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WIIT Communiqué SEPTEMBER/OCTOBER | Customs Issue
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Customs: A Hot Topic Once Again
We decided to devote this Communiqué issue to customs matters - given recent legislative, regulatory and enforcement activity in the area. We also wanted to highlight a recent World Customs Organization (WCO) gathering of over 100 women, including WCO Director of Compliance and Facilitation Ana Hinojosa and European Union Commissioner for Trade Cecilia Malmström. WCO Secretary General Kunio Mikuriya welcomed the group and emphasized the interest of the WCO to promote engagement with organizations involved in global trade and also to promote gender equality in all aspects of Customs and Trade. The group has been organizing for about a year exploring the feasibility of becoming a chapter of the Organization of Women in International Trade (OWIT), of which WIIT is the DC chapter. A number of our own WIIT members, including Stefanie Holland, Adeline Hinderer, Leslie Griffin, and myself, have offered information on the merits of becoming part of OWIT. I want our friends to know that we are always available to answer questions about being an OWIT chapter. Remember Brussels, you have friends in DC.

On February 24, 2016, President Obama signed into law the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). TFTEA is the first major customs law enacted since the Customs Modernization Act, which was enacted in 1993 as part of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182 (1993).

The new law contains various enforcement provisions, including those to combat evasion of antidumping and countervailing duty (AD/CVD) orders. Customs and Border Protection (CBP) promulgated interim final regulations on August 22, 2016 setting forth the procedures for investigating allegations of evasion.

Other enforcement provisions include measures to help CBP interdict goods violating intellectual property rights. The law also eliminates a “consumptive demand” exemption to the prohibition on importing goods made with forced labor (19 U.S.C. 1307) and CBP has in fact held up products allegedly produced with the use of convict labor.

On May 2, 2016, CBP announced creation of a Trade Enforcement Task Force to strengthen “CBP’s ability to detect high risk-activity, target illicit trade networks, and work with industry to disrupt evasion of U.S. trade laws,” according to CBP Commissioner R. Gil Kerlikowske. The Task Force will focus on enforcement of AD/CVDs, combatting imports of counterfeit goods and protecting intellectual property rights holders, and eliminating obstacles to preventing imports made by forced or child labor.

CBP states that it will use “all of its authorities to combat trade fraud by DETECTING high-risk activity, DETERRING non-compliance, and DISRUPTING fraudulent behavior.” CBP further states that it “will use all methods at its disposal – including increased bonding, enhanced targeting and inspection of high-risk imports, and swift and thorough review of allegations to ensure a fair and competitive trade environment.” https://www.cbp.gov/trade

TFTEA is the first customs reauthorization since the creation of CBP under the Department of Homeland Security recognizing CBP’s critical missions, including that of enabling lawful trade and travel. The law formally recognizes CBP’s Center of Excellence and Expertise (CEEs) as a major effort to modernize and streamline its operations and authorizes customs modernization efforts such as the Automated Commercial Environment (ACE) and the International Trade Data System (ITDS), also known as the “single widow.” It raises the de minimis amount (for goods to be entered by simplified procedures on a manifest) to $800 and substantially revamps the drawback statute.

We are very pleased with the many excellent contributions which we have received for this edition of the Communiqué. Cindy Thomas and Megan Montgomery of The National Customs Brokers & Fowarders Association of America (NCBFAA) discuss the background of the Trade Facilitation and Trade Enforcement Act (TFTEA) and some of the challenges that lie ahead. Susan Zimmerman of United Parcel Service explains why customs procedures are so important to the smooth functioning of the supply chain. Allen Gina of CT Strategies discusses how the theme of public/private partnerships is embodied in TFTEA provisions. Michael Kerlen of Comstock & Theakston, Inc summarizes the changes to U.S. drawback law contained in TFTEA and what that means to drawback users. Timothy Trainer of the Global Intellectual Property Strategy Center gives us an overview of CBP’s information disclosure rules related to intellectual property. The issue concludes with a report on the September 8, 2016 WCO meeting (as referenced above) by Ana Hinojosa of WCO.
About the Author:  Evelyn Suarez | International Trade Lawyer, The Suarez Firm - Ms. Suarez is an experienced customs and international trade lawyer specializing in import and export compliance and regulation, as well as anti-corruption compliance and trade policy. The Firm handles administrative, regulatory, legislative, and litigation matters for global companies involved in importing, exporting, transportation, logistics and customs brokerage. She assists clients take the risk out of international business.

