COAC Issues Recs for Export Filing Modernization, Penalties, More in White Paper

The paper is also meant to help industry and the government further develop a “secure and flexible export” process. “The future export strategy must deliver effective enforcement and compliance, improved trade statistics, predictable facilitation of legitimate trade, a highly efficient clearance process, as well as rapid and streamlined communication” between government and exporters, the paper said.

The paper proposes a strategy that will “achieve” several goals, including eliminating the “current redundancy” among government agency requirements, assigning accountability for accurate data filing and ensuring the enforcement of the accuracy of those filings. The working group also said the paper aims to preserve and expand the use of post-departure filing, optimize the timing and methods of electronic commodity and transportation data submissions, and rationalize the export inspection regime in line with the progressive filing of data.

COAC hasn’t yet released the full paper -- which is over 100 pages -- because some officials in CBP are “still working through” it to make sure it “doesn't have any compliance errors,” Brenda Barnes of the COAC Export Modernization Work Group said during the meeting. Barnes said they aim to release the full version next week. “These recommendations are really meant to point to the paper in all of its entirety,” said Kate Weiner, another working group member. “There's so much work in it, it [should] be a million recommendations.”

Weiner said the paper pulled from the work of “a lot of brilliant export minds and talents” of several past COACs. “Exporters continue to face struggles all over the world in exporting our products, whether it's transportation-related issues or protectionist policies in an ever-increasing managed trade environment,” she said. “Modernizing and increasingly focusing on trade facilitation where we can is critical to growing our economy and protecting jobs that depend on export.”

Among the paper’s recommendations is a “more targeted penalty approach focusing on the most egregious violations” and less of a focus on “parking ticket” violations (see 1912040043). Although CBP has “primarily” limited its penalties to late Electronic Export Information filings or inaccurate data submissions, those penalties have at times “inhibited legitimate trade,” the paper said. Industry has also seen an increase in penalties for Automated Export System filers for incorrect data reported based on information obtained from third parties -- such as carriers -- which has led to a “financial and process burden.”

CBP should issue guidance on “what constitutes a clerical error in export data,” the paper said, and impose holds to give filers the time to correct the errors rather than issuing penalties. “A filer voluntarily updating previously submitted information should not be subject to any penalty,” the paper said.

It also said CBP officials should not “be able to issue penalties without proper training on how to do so and which regulations to apply.” In addition, the U.S. Principal Party in Interest “should not be penalized for data inaccuracies resulting from split shipments,” the paper said, adding that the government should issue guidance on “voluntary prior disclosure of export violations.” “Penalties should be appropriate to the gravity of the violation,” the paper said, “and mitigated based on the history of compliance or membership in trusted trader programs.”

The Electronic Export Manifest project must also “fully implement” the progressive filing model, which “clearly distinguishes between shipment information and transportation information” and “bases risk assessment on shipment data to enable early-as-possible targeting.” The paper also includes a range of other recommendations, including deadlines for data submissions, the best time and places for shipment interception and inspections, and updates to the Foreign Trade Regulations.

The paper also stresses the importance of modernizing the post-departure filing process and said CBP should lift the moratorium on post departure filing for new applicants. Under its recommendations, the USPPI would apply to be a post-departure filer and would be responsible for several data elements and submissions, including the countries of ultimate destinations, ultimate consignees, method of transportation used for each consignee, the export license number and more.

The paper also said the Census Bureau and CBP would authorize each USPPI “allowance to ship under post-departure status” for all consignees, commodities and countries on the applications. Once the exporter has been given post-departure status, they can request to add consignees, commodities and countries. The paper also includes more information on authorizing the USPPI’s application and what data would “not be submitted prior to shipment in a Post-Departure environment.”

Although Weiner said the paper is comprehensive, it doesn’t tackle issues surrounding truck manifest and modernization. “Much of the recommendations and the path forward is contingent upon the electronic manifest, and truck is a bit behind the other modes,” she said. “We recommended that the next COAC continue to pursue applying the recommendations to truck as the e-manifest work continues.”

Thomas Overacker, CBP’s executive director of cargo and conveyance security, said the agency “looks forward” to implementing the recommendations. “This work goes back to the 12th COAC, and here we are at the conclusion of the 15th,” he said. “That’s a reflection of just how complex and how detailed this white paper is.”