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CBP Commissioner Outlines “State of Trade” to U.S. Business Leaders

Posted March 26, 2015

Speaking on Tuesday to the U.S. Chamber of Commerce in Washington, Customs and Border Protection (CBP) Commissioner R. Gil Kerlikowske delivered his “State of Trade” to the influential business group, describing some achievements of his first year in office and providing them with a look ahead at the CBP’s modernization efforts which are aimed at better reflecting the realities of both commerce and the evolving global supply chain. 

Drawing on statistics to outline the magnitude of CBP’s operations, Kerlikowske noted that each day U.S. customs “processes more than one million people; screens more than 70,000 truck, rail, and sea cargo containers at 328 ports of entry; and processes $4.4 billion in exports and $6.8 billion in imports,” adding that last year, “CBP cleared $2.5 trillion in imports, and $1.6 trillion in exports, and processed approximately 26 million cargo containers – increases of about 4 percent over 2013.”

The customs chief also pointed out that nearly 50 federal agencies currently have a stake in the trade process, a fact which has resulted in a regulatory blizzard of paperwork making the system time-consuming and costly for both business and the government. “That is precisely why CBP has focused on streamlining and modernizing our processes,” Kerilkowske said. “We are automating core capabilities to reduce redundancies and increase predictability, preparing CBP to meet the growth in international trade predicted for the next few years.”

One of the first problems tackled by the new commissioner was solidifying the leadership team of the agency which, mainly owing to political gridlock in Washington, had been allowed to drift for years, with many key positions being temporarily filled by “acting” substitutes during the interim. Having achieved the objective of bringing greater consistency to the agency’s leadership team, Kerlikowske now feels more confident in the CBP’s ability to implement its Trade Transformation Strategy and deliver on the Obama administration’s vision of a government-wide, automated “Single Window” intended to streamline the entire U.S. government export/import process for American businesses.

Essential to realization of the “Single Window” initiative is deployment of the new Automated Commercial Environment (ACE) which represents a major transition from paper-based and legacy systems to faster, modernized, and more cost-effective electronic submissions.  Kerlikowske informed the Chamber of some of the new cargo processing capabilities that are part of the accelerated implementation of ACE as the agency closes in on key milestones on May 1st and November 1st of this year, as well as the projected deadlines for completion in 2016.

Other notable developments touched on by Kerlikowske included: expansion of the CBP’s Centers of Excellence and Expertise program which aims to consolidate processing for selected industries rather than scattering it across hundreds of ports of entry; efforts made to integrate supply chain security and trade compliance by unifying the current Customs-Trade Partnership Against Terrorism (C-TPAT) and Importer Self-Assessment (ISA) processes into a new “Trusted Trader” status that would be equivalent to the Authorized Economic Operator (AEO) programs utilized elsewhere in the world; and launch of the Air Cargo Advance Screening (ACAS) inter-agency security program designed to target and mitigate any air cargo identified as “high risk” prior to being loaded aboard U.S.-bound aircraft.

Speaking about the agency’s commitment to working collaboratively with various stakeholders, Kerilkowske used the Chamber address as an opportunity to announce the newest slate of appointments to the Commercial Operations Advisory Committee (COAC), a 20 member consultative body comprised of industry experts selected from representatives of the trade and transportation community. The customs chief also described the leadership role CBP plays in the new Border Interagency Executive Council, which brings together senior officials to examine and improve the import/export process across the U.S. government, in addition to efforts being made to enhance the working partnerships between CBP and other key federal entities involved in the trade process, such as the Food and Drug Administration and the Consumer Products Safety Commission.

Looking beyond the U.S. border, Kerilkowske stated that the CBP is “setting the example for global supply chain security standards and enforcement” and described how it is furthering this aim thorough its active leadership role in international bodies like the World Customs Organization where it is helping to advance global initiatives such as Mutual Recognition Arrangements which align supply chain security protocols between participating countries.  Kerilkowske also touched briefly on new facility upgrades and security agreements at the northern and southern borders such as the reciprocity accord between Mexico’s Nuevo Esquema de Empresas Certificadas (NEEC) trusted shipper initiative and the U.S. C-TPAT program, as well as the recently signed Preclearance agreement between Canada and the U.S. made in accordance with the 2011 Beyond the Border Action Plan.

Kerilkowske wrapped up his address by reaffirming the CBP’s dedication to modernizing its operations and becoming a more “agile organization” in the future, one better positioned to helping American businesses boost the economy by facilitating lawful trade and removing unnecessary supply chain barriers. Importantly though, just prior to his concluding remarks, the commissioner briefly mentioned two critical aspects of CBP operations “where we need additional focus” in preparation for the future – specifically, trade enforcement and regulatory review.

The latter topic Kerilkowske said is “a complex and time-consuming discussion, but an invaluable one.” Beyond that however, the commissioner did not elaborate other than to indicate that the agency is currently “examining ways to review our existing regulations and regulatory process.” With regards to trade enforcement, Kerilkowske noted that while “trade penalty assessments have increased by 140 percent from $385.4 million in Fiscal Year 2011 to $925.9 million in Fiscal Year 2014,” and “incredible strides” have been made in training and targeting techniques, the agency’s compliance mandate “could benefit from improved transparency and responsiveness to our private sector partners.”