Ms. Suarez is President of WIIT for the 2016-2017 term and serves on the Board of the Virginia Maritime Association and the Advisory Council to Old Dominion University’s Maritime, Port and Logistics Management Institute. She is listed in The Best Lawyers in America for International Trade and Finance Law is a “Super Lawyer” in International Trade.
The Enforcement Era Begins
The Customs bill was a long time coming. Signed into law in February amid much acclaim, the Trade Facilitation and Trade Enforcement Act (TFTEA) actually began its journey over a decade earlier. In those early days, trade facilitation was the driving force behind the measure. But the following years were not easy for trade and time slowly took its toll. When passage of the bill finally occurred, trade enforcement had taken center stage. The great irony, the facilitation-driven Customs bill became the enforcement counterpoint to round up votes for Trade Promotion Authority (TPA) – the hammer to balance the allure of free trade.

 
That's not to say it is devoid of facilitation. The duty drawback program, for example, is rescued from the dark ages, simplified and streamlined so it can thrive in a modern, electronic environment. Yet, many other facilitation features simply caught up with time, codifying initiatives that were already in motion at CBP, such as ACE and the International Trade Data System (ITDS), or trade partnership programs.

During the legislation's development, CBP never was too enthusiastic about forming the Customs bill. At one point, the Administration went so far as to oppose the bill. Now, however, CBP seems to have been energized and is determined to put teeth into its new enforcement tools. Pressure is on CBP to draft proposed regulations quickly. Pressure is also on the private sector to make certain these regulations are transparent, realistic and reflect congressional intent. Just some of the challenges ahead include:
 
Minimum Standards for Brokers and Importers Regarding Identity: TFTEA requires CBP to prescribe regulations establishing minimum standards for customs brokers and importers relating to the identity of the importer. The regulation is expected to require an importer to submit and a broker to collect specified information to verify the identity of the importer/client. However, it is not the responsibility of the broker to "vet" the importer; that is CBP's role through access to the documents provided. We will be looking for the regulation to reflect this important distinction.
 
DeMinimis Increase: TFTEA increases the "de minimis" value exception from duties and taxes under Section 321 of the Tariff Act from $200 to $800. As the value of goods potentially eligible for this exception quadruples and the pool of imports potentially entered under this exemption similarly increases, CBP faces an enforcement responsibility that did not previously exist. The explosion of e-commerce also makes Section 321 an especially important issue for CBP.
 
Section 321 is an exemption from duty and tax for "qualified merchandise." It is not an exemption from entry or import requirements. Therein lies the dilemma for CBP. Many health and safety requirements from other government agencies continue to apply, as do other import laws, such as intellectual property protection and antidumping/countervailing duties. In other words, low value does not necessarily equate to low risk. Therefore, CBP is looking at what mechanism will enable information to flow to the other government agencies and to clear its own targeting hurdles for trade law compliance. Further, since CBP is actively monitoring these low-value shipments to detect potential patterns of evasion, some in the trade see the need for greater clarity from the agency on how it intends to enforce the one person per day limit, so that everyone knows “the rules of the road”. Important to the industry is that there is an equal competitive footing for processing these low value shipments.
 
Prohibition on Imported Goods Produced By Forced Labor: This prohibition has been around since the Tariff Act of 1930, but has rarely been used due to its "consumptive demand" exception, which excused forced or child labor imports if the product was not produced domestically in high enough quantities to meet U.S. demand. Now, with TFTEA, the "consumptive demand" exception has been repealed. Just weeks after TFTEA was signed into law, CBP signaled a new resolve to enforce the prohibition. The agency issued two "withhold release" orders, blocking goods from a Chinese company suspected of using forced labor.
 
No one argues against restricting imports produced using forced or child labor. Of course, the inhumane practice of forced labor must stop. Yet, depending on how CBP writes its regulations, compliance with this new requirement may be especially challenging given the complexity of global supply chains and the widespread use of forced labor around the world. The Bureau of International Labor Affairs estimates 21 million people are subjected to forced or child labor in the production of such products as rubber in Burma or electronics made in Malaysia, for example.
 
