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In Customs’ (CBP’s) Shoes

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Last week, President Trump signed two Executive Orders (EO) that will affect the use of U.S. Customs and Border Protection (CBP) trade resources. The first is a direct call to step up enforcement of trade laws with a special emphasis given to anti-dumping and countervailing duty cases. The second EO focuses on the trade deficit. The deficit numbers are driven by the value that is declared to CBP upon entry of goods. While there may be some minor adjustments by the Commerce Department’s Census Bureau, generally such information is gleaned from CBP entry data. Ultimately, CBP will be called upon to ensure that the value declared upon entry is correct, thus giving the Administration a more accurate accounting of the deficit. It is clear that trade law enforcement will be on agency’s front burner. After the EOs were published, Acting CBP Commissioner Kevin McAleenan stated “the men and women of CBP are committed to enforcing the trade laws of the United States to defend the economic competitiveness of domestic industries against unfair trade practices and dangerous counterfeits that could harm consumers.”

In recent work with a new client, I encountered a situation where CBP had written to the company informing them that they were at high-risk for not being compliant in their warehouse operations. They were told that the number of audits and reviews would increase substantially. In a cursory review of the company’s processes and procedures our team concluded that they had, in fact, gone the extra mile to ensure compliance. With this information in hand, a meeting with CBP was scheduled.

In the meeting, when CBP officials discussed their concerns, it immediately became evident that they had a lack of understanding of how the company conducted its business. CBP port officials then said, “put yourself in our shoes.” That immediately resonated with us.  We realized that CBP can’t possibly understand every particular nuance of every business from record keeping to supply chain dynamics. In addition, businesses, like government, tends to take the use of acronyms to new levels. Armed with this request to look at it through CBP’s eyes, we went back into the company, using the CBP regulations as the guide and began an in-depth review. Every process was examined, and backup documents were provided to substantiate each procedure used in a logical progression.

In a follow-up meeting with CBP, the client was able to concretely illustrate compliance procedures. As a result, CBP officials had a clear understanding of company practices, and the dreaded high-risk label was removed.

Companies can make it easier for CBP, and ultimately themselves, by ensuring that their business operations are transparent and easy to understand by regulators.

As both the Congressional and Executive Branches look to CBP to effectively enforce trade laws taking a few steps in their shoes will go a long way for your corporate regulatory well-being.