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Priority Trade Issues (PTI)

W Coast Trade Symposium recap: E-commerce is THE hot topic

Wednesday, May 31st, 2017

2017 w coast trade symp

 

CustomsNow attended CBP’s West Coast Trade Symposium last week in Phoenix.  The theme was “Looking Ahead Together: What’s Next for Trade?”  Generally, CBP stated that they would continue to focus on the Priority Trade Issues, as well as the Executive Orders issued by the Trump Administration in 2017.

CBP also intends to build on the foundation of ACE to perform smarter targeting of inbound cargo and will be working to reduce the amount of regulations as required (for every new regulation two must be eliminated.)

Finally, CBP is struggling to stay on top of the explosive growth in the number of small packages shipments driven by e-commerce.

E-commerce is clearly a pressing issue for CBP and here is why:

  • E-commerce sales were valued at $3.4B on Black Friday and are expected to exceed $500B annually by 2020
  • 52M small packages are shipped annually via express carriers
  • 130M small packages ship via air cargo
  • 275M small packages ship via the mail.  This compares to 100M in 2010, up 20% year over year
  • In a recent 5-day operation at JFK airport, CBP checked 3000 mail packages and seized over 1500 due to Intellectual Property Right (IPR), Agriculture, and illegal drugs reasons.  The operation was halted in just 3 days due to the sheer number of seizures.

CBP is just not staffed to handle and examine this volume of packages and they are trying to overcome this shortfall.  For instance, CBP will be piloting a program in Dallas whereby any small package shipments that need to be examined will have to be delivered to a Centralized Examination Station (CES) as opposed to CBP inspectors driving to the various air carrier facilities.

It was explained that most air and express carriers do a good job of prescreening their shipments to the US to ensure they are compliant with US laws and regulations.  Therefore, the criminals are turning to shipping via the mail since there is no prescreening performed at present.

The United States Postal Service is not required to provided CBP with advanced data that would allow CBP to target suspect shipments as they do with all other modes of transportation.  The STOP Act, which is working its way through congress, will address this deficiency.  The Global Direct Entry program is also helping the postal service to identify Trusted Traders for certain wholesalers so that CBP can concentrate on those shippers which are not in this program.

Another concern is that many of these packages fall under the $800 de minimis amount, also known as a Section 321 entry, and, therefore, do not have to be entered with CBP.  The intent of the de minimis rule is that a formal entry must still be made if “additional information, bonding or protection is required.”  Many shippers ignore this requirement and are therefore not declaring their drug shipments to the appropriate Partner Government Agency (PGA), specifically the FDA.

CBP is very concerned with the increase in small packages moving via the mail that contain Fentanyl, a very dangerous synthetic opioid and they shared this story.  Recently an Inspector brushed the lapel of his uniform to remove a substance.  He later overdosed on Fentanyl but, thankfully, survived. CBP is looking at utilizing spectrometers to examine small packages.  This would allow them to screen for illegal drugs without having to open the packages.

Incidentally, the only way, presently, to declare a Sec. 321 shipment to CBP is via the manifest.  E-commerce providers want the ability to declare them via ABI and CBP is investigating this option.  CustomsNow learned that the Trade Leadership Council is considering the creation of a new entry type code of ‘86’ for Sec. 321 shipments.  This way the appropriate PGAs can be declared and there will be no duties or fees due to CBP (in 2010 Congress estimated that if the de minimis amount was raised to $1,000 that would result in only $42M in lost revenue compared to the total amount of duties paid annually which was $37B in FY 2015.)

In addition to illicit drugs, CBP is focused on IPR infractions (“If you can make it, the criminals will fake it.”) It is estimated that companies involved with IPR employ 42M Americans and constitute 40% of our GDP.  Unfortunately, there were 32K IPR seizures last year with an estimated value of $461B.  86% of these shipments came from China and that number climbs to 88% when you add in Hong Kong.  Many of these shipments move as small parcel.

 

LA trade professionals: Attend WITOC’s State of the Trade 2017 event

Tuesday, January 31st, 2017
Screen Shot 2017-01-30 at 3.16.41 PM 

Join Women In Trade — Orange County for its annual – The State of Trade – Symposium and Luncheon. Hear leading industry members and top local government officials provide a recap of 2016 and a look ahead of what to expect for 2017.

There will be speakers from CBP, FDA and CPSC that will present important industry updates that will affect all in 2017.

The lunchtime topic will feature a discussion of the different ways imports and exports will be affected by the 115th Congress and President-elect Trump.   Increase duties?  Tear up/renegotiate free trade agreements?  Border tax?  Trade war?  All will be discussed!

 

 

SPEAKERS:
Heather Litman, Trade Attorney
(Program Moderator)
Grunfeld, Desiderio, Leibowitz, Silverman & Klestadt
 
U.S. Customs and Border Protection
Anne Maricich, Assistant Director, Trade – Los Angeles Field Office
U.S. Consumer Product Safety Commission
Stacy Prosperi, Compliance Investigator, Office of Import Surveillance, Western Region
Food and Drug Administration
Dan Solis - Director of Import Operations LA District
EVENT DETAILS:
Date: February 15, 2017
Venue: Avenue of the Arts Hotel
3350 Avenue of the Arts
Costa Mesa, CA 92626
Cost:  Symposium - $120 Members ; $135 Non-Members
          Luncheon Only - $65 members ; $80 Non-Members
Registration after Feb.10, 2017, add $10 – No Cancellations or Refunds after Feb.13, 2017
register-now-button-pilll-red-hi

Free trade agreement (FTA) summaries updated

Wednesday, December 18th, 2013

US_FTA_Negotiations_as_of_May_2008In follow up to our post of March 20, US Customs has recently updated its first-ever side-by-side comparison of the United States’ non-textile free trade agreements (FTAs).  The comparison document, which has been “extensively expanded,” has been published in CSMS #13-000617.

At last, a free trade agreement summary

Wednesday, March 20th, 2013

US Customs has just published a long overdue side-by-side comparison of all existing US free trade agreements, such as NAFTA, CAFTA and UKFTA.

For now, the featured FTAs are limited to non-textile agreements.  CBP has not indicated when a similar summary of FTAs governing textiles will be available.

The summary makes it quite obvious just how complex these agreement truly are.  In addition to serving as an official reference tool, the document can help demonstrate to a trade professional’s senior management why appropriate resources are necessary to comply with their numerous and confusing requirements.

The FTA summary is available here.

Country of origin – how the Chinese honey industry flouted the rules

Thursday, December 15th, 2011

As recently reported on National Public Radio, members of the US honey industry have taken major steps to prevent the importation into this country of Chinese honey purportedly from other countries.

In response to anti-dumping concerns, in 2008 the United States imposed significant duties on Chinese honey.  Almost immediately, shipments of Chinese honey ceased, while imports of honey from China’s neighbors, such as Malaysia, Taiwan and Indonesia – with no commercial beekeeping history – increased markedly.

Scientific analysis of that honey revealed an absence of pollen present in those countries, but typical of pollen found in China, leading to charges of false labeling and fraud.

Now, with an sudden surge in honey imports from India, another Chinese neighbor, some members of the US honey industry have established True Source Honey, LLC, an organization that certifies foreign honey as authentically from the stated country of origin through audits, lab analysis and random inspection of honey producers.

Read or listen to NPR’s story, “Funny honey?  Bringing Trust to a Sector Full of Suspicion.”