How far back and how deep into the supply chain will CBP look? Must each component, each raw material of a finished product be traced back to its source? How will that be done? Can it be done? These are just some of the questions the trade is asking. Stakeholders are seeking clear and transparent rules with risk-based targeting and extensive outreach to the trade as CBP implements the prohibition.
 
Enforce and Protect Act: Title IV of TFTEA, known as the Enforce and Protect Act (EAPA), creates a new framework for CBP to investigate allegations of antidumping and countervailing duty evasion. CBP, through its newly created Trade Remedy Law Enforcement Division, must initiate an investigation after receiving a properly filed allegation from an interested party or a request from a federal agency. Strict time requirements govern the entire process. CBP just issued an interim final rule to implement the procedure in late August.
 
NCBFAA has long advocated a prospective system to assess antidumping and countervailing duties. This would better promote fair trade by informing the marketplace of fairly traded prices at the time purchasing decisions are made. A prospective system would also enable CBP to more effectively collect duties owed and be less resource intensive for both importers and the government. Clearly, TFTEA did not follow that path. Now, we will soon see how CBP wields this new tool.
* * * * *
Many unknowns remain. Yet, the one thing we do know: we are entering a new enforcement era that will require fresh strategies and new approaches to manage global supply chains.
About the (Co)Author: Cindy Thomas, Esq. - Legislative Representative | National Customs Brokers & Forwarders Association of America, Inc. (NCBFAA) - Cindy Thomas is Senior Counsel at Kent & O'Connor, where she has developed expertise in the areas of trade, tax and intellectual property. A graduate of George Washington University and Georgetown Law School, Cindy joined Kent & O'Connor in 1986, following four years on Capitol Hill working as a legislative and political strategist for a Member of Congress.
About the (Co)Author: Megan Montgomery - Executive VP | National Customs Brokers & Forwarders Association of America, Inc. (NCBFAA) - Megan Montgomery is the Executive Vice President for the National Customs Brokers and Forwarders Association of America. In her role she manages the NCBFAA office and budget, acts as Board and leadership liaison and manages the PAC and public policy issues for the association. Prior to her current role, she was the Principal Consultant for Washington, DC-based MWM Consultants, and before that served as the Director of Government Affairs at the American Association of Exporters and Importers (AAEI) in Washington, DC.
Customs: Not Just for Supply Chain Wonks

Whether or not you are aware, customs policy is everywhere—it is the silent undercurrent for all things International Commerce. Global trade in goods accounts for nearly US$20 trillion every year.  That’s a lot of stuff.
 
When you think about my employer, UPS, it may just call to mind the friendly UPS drivers in their brown trucks delivering things across the United States, but a majority of our business is reliant on border-crossing, as it is for any company that sends goods outside the U.S.

 
The global network of shipments—from small one-off packages to regular freight loads moving along the supply chain—would, in a perfect world, be a well-oiled machine. UPS understands the critical nature of this smooth movement first-hand: our network moves 2% of global GDP and 6% of U.S. GDP every single day. Our role gives us a bird’s-eye view of international trading patterns and the needs of businesses and consumers around the world.
 
Over the years, we have seen trends emerge that are shaping global trade—the e-commerce boom, the growing need of companies to compete internationally, and the internationalization of supply chains, where a product might cross a dozen borders before reaching its final destination.
 
These trends have increased the pressure on international trade infrastructure both in terms of the volume of goods being traded and the time pressures many of our customers face.
 
Unfortunately, due to the differences in customs procedures, varying levels of technology capacity, and often excessively burdensome documentation requirements, we observe backlogs and, subsequently, higher costs to shippers.
 
These have a huge impact on businesses of all sizes, especially small and medium-sized businesses. They can lead to missed shipment deadlines and damaging financial losses, and over time can make or break a business’ relationship with a client.  The success of SMEs who ship internationally is made or broken by timely delivery; customs reform allows them to grow and market to foreign customers as they concentrate on building their businesses, not filing documents and tracking shipments.
 
Achieving a well-oiled customs machine will require some tune-ups.
 
