A.N. Deringer Director of Customs Affairs and Compliance Amy Magnus took over as president of the National Customs Brokers and Forwarders Association of America (NCBFAA) on May 3, after she was elected to the position during the association’s annual conference this spring. Magnus has served in her position at A.N. Deringer since June 2003. She currently serves both as co-chair of U.S. Customs and Border Protection’s (CBP) Trade Support Network Entry Committee and on the CBP Commercial Customs Operations Advisory Committee (COAC). Before becoming a customs broker, Magnus worked 18 years for the U.S. Customs Service, a position in which she helped draft policies and procedures related to NAFTA, compliance measurement, enforcement and other trade issues. She has served as both a fines, penalties and forfeiture officer and as an inspector and import specialist for Customs.
What sort of focus will you bring to help drive the remaining areas of ACE development as president of NCBFAA?
We want to continue having that collaborative and productive relationship with ACE-involved agencies so that we can make sure that we are viewed professionally by these agencies. That’s probably the primary agenda that we will have in the coming years, but we will also remain very attentive to things that we have concerns about and we will make sure that our voice is heard, particularly around areas like the continued development of ACE [CBP’s Automated Commercial Environment].
We do have some remaining concerns about ACE development. We have addressed those with CBP. We have what we call a punch list. That punch list has items that we think CBP may have missed on the first round and need additional or further development or simply need development. So we’re going to be focusing on that in the near future to ensure that we get what we need out of that system. Because getting what we need out of that system actually facilitates trade in many ways. So that’s probably going to be one of our top agenda items in the very near future.
We know that CBP is working on prioritizing additional development in ACE right now because they have additional funding, which is another reason why we want them to be attentive to our punch list and make sure that some of the things we feel are really important are getting done.
And I think CBP will be attentive. I think we do have a good relationship with CBP. They have seen our punch list, they have asked us questions. They have asked us to prioritize our needs and we have done so. So, we’re not working in shadows in the corner. We’re really transparent with CBP and the other government agencies.
But we’re not all about ACE. We have other things that we are concerned about as well. We work with the [non-vessel-operating common operators]. I’d like to mention that for many years we have asked that there not be a requirement [by the U.S. Federal Maritime Commission] to publish tariffs for the ocean world, and it looks like that might have been a successful endeavor on our part. ... We don’t know that yet, but we certainly are going to continue that agenda [with the FMC]. It has been an agenda for our association for a number of years.
What are some of the issues spurred by the raising of the de minimis level for imports from $200 to $800 through enactment of the Trade Facilitation and Trade Enforcement Act?
The raising of the de minimis to $800 has caused, I think, a great deal of unintended consequences. I, for one, am not a champion of having a de minimis level that is one of the highest in the world. Azerbaijan and Georgia are the two countries in the world that have a de minimis that’s anywhere near what the United States has. Australia has one that’s almost the same and they have realized that it may not have been a good idea for them either.
So what’s happened is the United States has opened up the gates to allow all kinds of small packages valued under $800.
But we didn’t plan or prepare for this adequately. The [CBP] officers at the ports are, I think, overwhelmed with trying to deal with this, and I’m going to quote, because it’s not my quote, the “tsunami” of small packages entering the United States. There is inadequate targeting for enforcement issues, I think, and I know there’s inadequate targeting for commercial concerns. Things like intellectual property rights, safety, consumer product safety-type things, you know, “Does the toy have lead paint on it? Are the items in the toy too small? Are the auto parts or the airplane parts the legitimate parts? Or are they perhaps counterfeit parts that don’t perform as well?”
There are myriad concerns well beyond drug smuggling that I think this $800 de minimis opened up. Because you can imagine a truckload full of small packages — a thousand tiny packages — in one truck arriving at a border somewhere. Where is the [CBP] officer going to come from to go and inspect the cargo on that truck?
Normally they’re used to inspecting straight loads — a load of lumber, a load of wearing apparel, a load of shoes. They can look at that, they can understand what’s there. A thousand little packages in a truck — to really do an adequate inspection with the tools that are available in some of the ports that aren’t equipped to do this kind of examination — I don’t know how the [CBP] officers can keep up. And when they’re deployed to examine these small packages, what else isn’t getting done?
The other part is everybody is ordering online and that’s been increasing exponentially over time.
So the combination of those two came almost like magic. But here’s the other problem and the one that really is, I think, the most bothersome for me. There are really no adequate trade statistics being taken on this cargo that’s coming into the United States. We cannot, for example, ship equal value shipments to China as seamlessly and effortlessly as the Chinese are able to ship goods into the United States right now. In short, who’s collecting trade statistics as these small packages continue to pour into our country?
