CBP issues interim rules shifting key functions

Completing a process started several years ago, U.S. Customs and Border Protection (CBP) has published new interim rules formalizing the transfer and consolidation of key customs functions from the agency's 328 ports of entry to 10 centralized Centers of Excellence and Expertise (CEEs) organized by industry groupings. The Centers were established with the stated aim to increase uniformity of practices across ports of entry, facilitate the timely resolution of trade compliance issues nationwide, and further strengthen critical agency knowledge of key industry practices. The new interim rules are subject to comments through January 19, 2017.

Under the new interim rules, the CEEs will be responsible for performing certain trade functions and making determinations regarding importations of merchandise by their assigned importers, regardless of the ports of entry through which the importations occur. CBP's goal is to provide a more homogeneous treatment for similar products and importers and, as a result, facilitate trade. CBP promises that this will result in a reduction of Requests for Information and Notices of Action.

The CEEs will take over a number of basic functions previously handled at the port level, including:

  • decisions and processing related to entry summaries;
  • decisions and processing related to all types of protests;
  • suspension and extension of liquidations;
  • decisions and processing concerning free trade agreements and duty preference programs;
  • decisions concerning warehouse withdrawals wherein the goods are entered into the commerce of the United States;
  • all functions and decisions concerning country of origin marking issues;
  • functions concerning informal entries; and
  • classification and appraisement of merchandise, including valuation of merchandise.

While in some cases the port directors and the CEEs will also have joint authority, certain authorities and responsibilities will not be transferred to the CEEs and will be maintained by the port directors. These include decisions over control, movement, examination, and release of cargo; export; drawback; fines; penalties; and forfeitures.

The CEEs are organized by industry sectors, which are categorized by the Harmonized Tariff Schedule (HTS) numbers. CBP has designated the following cities for the CEEs: Agriculture & Prepared Products, Miami, Florida; Apparel, Footwear, & Textiles, San Francisco, California; Automotive & Aerospace, Detroit, Michigan; Base Metals, Chicago, Illinois; Consumer Products and Mass Merchandising, Atlanta, Georgia; Electronics, Long Beach, California; Industrial & Manufacturing Materials, Buffalo, New York; Machinery, Laredo, Texas; Petroleum, Natural Gas, & Minerals, Houston, Texas; Pharmaceuticals, Health, & Chemicals, New York City, New York.

Generally, each importer will be assigned to an industry category, that will be administered by a specific CEE based on the HTS tariff classification of the predominant goods it has imported. All importers may appeal the CEE's assignment at any time by submitting a written appeal. With the Automated Customs Environment (ACE) fully functional, import data submitted by importers and their brokers will be automatically routed to the CEEs.

It remains to be seen how this reorganization will function in practice. At a minimum, importers should now expect that CBP will be adopting more uniform national-level approach to enforcement activity to replace the sometimes conflicting multi-port approach followed by the agency since its creation in 1789.

Importers working with CEEs see fewer Requests for Informa­tion (CF28s) and Notices of Action (CF29s) than their counterparts that file at ports of entry, according to a report commis­sioned by CBP as part of its CEE rulemaking process. The report indicates that on average, participants see 78 percent fewer CF28s and 28 percent fewer CF29s after joining a CEE, resulting in less administrative time responding to the formal requests.

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