Those tune-ups include urging governments to adopt procedures for pre-arrival processing of documentation and to provide a platform for electronic submission; to utilize risk management systems for customs based on appropriate criteria and concentrated on high-risk consignments (while expediting the release of low-risk consignments); to minimize formalities and documentation requirements; expedite release and clearance of goods; and to establish a single window, enabling traders to submit import/export data via a single entry point.
 
So, who wins through customs modernization?
 
Private Sector. Burdensome customs procedures impact all internationally-oriented businesses. Small and medium-sized enterprises often do not have the resources to navigate intricate processes and need some relief. Here at UPS, our teams all over the world listen to our customers and work to address the pain points they experience. We collaborate with national customs agencies to spur reform and provide the technical support needed to up their standards. Trade and industry groups that represent multiple companies and sectors provide a collective voice, further amplifying individual business calls for reform and modernization. 
 
Governments. Governments worldwide also have a clear stake in customs modernization. While they work to conclude bilateral and multilateral trade agreements, the benefits of reduced tariff and non-tariff barriers mean little if a good is held at a border at the mercy of outdated clearance mechanisms.
 
What’s more, customs reform serves to boost a country’s global commercial reputation. Governments pay attention to improving their global rankings on measures like the Logistics Performance Index, which attract foreign investors seeking a more favorable business environment for import/export. Lowering trade transaction costs can be particularly powerful for less developed countries. Customs reform can also promote regional interconnectedness and boost economic competitiveness. In Africa, for example, customs reforms may help to drive the development of the internal African economy. Today, only a few African countries manufacture much, mainly because national markets are small and barriers to trading within Africa are large.
 
Customs rules and regulations are foundational issues that impact the vast majority of worldwide commercial flow. Customs—dry as it sometimes may be—impacts everyone. We all have a stake in ensuring the supply chain machine is well-oiled. More efficient supply chains will promote more international economic activity, from budding micro-enterprises shipping goods out of a garage to the multinational supplying the parts for your future car. Let’s work to make thick borders a thing of the past.


About the Author:  Susan Zimmerman | UPS
Susan Zimmerman is a Manager on the International Public Affairs team for UPS in Washington, DC. In this capacity, she supports UPS’s global government and policy initiatives which advance our company’s business priorities in the more than 220 countries we serve. In addition to global support, Susan works on trade facilitation and customs modernization projects, as well as monitors opportunities in emerging markets in the Middle East and Africa. Prior to her current position Susan served as a Legislative Assistant in the DC office. In between this role and returning to UPS as a Manager, Susan worked with the U.S.-Egypt Business Council and the U.S.-Gulf Cooperation Council Business Initiative, within the U.S. Chamber of Commerce’s International Division. Prior to working for UPS, Susan served as Project Assistant at the National Democratic Institute, a non-profit development organization, where she supported programing in Francophone North Africa.
Promotion of Public-Private Partnership
- through the TFTEA of 2016
The theme of partnership is consistent across many of sections of the Trade Facilitation and Trade Enforcement Act of 2016 (TFTEA). The legislation calls on agencies such as U.S. Customs and Border Protection (CBP), Immigration and Customs Enforcement (ICE), the Department of Commerce, and the United States Trade Representative to strengthen their enforcement posture against trade violations as well as their facilitation roles in order to ensure legitimate trade flows as efficiently as possible. To do this, the different agencies must collaborate on information-sharing, form joint working groups, cooperate with foreign partners, and leverage technology to carry out activities such as combating duty evasion and intellectual property rights violations.

 
While the TFTEA takes measures to promote new interagency partnerships and also formalizes existing ones, it also promotes and formalizes many public-private partnerships. The institutions, programs, and policies that drive these partnerships are formed through information-sharing and co-creation in a manner that mutually benefits both U.S. authorities and the trade industry. While a number of these partnerships have been in practice for several years, the TFTEA formalizes them and demonstrates Congress’s understanding of the importance of partnerships in balancing enforcement, security, and economic stimulus through trade.
 
Although the TFTEA has numerous references to public-private partnership throughout its 105 Sections, discussed here are three in particular that represent the current state and evolution of partnerships between CBP and the industry.
 
Section 101, Trusted Trader
The first item of the TFTEA requires CBP and other federal agencies to work with the private sector to ensure all partnership programs provide trade benefits to participants. This refers primarily to CBP’s premier trusted trader program, the Customs-Trade Partnership Against Terrorism (C-TPAT). Through the partnership, industry participants receive preferential treatment in exchange for voluntarily supplying trade data elements to CBP beyond what is statutorily required and submitting to supply chain security validations. The additional advance information collected allows CBP officers to make more informed decisions and mitigate risk.
 
