Proposed Legislation Aims to Streamline Customs Processes and Enhance Data Transparency

On July 31, 2024, Senators Bill Cassidy (R-LA) and Catherine Cortez Masto (D-NV) released proposed legislation entitled the Customs Facilitation Act of 2024, which aims to modernize laws administered and enforced by U.S. Customs & Border Protection (CBP) and streamline the movement of goods and services across borders. The overall goal of the legislation is to create a real “One U.S. Government at the Border.”

Provision Details

The Customs Facilitation Act of 2024 aims to address the fragmented, costly, and slow processes currently involved in the entry of goods across U.S. borders. In addition to CBP, 49 partner government agencies (PGAs) “touch” an import/export transaction with a law or regulation that they must also administer and enforce. For instance, the press release accompanying the bill highlights that importing a simple item like a can of wet pet food currently requires 54 data elements to be submitted to three separate government agencies, with 21 redundant data elements and 16 inconsistent definitions. The proposed changes seek to significantly simplify and improve the efficiency of these processes.

One of the key provisions of the bill codifies the Border Interagency Executive Council (BIEC), previously established by Executive Order. This council will enhance coordination among customs, transport security, health, and other agencies, aiming to reduce red tape and improve trade processes. Additionally, the bill proposes the formal establishment of a Single Window Import and Export Cargo Processing System, a uniform automated platform for processing and releasing cargo, ensuring all trade data can be submitted and processed in one place. Continuous updates to CBP’s Automated Commercial Environment (ACE) system will also enhance trade processing capabilities and collaboration with other agencies.

The bill aims to update CBP programs such as duty drawback by accelerating the payment of refunds on duties for imported items that are re-exported under certain conditions, with proper documentation and the required surety bond. This aligns with the objectives of another pending bill in Congress (H.R. 7864) to amend the Tariff Act of 1930 to treat certain merchandise as “unused” for drawback purposes, thereby simplifying the eligibility criteria for duty refunds. Under H.R. 7864, merchandise will be considered unused within the U.S. if it is returned inventory, is commingled with merchandise that has not been used within the U.S. and is treated in the normal course of business without distinction from unused merchandise.

The Customs Facilitation Act of 2024 additionally mandates regulations to allow for the advance submission of export manifest data prior to departure, reducing redundant data submission requirements. Clerical errors in export data submissions will also be exempt from penalties, provided they are not part of a pattern of violations. 

The bill introduces data transparency mandates, requiring federal agencies to consider stakeholder perspectives and data availability while assessing potential redundancies. For instance, it mandates that CBP notify the trade community of any changes to the Customs-Trade Partnership Against Terrorism (CTPAT) security criteria. Additionally, the proposed bill requires the inclusion of best practices for mitigating forced labor in supply chains in the CTPAT Handbook. Furthermore, deadlines will be established for CBP responses to trade community requests. A system will also be implemented to provide up-to-date contact information for CBP and Centers of Excellence (CEE) personnel.

Other proposed changes to the bill include a study by the U.S. Government Accountability Office (GAO) to examine and recommend modifications to the Harmonized Tariff Schedule of the United States and fee schedules, aiming to reduce compliance costs and eliminate unnecessary red tape. Additionally, the CEE will develop and distribute guidance on compliance with trade laws and post-entry procedures to enhance trade transparency.

These proposed changes to import and export processes will help businesses comply with trade laws and navigate post-entry procedures more efficiently. The establishment of clear points of contact within CBP and other agencies will facilitate better communication and quicker resolution of issues. Businesses can also expect faster refunds on duties for re-exported items, thus improving cash flow.

How BDO Can Help

BDO’s Customs & International Trade Services team can advise companies on potential areas of the bill that may impact them. BDO can also provide recommendations to help companies submit comments for the feedback process before the August 30 deadline.

Additionally, BDO can assist clients in expediting duty drawback claims by reviewing and ensuring proper documentation and export data submissions, thereby minimizing clerical errors. BDO helps businesses navigate the complex rules governing duty drawback to maximize refunds on duties for items exported in the same condition as imported or as further manufactured items later exported and reduce compliance costs, ultimately supporting their competitive advantage in the global marketplace.

Beyond the services mentioned above, our offerings include:

• Tariff classification
• Origin determination
• Foreign-trade zones
• FTA qualification
• Customs valuation and transfer pricing
• Import and export compliance assessments
• Supply chain planning
• Customs rulings, protests, and other administrative filings