CBP’s Expanded Influence on Exports

By: Megan Montgomery | Executive Vice President of the National Customs Brokers & Forwarders Association of America | 

U.S. Customs and Border Protection (CBP) has traditionally been an import focused agency. Established under the Department of Treasury in 1789, the U.S. Customs Service was a revenue collection agency for import duties. It was only after 9/11 and the creation and subsequent rehoming and renaming of the agency under the newly created Department of Homeland Security that CBP’s mission exponentially expanded to include physical security and enforcement at the border.

Licensed Customs Brokers, having been created by the U.S. Customs Service under Treasury, have likewise seen their role change and expand in the past 15 years. The change has taken time, effort and patience; and there has been a fair amount of growing pains on both the government and private industry side as the industry has moved away from pure duty and data collection to more of a security focused role.
With the continued development of the Automated Commercial Environment (ACE), and integration of the additional government agencies that have regulatory authority over international trade – 46 and counting – CBP is currently finding itself increasingly in the mix as a regulatory agency for exports as well as imports.

Currently, international forwarders live under a very different regulatory regime than traditional customs brokers. Ocean freight forwarders are licensed and regulated by the Federal Maritime Commission and adhere to regulations by a number of agencies – primarily the Bureau of Industry and Security (BIS), the Census Bureau, the State Department and the U.S. Treasury Department’s Office of Foreign Assets Control – and have always born the weight of a more security focused mantle.

For as long as there have been countries, there have been rules in place to keep whatever that country views as its competitive advantage ‘in.’ With the U.S., we work very hard to make sure that our military and technological advances don’t fall into the hands of our enemies, and freight forwarders play a vital role in that effort.  From different governing agencies, to different histories and traditional missions, exports and imports can be very different regulatory and political animals. While most folks in our industry do both imports and exports, CBP’s integration into exports will involve additional government reexamination of the current regulatory regime and also almost certainly an industry reanalysis of the current and potential future regulatory landscape for exporters.

Export regulations have traditionally had a different focus, different objectives and a different penalty regime than import regulations and enforcement. Even such details as the formatting of data entry and the timing of information requirements and submission rules have traditionally been divergent for imports and exports. So what’s a modern broker/forwarder to do? BIS and Census regulations for exporters, export compliance and forwarders may differ from CBP initiatives with respect to the export transaction, yet CBP has the responsibility to enforce both. As CBP continues to move to simplified entry and partner government agencies (PGAs) continue to manage risk and data collection in a different way than CBP, there is some potential for friction that the exporter and their service providers may feel as we all adjust to the “new normal.” Below are some questions that we are going to keep our eyes on as an organization, as ACE continues to come online and CBP expands its ever increasing role into export regulation:

  • With e-commerce dominating the policy discussion landscape at the moment, are we going to see CBP attempt to run a dual regulatory regime (as it appears to be doing currently), or will several of the export focused PGAs desire for consistent data drive us back to a more level playing field?
  • As ACE continues to provide PGAs, including export facing PGAs, with data they have never before had access to, will the agencies lean toward each other or away from each other in their overlapping export regulations?
  • Given the current political climate, with exports being given center stage over imports, will the inclusion of exports in CBP’s portfolio shift the focus from the safety and security of imports and securing/protecting our homeland?

As the Chinese proverb goes, “may we live in interesting times.” And the increasing footprint that CBP is creating for itself through legislative mandate, administration of ACE and the increasingly interdependency and complexities of intra-country international trade will continue to provide an opportunity for increased partnership, communication and interest for the private sector trade community for both the immediate and intermediate future of cross border trade.

Megan Montgomery is executive vice president of the National Customs Brokers & Forwarders Association of America, Inc. (NCBFAA). Headquartered in Washington, DC, the NCBFAA represents nearly 940 member freight forwarders, customs brokers, ocean transportation intermediaries (OTIs), NVOCCs and air cargo agents serving more than 250,000 U.S. importers and exporters.