Globally, C-TPAT was one of the first programs of its kind. Starting with 7 participating companies in 2001, the program now has over 11,400 partners and accounts for over half of all merchandise imported into the U.S. This growth speaks well to CBP’s administration of the program as does the proliferation in recent years of trusted trader programs across the world, often referred to as ‘Authorized Economic Operator’ (AEO) programs. In its 2016 ‘AEO Compendium’, the World Customs Organization cited 69 programs with over 70,000 participants, and 16 more in development.
 
However, in order to maintain the innovative program as a world leader, CBP must ensure it is collaborating with industry to provide proper, measurable benefits to industry in exchange for their self-policing security measures and data-sharing responsibilities.
 
Besides CBP, other U.S. agencies with equities at the border, such as the Food & Drug Administration, Environmental Protection Agency, and U.S. Fish & Wildlife Service, have trade data submission requirements. To provide more efficient service to the industry, there is currently an effort to merge all of these requirements into an integrated U.S. Government-wide ‘Trusted Trader Program’. To accomplish this, there must be cooperative political will to drive the policy changes and technology implementation needed so that the program functions as intended.
 
Section 109: Formalizing COAC
Ongoing, transparent dialogue between CBP and the trade is important as well in order to co-create new ideas and attempt to find middle ground on disagreements where enforcement and facilitation may conflict. Section 109 of the TFTEA re-formalizes the Advisory Committee on Commercial Operations (COAC) a committee of appointed stakeholders who represent the industry. The nature of their respective agendas inherently means that the trade and CBP will not always agree. However, the COAC assists in reversing the adversarial nature of the Customs/Trade relationship that poses challenges to commerce in many other countries. One successfully co-created idea between CBP and the industry has been the CBP Centers of Excellence and Expertise (CEEs).
 
Section 110: Formalizing the CEEs
While not a voluntary partnership program in the same manner as C-TPAT, the CEEs take an innovative approach to trade facilitation by providing a streamlined, ‘one-stop-shop’ for industry members to have their questions answered and ‘customer service needs’ uniformly addressed.
 
The CEEs are managed virtually from 10 locations around the U.S. and have operated on a pilot basis since 2011. Section 110 of the TFTEA now formalizes them. The CEEs move functions of the trade facilitation process from a local port level to a national account management system where all of CBP’s expertise in a single industry can be focused to provide the optimal level of service to industry. The Centers increase uniformity of practices across ports of entry, facilitate the timely resolution of trade compliance issues nationwide, and strengthen agency knowledge on key industry practices to mitigate risk.
 
Formalization of the CEEs will hopefully mean a more formal dedication of resources by Congress to foster continued innovation. Section 110 also requires performance metrics on the CEEs to be provided, which will assist CBP in continuing to manage them effectively.
 
Conclusion
Authorities and industry both want secure, efficient trade. This is requisite to competing in the 21st century global economy and can be better achieved through cooperation.
Trusted Trader Programs around the world continue to expand the volume of available trade data. Coupling this volume with advanced data processing technology will allow trade management authorities to collaborate and mitigate risk in the global supply chain. Additionally, institutions like the COAC will help to increase transparency and foster revolutionary concepts like the CEEs. Improved Trade Facilitation and Trade Enforcement through public-private partnerships requires trustbuilding and continued commitment from all involved, but with global security and economic benefits at stake, the effort is worthwhile.
About the Author:  Allen Gina | CT Strategies
Allen Gina is the co-founder of CT Strategies, a subsidiary of Command Consulting Group in Washington, DC. Prior to founding CT Strategies Mr. Gina served in several posts at CBP, most recently as Assistant Commissioner for International Trade, where he oversaw over 1,000 employees and led the most extensive trade transformation initiative in CBP history. Some other posts he held at CBP during his tenure at Customs include Assistant Commissioner of International Affairs, Assistant and Deputy Assistant Commissioner for Intelligence and Operations Coordination, and Executive Director for the Joint Operations Directorate.
What's This About a New Drawback Law?
On February 24, 2016, President Obama signed into law the Trade Facilitation and Trade Enforcement Act 2015 (TFTEA). This includes section 906, the Drawback Simplification provision. Given that proposed changes to the drawback law were brought up at the first Customs Symposium 14 years ago, it’s been a long road to this moment. Even then, the drawback portion of the new law is not effective until two years from the enactment date, when drawback regulations and procedures must be completed.Duty drawback is a Customs and Border Protection (CBP) administered program that allows for the refund of duties, fees and taxes paid on imported merchandise upon the export of unused merchandise or when used in manufacturing articles that are subsequently exported. It serves as a manufacturing and export incentive program.


