*This is the sixth entry in our EC 2017 Trade Symposium Series. Our first entry discussed the opening remarks and missions priorities as set out by Executive Assistant Commissioner, Brenda Smith. Our second entry recounts the President of the National Customs Brokers and Forwarders Association's, Geoff Powell's, interview with Acting Commissioner Kevin McAleenan. Our third entry discussed North American Collaboration for Cargo Processing. Our fourth entry discussed the evolution of CBP's practices in response to the evolving trade environment. Our fifth entry discussed the intelligence enforcement panel, moderated by Executive Assistant Commissioner Brenda Smith.
As such a prominent challenge to CBP and the trade community, the topic of E-Commerce warranted its own panel. While the topic is so prevalent and had inevitably been discussed throughout the day, the group of CBP Officials on this panel, led by Executive Assistant Commissioner for Field Operations, Todd Owen, took a deeper dive on the enforcement challenges faced by CBP in processing 1.4 million parcels/day entering the U.S.
Containerized cargo has been the predominant method of moving goods around the world for over 50 years, and accordingly, the large majority of customs enforcement activity is container-based. Dealing with small packages shipped via e-commerce is a challenging new issue for CBP. The relationships between buyer and seller in e-commerce transactions are different and CBP has less information on these individual parties as opposed to large importers. Customs authorities will have to work with the private sector to address this risk in the e-commerce environment. CBP will also have to take a global leadership role at the World Customs Organization (WCO) in presenting solutions on handling e-commerce challenges.
Collaborating with the Postal Service
Owen cited improved collaboration with the U.S. Postal Service (USPS) in the last 18-24 months. International packages entering the U.S. via the USPS do not require the same extent of data elements to be shared with CBP as do, for example, express consignment packages shipped through FedEx, UPS, or DHL. This makes it more difficult for CBP to conduct targeting operations on USPS packages. However, CBP and the USPS are currently engaging in pilot programs, primarily at JFK Airport, to share additional data and improve risk management.
The USPS, Inspector in Charge, David G. Bowers, mentioned that 90% of the foreign e-commerce being shipped to the U.S. was from 20 countries. USPS has also created a new anti-narcotics team and had met with counterparts in Hong Kong, other Southeast Asian nations, and worldwide counterparts across the Universal Postal Union (UPU) to improve advance electronic data sharing. This is challenging as the 190 UPU members have varying standards, training, and practices for the use of advance data.
Fentanyl Detection Challenge
The most prominent health and safety hazard byproduct of the increased volume of e-commerce shipments has been the increase in the smuggling of fentanyl, a highly dangerous synthetic opioid. More fentanyl is moving through air mail in smaller, but more potent volumes, up to 90% pure. Fentanyl at the land border is generally mixed with other narcotics, often at only 10% purity, but in higher volumes. Fentanyl seizures by CBP doubled from 2016 to 2017, but with limited resources to tackle the problem, CBP would highly value any new fentanyl detection technologies.
Informal Entries/Raised De Minimis
Part of the challenge is that, as part of the TFTEA in 2016, the threshold for what is considered an ‘informal entry’ or the de minimis, was raised from $200 to $800. Meaning any shipment below $800 in value does not require duty or the same level of data CBP would have previously had to conduct risk management activities.