Industry News

Customs Reauthorization and Overhaul Bill Introduced in the Senate

August 7, 2009


Yesterday, Senate Finance Chairman Max Baucus (D-MT) and Ranking Minority Member Charles Grassley (R-IO) introduced the Custom’s Facilitation and Trade Enforcement Reauthorization Act of 2009 (S.1631). The legislation, which has been under development for over a year, is intended to strengthen the trade facilitation and enforcement efforts of U.S. Customs and Border Protection (CBP) and U.S. Immigration and Customs Enforcement (ICE).

The last major legislative overhaul and reauthorization of CBP was passed in 2006 as the Security and Accountability For Every Port Act (SAFE Port Act, Public Law 109-295). Prior to the SAFE Port Act, the Finance Committee last authorized customs and trade functions in the Trade Act of 2002. Both pieces of legislation focused intensely on the security operations of CBP and ICE.

Unlike the last two customs reauthorization bills, the current legislation is aimed at strengthening customs commercial operations in trade facilitation and enforcement. Trade facilitation highlights of the bill include:

  • Expanded C-TPAT Benefits: Requires the Department of Homeland Security (DHS) secretary to work with the private sector to develop additional trade benefits for Tier 1, Tier 2, and Tier 3 participants in the U.S. Customs-Trade Partnership Against Terrorism (C-TPAT) program.
  • New Trade Facilitation Partnership Program: Requires the CBP commissioner to establish a voluntary customs Facilitation Program that provides benefits to qualifying persons involved in the importation of merchandise to the U.S.
  • Customs Automation: Provides $300,000,000 for each of the next three fiscal years to complete the development of the Automated Commercial Environment (ACE) and requires the Commissioner to fully implement the system by September 30, 2012.
  • Drawback Reform: Streamlines the duty drawback process, requiring that drawback claims be filed electronically and impose objective drawback eligibility requirements.
  • 24-Hour Commercial Land Border Ports of Entry: Requires the President to establish a two-year pilot program to designate certain land border crossings as commercial ports of entry that may accept merchandise entries 24 hours a day.
  • Enhanced Coordination and Oversight:   Requires DHS to consult with Congress before proposing or finalizing any new trade-related policies or regulations. It would also establish a new interagency Customs Review Board to ensure that proposed changes to CBP’s rules or regulations are consistent with U.S. international trade obligations.
  • Reform Public-Private Customs Advisory System: Requires the Secretary of the Treasury and DHS to establish a new Commercial Customs Operations Advisory Committee (CCOAC) comprised of 20 private sector representatives which must report to Congress on the commercial operations of CBP and ICE.

Trade enforcement highlights include:

  • Joint Strategic Plan: Requires CBP and ICE to prepare a biennial Joint Strategic Plan outlining the agencies’ plans to improve customs-related trade enforcement. It also would require CBP to develop risk assessment methodologies to better target cargo that may violate U.S. customs and trade laws while facilitating legitimate trade and to use available import data collected by the agency in its commercial targeting.
  • Prohibition on Importation of Goods Made With Forced Labor: Expands existing laws in order to prohibit the importation of goods made with forced, convict or indentured labor.
  • Importer of Record Program: Requires the commissioner to establish an importer of record program within 180 of enactment to assign importer numbers, ensure that duplicate numbers are not assigned, and maintain a database of importer of record numbers.
  • Import Safety Working Group: Creates an Import Safety Working Gropu to consult on the development of a Join Import Rapid Response Plan, evaluate federal resources and plans to ensure the safety of U.S. imports, identify best practices to assist U.S. importers in ensuring import health and safety, and to identify steps to improve domestic and foreign accountability.
  • Strengthened IPR Enforcement: Establishes the National Intellectual Property Rights Coordination Center within ICE to coordinate federal efforts to prevent the importation or exportation of goods that violate intellectual property rights.  It also would strengthen Customs targeting efforts to detect goods that violate IPR and require CBP to dedicate port personnel with primary responsibility for enforcing IPR. The bill would streamline CBP’s copyright recordation process and provides CBP with the explicit authority to seize unlawful circumvention devices.
  • Statutorily Establish CBP and ICE Within the DHS: The bill would establish and fully authorize CBP and ICE, which currently exist only as a function of discretionary authority under the Homeland Security Act. The bill would also require each agency to prioritize its customs facilitation and trade enforcement missions.

Both Senators have stated that they would like to see the legislation passed this year, although it will not likely occur until the Senate finalizes legislation on health care. To view the complete bill, as introduced, click here.