Drawback Simplification came about, in part, in reaction to annual internal audit reports claiming lack of controls (especially with exports), lack of automation, and extensive paperwork. Filing drawback electronically through Automated Commercial Environment (ACE) and Automated Export System (AES) goes a long way to improve controls. Fully integrating the drawback process into ACE will also ease the administrative burden on CBP and simplify the claim process and recordkeeping requirements.
 
In general terms, the drawback law changes include the following:
  1. Substitution – instead of matching on precise SKUs or descriptions (such as with apparel – size, style, color, gender, season, etc.), the 8-digit HTS (or Schedule B) number will be accepted. A lesser of the two value comparison (of import to export value or of import to raw material substitute value) will be introduced.
     
  2. Time frames – for all types of drawback, the claim will need to be filed within five years from date of import. Record retention will be three years from the date of liquidation.
     
  3. Third party documentation such as Certificates of Manufacture and Delivery (CM) and Certificates of Delivery (CD) will no longer be used. This activity will be supported by documents used in the normal course of business. 
     
  4. Claim responsibility – claimant and importer will be jointly and severally liable.
     
  5. Rulings and privileges, especially those for commercial interchangeability determinations for unused merchandise substitution, will be eliminated or reduced. 
     
  6. Electronic filing and review – paperless claims using the CBP and Trade Automated Interface Requirements (CATAIR) Drawback module, the automated broker interface (ABI) and document image system (DIS) will be the new way to file claims. Claim reviews will be conducted using CF28s with responses made using DIS.
     
  7. Destruction – complete destruction is no longer required for unused merchandise drawback. Instead, a reduction for the value of the destroyed material must be taken into account in the claim calculation.
     
  8. Fees – Harbor maintenance tax (.125 % of entered value) and merchandise processing fees (.3464 % of entered value capped at $485 per entry) are now eligible for refunds under manufacturing and rejected merchandise drawback.
     
  9. New drawback type 47 will eliminate entry types 41 – 46. Filings will be based on the provision of law and use codes instead.
While these changes are exciting and beneficial in terms of increased drawback and administrative efficiencies, there’s much work ahead. How all of this plays out has yet to be seen.
 
To bring drawback up to speed for the new law changes and to allow claims to be filed electronically through ACE, data field and calculation changes have to be made with both Customs’ and the trade’s systems.
 
In general terms, these changes include the following:
  1. Import fields
    1. Entry line item – while substitution claim designations will be made at an HTS level, designations and liquidations will be made at an entry line item level. Entries may be liquidated at this level as well.
    2. Country of origin – helpful with NAFTA claims and exceptions
    3. Fees – include HMT, MPF, and other related fields to allow for the collections of fees not only for unused merchandise but now also for manufacturing drawback.
       
  2. Export fields
    1. Export invoice value
    2. HTS/Schedule B number
       
  3. Calculations
    1. Lesser of the two value determination.
    2. Unit duty per line item – this is being envisioned but debatable in practice.
    3. Bills of material and formulae – these will have to be created using the HTS numbers and values.
       
  4. Claim processing and filing
    1. Electronic - paperless claims will be filed in ACE using the automated broker interface (ABI).
    2. More data will be transmitted such as header, import, manufacturing, export, and footer information.
    3. There will be record limitations.
    4. Data will include quantities and part numbers as applicable to the type of drawback.
Some changes will be effective in 2016 where filing in ACE is concerned. The other changes will be associated with the new regulations being promulgated and the new law taking effect in February 2018.
 