We do agree that advance cargo data will help. I don’t think anybody in our association will object to the benefit of advance data.
Right now I think the data that comes in advance is inadequate. It’s manifest data and I think we all need to take a very hard look at the kind of data that would really help in the enforcement effort. Not just for security, which I think if you talk to CBP they’ll say the manifest data, they believe, is adequate for security. That’s questionable.
But in my mind, the manifest data is absolutely not adequate for security and commercial compliance.
What problems do you currently see with the existing level of cargo manifest data provided to CBP?
There is not enough information. You know what you don’t have on a manifest? You don’t have the importer. You don’t have the buyer. You only have the deliver-to party. But we can’t make an assumption that where the cargo is being delivered is the party who actually caused the transaction.
So I think knowing who the true buyer is and the true seller, in addition to knowing where the goods are going and where the goods came from, is a lot more powerful than just knowing who the shipper is and where they’re being delivered.
We certainly have been advocating for additional data to allow the [CBP] officers to do their screening and targeting in a more efficient way.
I know there was some disagreement, I think two or three meetings ago, of the Commercial Customs Operations Advisory Committee about the issue of what data to require for Section 321, or de minimis entries, such as whether to require 10-digit HTS numbers. Where is that right now? Is it getting any traction in COAC?
We did put forth the public recommendations and they were not unanimously agreed to when they were brought forward. I do believe that CBP is looking very hard at providing a means for [customs] brokers to submit additional information for these Section 321 shipments. And I hope that Customs will look at shipments that have the additional data that allow them to do a better job of screening and targeting, and that will truly facilitate the release of those goods and maybe take a second look at those that would like to continue to bring the goods in with less information.
What are you hearing from the trade as far as suggestions for how CBP should seek information for Customs Form (CF) 28s and forced labor cases?
We are seeing increased CF 28s and the questions are around forced labor. We did get the informed compliance publication back, I think it was November of 2017, the reasonable care guidelines. So we rely on those informed compliance publications. When that was published, the additional information under the reasonable care guidelines was forced labor. So in that reasonable care publication, it said that we, the importer, had a responsibility for ensuring that the goods were not subject to, or created, or manufactured using forced labor.
After issuing the informed compliance piece, CBP did start issuing CF 28s asking clients what means or processes they have in place to ensure that there is no forced labor in the goods that they’re bringing into the United States.
We’ve seen an increase in those CF 28s, and so we know that Customs is enforcing and is interested in this. And it seems to be, or at least the ones that we’ve seen, a lot of them are coming from areas in China that are very close to the North Korean border, but not just that. We’ve seen a lot of those, but we’ve seen them from other areas of the world too.
We’ve tried to inform our members of ways that they can deal with their clients or have dialogue with their clients around protections that they need to put in place.
In your estimation, how is CBP doing with its law enforcement efforts? Drug smuggling, money laundering, human trafficking? Are you following those at all?
We watch it. And we watch all the shows and all the programs and all the discussions around the problem with a drug like Fentanyl and how dangerous it is. And the problem is that it comes in a little tiny package and to detect the smuggling of something like that has been a challenge since the beginning of time.
And our interdiction efforts around controlling the drugs coming in to the United States over many, many years have really not been effective. With all due respect, I think our enforcement officers do the best that they can, but the smugglers are forever evolving and creating new lanes, new ways, new drugs, new methods, and it’s just a problem that I don’t think we can expect our law enforcement officers to be able to control. It’s a bigger problem than interdiction, and it bothers us because it interferes with our supply chains. The need to inspect, the need to interdict, is certainly there.
But we need to have a much larger dialogue around this problem, and it is not going to be solved through interdiction: plain and simple.
How do you think CBP’s in-bond regulations, issued in a November final rule, might continue to evolve?
Well, in-bond is still something that we’re all talking about. The regulations were published after many years and I think everybody acknowledged that when the regs were published, because there was such a long time period between when they were originally drafted and then finally published, that already the industry has changed. So bringing those regulations into processes, the new regs, has been something that’s required a lot of discussion and, perhaps, we may even see some changes, if not in the regs, certainly in procedures, because the in-bond now should be entirely paperless [in the near future].
But we no longer will have those paper 7512s that we used to have in the old days, that were stamped or perforated, that proved the goods did arrive at destination or were in fact meant to be exported. So there’s still a lot of conversation going on with Customs around how they are going to implement the new in-bond requirements, in the totally paperless world, and yet make sure that we have control over our cargo, that we know when it arrives, that we know when it’s exported. And that we have a good trail — if not paper — then a better electronic trail, to make sure that all the goods that are coming in and out, on in-bond moves are controlled.