NCBFAA Customs Committee

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080123 v.1.0NOTE: The Chairman wishes to thank John Peterson, Bill Skinner and Gary Ryan forcontributing the meeting notes on which this report is based.08:30 – Call to orderOpening Remarks and Introductions (K. Bargteil)Welcoming remarks and introductions were made. Note taking responsibilities wereaccepted. A sign-in sheet was circulated. Ken Bargteil advised the Committee that one of thematters of interest to the European Anti-competitiveness Commission’s investigation ofcertain global logistics companies involves discussions during a trade association meeting.The Chairman asked Customs Counsel to guide member comments away from anyanticompetitive communication. Alan Klestadt indicated that talk of pricing, services,markets, and profit strategies cross the line. The Customs Committee should focus on issuesof policy, implementation and process, and technical matters. Market forces must be left toresolve business concerns. Especially with new issues like the Importer Security Filing.ISF NPRM (A. Klestadt)The much anticipated “10+2” ISF NPRM (cit. 73 FR 90) clearly envisions a pivotal rolefor customs brokers in achieving CBP’s goal of enhancing automated targeting whileminimizing any disruption of the supply chain. It also raises many questions and concerns.Alan Klestadt reported that more than 150 members participated in the NCBFAA 10+2webinar on Wednesday, January 16 th , which provided a process overview and practicalunderstanding based on a reading of the NPRM and what had been learned through NCBFAAengagement with CBP on this matter. The webinar did not venture into judgments on theproposed rule itself. It was reported that a good deal of deliberation and discussion will benecessary in order for the NCBFAA “10 + 2” Work Group to resolve basic policy beforeAssociation comments on the proposed rule can be drafted.Alan Klestadt advised the Committee that comments received from webinar participantswere fairly specific, and focused on how the Importer Security Filing (ISF) will work;specifically, how will it effect selectivity; who will have visibility; will there be accessthrough the ACE secure account portal; will the standard power of attorney forms providenecessary authority for preparation and filing the ISF? The webinar will be posted online atwww.ncbfaa.org.Ken Bargteil asked all meeting attendees to read the NPRM very carefully and submitcomments to Alan Klestadt with copies to John Peterson and the Chairman prior to February2 nd for compilation and consideration for inclusion in the NCBFAA comments. Mary JoMuoio advised that the NCBFAA Forwarding and NVOCC Committees will also compilemember comments in support of the “10 + 2” Work Group. NCBFAA joined AAEI in itsrequest for an extension of time for comment. While we have a problem evaluating theproposal without record layouts, and can’t be sure what role, if any, CBP envisions for thetrade in working through those critical elements, restrictions on CBP public communicationsduring the comment period are so burdensome that we can’t get any insight into this issue.Ken Bargteil reported that during a teleconference held by CBP with the TSN TradeAmbassadors and Leadership Council he addressed our concerns regarding both the lack ofrecord layouts for filing the ISF and reporting the data elements, as well as the inadequacy inthis case of the normal 60-day lead time for the trade to effect programming changesPage 2 of 2
080123 v.1.0following CBP announcement of a systems change. With respect to the former issue, CBPsaid that they would welcome comments that extended beyond the four corners of the NPRM,including comments on such things as the record layouts. With respect to the latter, acommitment was extracted from Assistant Commissioner for the Office of InternationalAffairs and Trade Relations, Michael Mullen that the trade would have sufficient time toprogram for “10 + 2”, and not be expected to complete that task in 60 days. AssistantCommissioner Mullen indicated that the lead time would be at least 120 days.Alan Klestadt recommended that the Customs Committee focus on the broad policy issuesfor the time remaining on the agenda for this issue. The Customs Committee should form aconsensus on which basis drafting of comments on the NPRM can proceed. Alan Klestadtemphasized his belief that this is a watershed moment for NCBFAA and its members.Darrell Sekin said that NCBFAA is uniquely equipped to provide the “how to” answersfor “10 + 2”, and that if we can find a way to demonstrate that capability our members will bethe filers. The opportunity to be the “go to” guys for importers on this requirement is withinour grasp. Ken Bargteil observed that there was nothing in NPRM on “No Load” messages.Since “No Load” as a consequence of failure to make a complete and timely filing in properform had been a constant feature of discussions with the trade preparatory to the NPRM, theabsence of any mention of it is an interesting and puzzling development.Cary Weinberg inquired whether the Committee hadn’t concluded that the preparation andfiling of a “10 + 2” record was customs business. Alan Klestadt replied that makingjudgments and filings involving classification, valuation and admissibility is customsbusiness. Ken Bargteil said that he had been on both sides of this issue as the analysisproceeded and different arguments emerged. Alan Klestadt has taken both sides as well. Theconstant has been that securing the supply chain is the goal. Dan Meylor said that he thoughtthat a “No Load” was a more appropriate consequence for failure to comply with the “10 + 2”rule. He suggested that if there was no filing 24-hours prior to loading the shipment shouldnot load. If evidence for a false filing came to light after arrival, then a monetary penaltywould make sense. If security is the issue, then CBP should do their job and issue “No Load”messages when appropriate.Ken Bargteil speculated that CBP could not build a system to provide for the visibility,query capability, and logistical consequences that the prospect of “No Load” messages wouldnecessitate. It is also possible that contingencies for those features were determined to requireunacceptable security compromises. It may have been decided that the only practical meansto enforce this rule was liquidated damages. Art Litman said that the process should besimple, but that an acceptance message with identifier code was essential. Mary Jo Muoioadded that visibility is critical. Cary Weinberg questioned whether there were legalimplications with respect to various usages of the terms “file”, “transmit” and “submit” in theproposed rule. Gary Ryan said that 80% of importers have ten or fewer shipments per year,and wondered how foreign filers would be audited and held accountable for noncompliancewith the proposed powers of attorney provision. He suggested that CBP would be unable toenforce penalties against foreign filers.Alan Klestadt asked why the identifier code was not included in the NPRM, and notedthat CBP appears to have abdicated responsibility for working through the practicalconsideration for this process and have left a number of the elements for industry to workthrough. Art Litman said that we need to be positive in our comments and to make this work.Page 3 of 3
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NCBFAA Customs Committee

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