Understanding that the next few years in drawback are in a state of flux, it is important to file as much drawback as possible under the current provisions prior to the CATAIR Drawback module going live. The date was originally anticipated as Oct. 1 but Customs has recognized the need for more testing and certification time for all the stakeholders and has moved the date back four weeks to October 29th. At that time, it is anticipated that a slowdown or even stoppage to drawback filing in the short term may occur. All data should accommodate the new field requirements to be ready for the influence of the new law. Thought and analysis should be given to pursuing new and different drawback opportunities in light of the new law as well as the new fees that are now eligible for refund.
About the Author:  Michael Kerlen | Comstock & Theakston, Inc. - Michael Kerlen is a Vice President of Comstock & Theakston, Inc. He joined the firm in 1988 and became a Licensed Customs Broker in 1991. Mr. Kerlen has developed and managed complex drawback programs for clients in various industries including transportation, apparel and footwear, jewelry, alcoholic beverages, chemicals and petroleum. He has taught drawback and compliance courses for our client seminar series each year and for outside organizations such as the World Academy. He has made presentations at various trade associations and individual companies. Mr. Kerlen has published a number of articles on duty drawback and has been the company's representative at AAEI, American Petroleum Institute, and other organizations' conferences devoted to improving trade programs and expanding duty drawback. His engineering and business background serves him well in this interesting and unique business.
Customs and Border Protection and Intellectual Property Rights: Information Disclosure
The past year has seen changes to the regulatory and statutory authorities for CBP to provide intellectual property owners with more information arising from CBP’s enforcement actions. In September 2015, CBP issued its final rules relating to information disclosure in cases involving counterfeit trademarks (Federal Register September 18, 2015). The Trade Facilitation and Trade Enforcement Act of 2015, signed into law in February 2016 (P.L. 114-125) (hereinafter, “the Act”), provides CBP with statutory authority to disclose more information in cases of copyright infringement and provides explicit authority to CBP to stop the importation of circumvention devices.

 
The September 2015 final rules amended 19 C.F.R. §133.21. The most significant changes regarding disclosure are those relating to CBP providing information found on the merchandise and/or packaging, including labels, to the trademark owner. The final rules permit CBP to provide trademark owners with unredacted photos, images and samples. In the past, CBP withheld serial numbers, dates of manufacture, lot codes, batch numbers, universal product codes, or other identifying marks appearing on the merchandise or its retail packaging (including labels), in alphanumeric or other formats. The final rules published in September 2015 permit CBP to provide this information. As a result of the final rules, trademark owners may be able to improve their own enforcement efforts upon receiving this information.
 
The Act gives CBP statutory authority to share unredacted information in both trademark and copyright cases. One requirement that is included in the Act with regard to information disclosure is that the disclosures apply “with respect to merchandise suspected of infringing a trademark or copyright that is recorded with U.S. Customs and Border Protection”. (Emphasis added). Copyrights were not addressed in the final rule issued in September 2015. Thus, where CBP suspects that copyright infringing goods are being imported, copyright owners who have recorded their works with CBP for protection may be provided unredacted information in order to assist CBP in making a decision on copyright infringement.
 
The Act provides another benefit for copyright owners. The Act states that DHS must implement a process that will permit copyright owners to receive the disclosures from CBP if the copyright owners have submitted a copyright registration with the U.S. Copyright Office, but have not received their Copyright registration document from the Copyright Office.
 
The Act also addresses CBP’s authority to stop devices “primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work”. In addition, CBP is authorized to stop an importation if a “technology, product, service, device, component or part thereof has limited commercially significant purpose or use other than to circumvent a technological measure that effectively controls access to a work”. Thus, neither the Act nor Section 1201 of Title 17, U.S. Code, attempts to describe a specific item that may contain what is used to circumvent the technological measure. Generally, the aim is to give CBP explicit seizure authority, which it has previously exercised (See HQ Ruling 471202 (Dec. 1, 2001)).
 
