Regulatory intelligence for US exporters

CBP Looking at Widespread Changes to Export Reviews, Exams and Penalties, Swanson Says

SAN ANTONIO -- CBP is combing through its export processes to streamline, automate and harmonize agency review, exams and penalties across the ports, according to Jim Swanson, director of CBP’s cargo and security controls division. Speaking at the National Customs Brokers & Forwarders Association of America's annual conference April 17, Swanson said CBP has “incrementally moved the ball” on exports in the past year, but is “on the verge” with “a few things we’re working on diligently.”

Similar to the import side with the Centers of Excellence and Expertise, CBP is also “moving forward to a more national model of review” for exports, leaning on the expertise of certain ports for specific types of exports, like the Port of Houston and the oil industry, Swanson said. Experts at those ports will be relied upon based on their abilities and the current flow of exports, he said. In contrast to the current port-based model, where review is based on local officer knowledge, that will allow CBP to leverage its relatively scant export resources, using automated systems for better review and risk segmentation.

CBP is also taking a look at the exam methodology itself, Swanson said. The current system of taking goods to the port of export where they are examined last-minute “doesn’t work,” Swanson said. Consolidated freight has to be unloaded, and trains have to be stopped and backed up on the rails. Using the earlier information it will get once advance export manifest filing is deployed, CBP will soon be able to stop shipments earlier in the process (see 1903070027).

That will give CBP flexibility on where it conducts export exams. Swanson already has a pilot in mind for performing exams at designated ports around the country, after which the exporter will be allowed to put the cargo back into the supply chain and take it out of the country, he said.

In what would be a “significant lift,” CBP is also looking at allowing exporters to request which designated port will conduct the exam, Swanson said. Exporters know best where in their supply chain is the best place to take the cargo for exam, he said. But ports would also have the ability to decline exporters’ requests. If that weren’t the case, for example, every exporter shipping by rail would want to have their cargo examined in Chicago, “and they don’t have a lot of officers,” he said.

Penalties are another strong area of interest for CBP, Swanson said. CBP is currently working with the Census Bureau, home of the Foreign Trade Regulations upon which many CBP export penalties are based, to identify current penalty issues and agree on a common “path forward” so penalties are more consistent.

CBP also has now taken the position that it is “not to issue parking ticket violations,” Swanson said. For simple errors like export dates or export ports, CBP wants to give filers a reasonable time to update their submissions to fix incorrect data, rather than penalize filers who come forward to correct an error, he said. Especially once CBP also gets that data for targeting via its upcoming export manifest system, those are not the filers CBP wants to go after, he said. “We want the people who never make a change and are consistently doing things wrong.”

Finally, CBP is trying to better define the parties responsible for a violation. The agency often finds itself issuing penalties to the party identified in the law or regulations, but those filers might not be the people that can actually prevent future violations, Swanson said.

CBP plans to tackle this ambitious agenda with help from the trade community. Just in the week prior to Swanson’s remarks, CBP set up a working group at the Commercial Customs Operations Advisory Committee focused on export modernization. That working group will be tasked with creating a longer term strategy for the agency on exports, on issues like involving partner government agencies and e-commerce, Swanson said.