Finding Solutions to Cross-Border Challenges

Introduction

Good morning, everyone – and thank you, Jerry, for that gracious introduction. It’s great to be back in Florida, where, as many of you may know, I started my career in law enforcement.

Next month will mark my first anniversary as Commissioner of U.S. Customs and Border Protection. Over this past year, I have traveled around the country and the world, seeing first-hand how integral CBP is to our nation’s economic health and vitality, and the safety and security of the global supply chain.

In (fiscal year) 2014, CBP processed more than $2.4 trillion in trade, and approximately 26 million cargo containers, both of which are increases of about 4 percent over 2013. We must continue to transform and modernize our operations to meet these needs, and the predicted growth over the coming years.

Trade Transformation

CBP recognizes that the complexity of the trade process can present some significant challenges for global businesses. It involves 47 Federal agencies – plus CBP – and has largely relied on manual data entry and paper-based records. That is both time-consuming and costly – not only for the government, but for our trade stakeholders as well.

This is why CBP has focused on streamlining the process, automating core capabilities to reduce redundancies and increase predictability.

ACE and Single Window

Just one year ago, the President signed an Executive Order for streamlining the export/import process for America’s businesses. That Executive Order set December 31, 2016 as the deadline for completion of a government-wide, automated “Single Window,” approach for streamlining the movement of cargo in and out of the United States.

As part of this effort, CBP continues to enhance its import and export processing system and move from paper-based and legacy system requirements to faster, modernized, and more cost-effective electronic submissions. The Automated Commercial Environment, or ACE, is our system to do just that. ACE will become the primary system through which the international trade community submits import and export data required by all Federal agencies.

As part of the plan to complete ACE by 2016, CBP has established three mandatory use dates:

• May 1, 2015: Mandatory use of ACE for all electronic manifest filing.
• November 1, 2015: Mandatory use of ACE for all electronic cargo release and related entry summary and Partner Government Agency (PGA) filings.
• October 1, 2016: Mandatory use of ACE for all remaining electronic portions of the CBP cargo process.

We’ve made tremendous progress in the last 15-16 months, deploying more than 70 percent of core cargo release processing capabilities, and over 60 percent of core post-release processing.

E-Bond

And in January, CBP implemented electronic processing of single transaction and continuous bonds, or “eBond.”  eBond is the most recent modernization effort to come out of ACE and is having a considerable impact on the filing process, with filers transmitting a bond to CBP and receiving a positive response from ACE in 10 to 15 seconds. In the past, this would have taken 4 to 5 business days.

In the first month of the eBond, more than 11,000 bonds were created in ACE, and CBP is confident that eBond volumes will steadily increase as more brokers use ACE Cargo Release.

Exports

From the beginning of my tenure as Commissioner, I have heard frequently from our trade partners about the importance of modernizing our capabilities for exports. I am happy to report that more than 60 percent of core export processing capabilities have been deployed, including incorporation of all existing Automated Export System (AES) capabilities into ACE. And ACE now processes all export commodity filings.

CBP has also been working to support filing of export manifest, a process that had been conducted entirely through paper. And we have implemented capabilities to support the electronic filing/processing of export air, ocean and rail manifests.

November 1, 2015 means the mandatory filing of all data associated with the release of imported cargo from the government’s custody, including data related to PGA interactions, and the associated entry summaries must be submitted in ACE.

CBP has been working hard with our fellow PGAs to establish ACE functionality to support processing of their data requirements. Today we have five PGA pilots underway already, including pilots with the Environmental Protection Agency (EPA), the USDA Food Safety and Inspection Service (FSIS), and the National Marine Fisheries Service.

Centers of Excellence and Expertise (CEEs)

CBP’s Centers of Excellence and Expertise transform how we process trade, integrating management-by-account principles and allowing CBP trade personnel to specialize in a key industry, building advanced knowledge in the intricacies of particular products and processes. The CEEs are staffed “virtually,” with trade specialists who report to the Center but who physically remain in their current duty locations. The CEEs provide a host of benefits, including:

• reductions in transactional costs for the trade and CBP;
• increased consistency and predictability at the industry level; and
• enhanced ability to identify high-risk commercial importations.

The Centers are the product of continuing collaboration and cooperation between CBP and the trade community, including the Advisory Committee on Commercial Operations (COAC), and they have been subjected to careful concept testing and validation both within CBP and with the broader trade community.

In January, three of our 10 Centers transitioned beyond the test phase and went into “fully operational mode.” These three Centers are:

• Electronics (Los Angeles);
• Petroleum, Natural Gas & Minerals (Houston); and
• Pharmaceuticals, Health & Chemicals (New York City).

CBP’s Vision for the Future

At CBP, we have long recognized that collaboration and predictability are vital to streamlining and securing supply chains and making cross-border commerce more efficient.

Our Trusted Trader Program is a perfect example of this. We are unifying the current Customs-Trade Partnership Against Terrorism (C-TPAT) and Importer Self-Assessment (ISA) processes to integrate supply chain security and trade compliance. The Trusted Trader program will align with Authorized Economic Operator (AEO) programs implemented by other countries around the world to enhance security and facilitate global trade.

In designing the program, we coordinated with members of the trade community as well as other government agencies, including the Food and Drug Administration (FDA), the Consumer Product Safety Commission (CPSC), and the Transportation Security Administration (TSA). These other agencies can leverage this program for their own risk management strategies, and include additional criteria to streamline their own processes.

These partnerships are based on enhanced information sharing and efficient usage of resources, and they also help identify and address specific trade compliance, trade enforcement, and import safety gaps.

The FDA and the CPSC are participating in the “Phase I” program by acknowledging compliant partners in exchange for agency-specific benefits.

Leveraging our partnerships with our industry stakeholders is helping CBP improve our processes – the way we “do business” – and that helps our partners with their business.

Mutual Recognition Arrangements

This trade environment requires close partnerships with other nations to secure international supply chains. All countries need to work from the same set of standards while we try to harmonize our programs through Mutual Recognition Arrangements. These activities provide the platform for the exchange of trusted trader information between CBP and a foreign Customs Administration, and recognizes the mutual compatibility of each other’s supply chain security program.

By linking the various international industry partnership programs, they create a seamless, end-to-end security posture that helps facilitate and secure global cargo trade. To date, CBP has signed 10 Mutual Recognition Arrangements:

• New Zealand (June 2007)
• Canada (June 2008)
• Jordan (June 2008)
• Japan (June 2009)
• Korea (June 2010)
• European Union (May 2012)
• Taiwan (November 2012)
• Israel (June 2014)
• Mexico (October 2014)
• Singapore (December 2014)

For 2015, we have set several strategic goals:

• Concluding the joint-action-plan with China towards achieving an MRA;
• Engaging Switzerland in discussions leading to an MRA;
• Working with the Organization of American States (OAS) that began in 2014 and involves the AEO Programs from OAS member countries; and
• Continue working with Brazil and India’s AEO Programs.

Conclusion

CBP is committed to finding viable, workable solutions to cross-border challenges. Our economies depend heavily on the efficient movement of goods, a secure supply chain, and effective communications – and the stakes are only getting higher in an increasingly competitive and complex global environment.

We are extremely proud of what we’ve accomplished thus far, and by working with our partners in the trade community to modernize our operations and policies, we can help safeguard our economic and national security.

Thank you, and I look forward to a lively discussion.