As a final note, it is always recommended that trademark and copyright owners record their valuable intellectual property assets with CBP. As part of an effective corporate intellectual property enforcement program, CBP and ICE should be a consideration if not an active part of the program and strategy. Today’s global trade environment requires companies to seriously consider the role of CBP/ICE in the United States and foreign customs administrations as key components of an effective IP asset protection program. Today, WTO member countries are already obligated to have a system in place to combat the importation of trademark and copyright infringing goods. Because of global trade trends, numerous countries have authorized customs administrations to take action against infringing goods intended for export or goods moving in-transit. As a result of the changing landscape, more information shared with trademark and copyright owners should contribute to more effective enforcement by the IPR owners themselves.
About the Author:  Timothy Trainer | Global Intellectual Property Strategy Center - Timothy Trainer is the Founder of the Global Intellectual Property Strategy Center (GIPSC). He counsels clients on obtaining commercial trademark licenses from the Department of Defense, provides advice regarding Customs IPR enforcement in foreign jurisdictions, represents clients regarding trademark registration, counsels clients and assists in drafting proposed changes to intellectual property-related federal legislation, and monitors general intellectual property policies and developments for clients. Mr. Trainer has also been engaged by entities involved in projects to prepare and deliver intellectual property enforcement (customs) training in various countries. Before establishing GIPSC, he was the president of the Washington, D.C.-based International AntiCounterfeiting Coalition (IACC). Prior to joining the IACC, Mr. Trainer was an attorney in the U.S. Patent and Trademark Office’s (PTO) Office of Legislative and International Affairs. He has also worked in the Intellectual Property Rights Branch of the U.S. Customs Service (now under the Department of Homeland Security), and before joining the government, practiced law in the Washington, D.C. office of the firm, Arter & Hadden. Mr. Trainer has developed online interactive intellectual property awareness tools, two versions of which are available by self-registration at www.galaxysystemsinc.com. Mr. Trainer is an author who has contributed articles to the Bloomberg BNA World Intellectual Property Report, The John Marshall Review of Intellectual Property Law, Copyright World, Trademark World, Trademark Reporter, AIPLA Quarterly Journal, Federal Circuit Bar Journal, Managing Intellectual Property, and China Business Review.
WCO Hosts Meeting of Brussels
Women in Trade Network
On 8 September 2016, the World Customs Organization hosted a meeting of the Women in Trade Network, which is a growing group of women in the trade arena in the Brussels area. This network of women has been meeting over the last year, to gauge the level of interest among the trade women in the Brussels area, to build an organization and support the proactive engagement of women in topics related to global trade. This meeting included the participation of over 100 women, and included the European Union Commissioner for Trade, Cecilia Malmström.
 
WCO Secretary General Kunio Mikuriya welcomed the group and emphasized the interest of the WCO to promote engagement with organizations involved in global trade and also to promote gender equality in all aspects of Customs and Trade. During the event, Director of Compliance and Facilitation Ana Hinojosa shared some brief information with the group about the WCO and its mission and vision. She further shared personal experiences about how Customs work has a very symbiotic relationship with Trade work. She also said that the WCO will be putting together a work plan to explore any gender equality challenges, as they relate to Customs and the stakeholders it engages with.
 
Commissioner Malmström provided a very interesting perspective of the work she has been doing, in particular as it relates to the negotiations on the Transatlantic Trade and Investment Partnership (TTIP). She shared her strong views about the benefits of TTIP, especially with regards to the European trade values incorporated into the agreement. Specifically, she highlighted the importance of the provisions that provide protection for the environment, labour conditions, and gender equality. She urged members of the Women in Trade Network to follow the debate and the developments, and not to hesitate to take part in the discussions on these issues.
 
This was the first visit of Commissioner Malmström to the WCO; however, she agreed that there are great opportunities for future collaboration and continued engagement.
[L to R: Author, Kunio Mikuriya (WCO Secretary General), Cecilia Malmström (European Union Commissioner for Trade)]

About the Author:  Ana Hinojosa | World Customs Organization (WCO) - Ana B. Hinojosa was elected as Director of the World Customs Organization (WCO) Compliance and Facilitation Directorate by leaders of Customs Services from around the world during the opening of the 125th/126th World Customs Organization Council Meeting. She supervises the WCO’s critical global efforts related to compliance and facilitation, which include many of the most pressing issues facing Customs Services today, such as supply chain security, data harmonization, coordinated border management and enforcement. Prior to assuming this post at the beginning of 2016, she was Deputy Assistant Commissioner for CBP’s Office of International Affairs. She also served CBP as the Director of Field Operations, and as an Area Port Director at Los Angeles International Airport and Dallas Fort Worth International Airport.
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