CBP Trade Symposium 2009 - Wednesday Update

On Tuesday afternoon, CBP kicked off the 2009 Trade Symposium for attendees in Washington and the inaugural webcast. On Tuesday, attendees heard good news that CBP will use informed compliance mechanisms such as warning letters and increased inspections for ISF violations starting on January 26, 2010. Acting Commissioner Ahern stated CBP would be using the least punitive methods when the full compliance phase begins. On Wednesday, this was repeated by Richard DiNucci. He also stated that CBP would be looking for evidence of progress in the implementation of ISF during the flexible enforcement period as one of the primary mitigating factors. CBP doesn’t want to hold the cargo hostage, and they don’t necessarily want your money – they want the data. Supply the data and you get the cargo. Instead of using the catch phrase from the movie Jerry McGuire - "show me the money" the new phrase for CBP should be "show me the data."

The first glitch for those attending by webcast came before the session on International Property Rights Enforcement. The webcast disappeared into cyberspace, so we missed the IPR and ISA presentations. The good news is that the ISA presentation is available on the CBP web site.

Fortunately, those of us attending by webcast were able to rejoin the live sessions starting with the keynote address by Jane Holl Lute. Next came a lively and informative presentation on C-TPAT. Key takeaways from this session include the following:

· The C-TPAT member’s responsibilities do not end after validation.
· One of the biggest reasons violations occur is that procedures were in place and NOT followed.
· It’s not over when the cargo crosses the border. A large number of violations occur in transit from the border to the final destination.
· Technology is great, but you must know how to use it
· The most commonly breached criteria are conveyance, container, business partner and personnel security.
· The highest contributing factor for breaches is internal conspiracy.
· The most frequent location of compromise is in transit from the border.
· For those with procedures in place, those procedures were not followed in 83% of the incidents.
· If you have procedure and they aren’t followed, CBP will suspend you.
· The presentation contained a great list of best practices for carriers.

To wind up the day, we heard about ISF from a variety of perspectives including representatives from importers, shippers, carriers, trade associations and brokers. A lot of great information was presented by each speaker. One comment about ISF recordkeeping caught the Wizard’s attention. The comment was made that there was no mention of recordkeeping in the ISF rule, but the trade should consider keeping related documentation for five years. CBP addresses this same issue in the ISF FAQs, but uses a little stronger language to encourage maintenance of the records.

“The new regulations do not contain specific record keeping requirements other than retention of powers of attorney (see 19 CFR 149.5(c)). However, ISF parties should retain records necessary to demonstrate compliance with ISF filing requirements. In addition, the general 19 U.S.C. § 1508 recordkeeping requirements may be applicable to the ISF filer.”

One could also argue that 19 CFR 163.1 (a) and the Appendix to Part 163 imply that all records may not be specifically listed, but if they are related to an importation, they should be maintained. We’d like to hear your thoughts on maintaining records for 10+2 filings. The Wizard would maintain them. Better safe than sorry! Along with "show me the data" we can add "show me the records."

We’ll see you out in cyberspace for the last day of the symposium on Thursday. Kudos to CBP for the stellar organization for this year’s event and to the speakers for the insightful and informative presentations