The passage of this law follows last October’s agreement by 12 would-be member nations on the terms of the Trans-Pacific Partnership (TPP) free trade agreement (FTA), which is still pending the approval of U.S. Congress and final ratification. While the new law provides tools and authorities for U.S. agencies to utilize in the current trade environment, its provisions will also be needed to implement and enforce the TPP or other major FTAs in the future.
Highlights of the new law include:
Technology and Modernization:
- U.S. Customs and Border Protection (CBP) is given access to funds from the Customs Commercial and Homeland Security Automation Account with the intent that these funds will be used for the development and completion of the Automated Commercial Environment (ACE) (Sec 106), the electronic trade processing platform currently being implemented by CBP. ACE serves as the platform for the U.S. government ‘Single Window’ program, the International Trade Data System (ITDS) (Sec 107). ITDS is a major U.S. government initiative aimed at streamlining required trade data submissions to dozens of U.S. agencies.
- The Centers for Excellence and Expertise (CEEs) are now formalized (Sec 110). The CEEs, which operate virtually from ten (10) locations around the U.S., have been a largely successful program for CBP since being rolled out in 2011. The objective of the CEEs is to increase uniformity of practices across U.S. ports of entry, facilitate the timely resolution of compliance issues, and further strengthen CBP’s knowledge on industry practices.
- There is a reaffirmed objective to ensure that companies participating in public-private partnership programs, such as the Customs-Trade Partnership Against Terrorism (C-TPAT), are receiving their due benefits, such as reduced inspections at ports of entry, in exchange for voluntarily providing trade data beyond what is legally required.
- Provisions for the preclearance of cargo in Canada and Mexico are expanded.
- The Importer Self-Assessment (ISA) (Sec 115) program is further formalized.
- The term for private sector members of the Commercial Operations Advisory Committee (COAC) (Sec 109) is extended from two (2) to three (3) years. Members may be reappointed, but cannot serve more than two terms sequentially. The Immigration and Customs Enforcement (ICE) Director is now instructed to participate in COAC meetings.
- A ‘known importer’ program is established that will require customs brokers to collect information about the identity of importers they do business for.
- Expanded enforcement and increased engagement with the private sector on protecting Intellectual Property Rights (IPR) (Title III). This includes activities conducted through the now formalized ICE National Intellectual Property Rights Coordination Center.
- Improved enforcement of Anti-Dumping/Countervailing Duty (ADCVD) (Title IV) laws and the timely distribution of those duties with interest to affected domestic producers.
- Expanded educational seminars for CBP Officers and ICE Agents to enhance their ability to classify and appraise imports.
- Requirements for additional reporting to Congress by the Government Accountability Office (GAO), the Commissioner of U.S. CBP, and other leaders; including reports related to metrics for public-private partnership programs, IPR enforcement, ADCVD enforcement, and strategic planning for improved trade facilitation and enforcement.
- CBP and the GAO are required to report on the development and implementation of ACE. CBP’s report will focus on their incorporation of all trade related documents across agencies participating in the Single Window system. The GAO’s report will focus on implementation of ACE across the other partner agencies.
- Amendments to current Merchandise Processing Fee (Sec 920) (MPF) or ‘Customs User Fee’ structures. The law formalizes CBP’s practice of allowing informal entries of up to a $2,500 value. These entries require less documentation, eliminate the need for a surety bond, and reduce the $25 minimum MPF to $2 for electronic filing submissions.
- The .3464% ad valorem rate (percentage of total value) used in part to calculate the fee for formal submissions would be extended through September 2025. This rate had been raised from .21% in 2011 when the U.S.-South Korea Free Trade Agreement (FTA) was put in place. As the MPF is waived for most goods moved under an FTA, there had been some speculation that the rate would again be altered as part of the TPP.