Consultant Allen Says 21st CCF Needs Tweaks; Says Mandatory GBI Coming

"One of the things CBP will tell you is their seizures and their penalties are extremely onerous, and they take a long time," she said. "Sometimes it takes 60 days to get a seizure notice -- that’s crazy!"

Allen, who was updating an audience at last week's Automotive Industry Action Group town hall, told them that senators who have introduced these bills have received about 250 recommendations from trade associations and companies that would be affected by a customs rewrite.

She highlighted the proposals to revise culpability, for instance, going from three levels of penalties, for negligence, gross negligence and fraud, to only two, for negligence and fraud. "No one in the trade was really behind that," she said. Allen used to be vice president for regulatory affairs at FedEx, and she said any penalty FedEx received from CBP "was always gross negligence," because even if they discovered their mistake within hours, that error was repeated thousands of times in that short period, due to the volume the express shipper handles daily.

Allen also said that the proposal that fraud cases go directly to court is a major issue. "That’s a lot of money," she said, referring to the need to hire lawyers to represent you. "I have seen lots and lots, in my 35 years, of fraud liquidated damages that were later dismissed."

She said CBP wants to do away with pre-penalty notifications, and similarly, she's seen many pre-penalty notifications not result in penalties.

Allen said there are challenges to truly modernizing customs because of congressional committee politics -- the committee that oversees Homeland Security is not the same one that oversees the FDA, which is not the same one that oversees the Animal and Plant Health Inspection Service. Allen said even if all submissions were electronic, ACE is not really a single window because the 47 partner government agencies have their own panes in that window. But the trade would love a true single window with mandated PGA participation.

Allen said trade interests are united in some requests for customs modernization, such as:

• accepting advance data from foreign parties, certified by brokers or other traditional entry filers
• recognizing parties with financial interest in the transaction
• reducing redundancy of data elements and having unform trade nomenclature among PGAs and CBP
• simplifying the post-entry process
• making antidumping and countervailing duties prospective
• providing a reciprocal right to make entry by accountable parties
• modernizing revenue collection.

On revenue, Allen complained that CBP is not able to make direct deposits. "If GSP [the Generalized System of Preferences program] passes retroactively, guess what, we’re all going to get checks," she said, adding sarcastically, "Woohoo! Why can’t you just Venmo me the money, [or] PayPal?"

Allen said CBP is concerned that a customs modernization package will become law, but no money will accompany it, so they want secured funding for keeping ACE updated.

Allen explained how a Global Business Identifier, a change CBP is working on, is central to supply chain tracing, needed both for forced labor and for supply chain resilience. She said a mandatory GBI "is not so far off."

She said not all trade associations are on board with progressive filing, with non-traditional parties involved in the transactions, but said if that comes to pass, CBP needs to establish a graduated standard of care for those sending data, "to allocate risk to appropriate parties. There needs to be culpability for everyone filing data, so that that data is true and correct."

She said some people ask why a GBI is needed, since there are IRS numbers to identify companies. She said not all companies have an IRS number. She said others ask how it is different from the Manufacturer ID, or MID. "MID is crap," she said bluntly.

An audience member asked if we will ever get to a point when everyone has a GBI. Allen said she thinks so. She said Dun & Bradstreet hasn't had as much take-up because, for so long, they charged for participating.