NAFTA in its current form.
The first Mod Act involved a lot of give and take between different members of the industry and was “incubating” a great deal before it passed, he said.
“You can’t take a bill to the [House] Ways and Means Committee and expect to pass it if there’s controversy or if it’s not been shared elsewhere,” Kent said. “They want something that’s sort of got a stamp on it, that says, ‘Yeah, all parties agree to this, now we’ll take a look.’ And they will. But they want something that’s cooked. This is way, way away from that.”
Smith during her speech also mentioned the potential for a dedicated customs funding stream, which would help ensure that CBP’s infrastructure will evolve at the speed of commerce.
It appears as though CBP remains in the precursory phases of considering any Mod Act legislation.
I know the agency is not on a formal timeline with this and that it has several more immediate responsibilities, such as administering trade remedies.
But whenever CBP decides to move Mod Act 2.0 discussions out of this initial phase, it should remember to collect input from a wide swath of the brokerage industry that it regulates.
