Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



What Direction U.S. Customs?

In testimony before the Senate Commerce, Science and Technology Committee earlier this year, Customs and Border Protection ("CBP") Commissioner Bersin laid out the priorities of the agency. He began with a familiar recitation: stem the illegal flow of drugs, contraband, and people; protect agricultural and economic interests from harmful pests and diseases; protect American businesses from theft of their intellectual property; enforce textile agreements; determine and track import safety violations; regulate and facilitate international trade; collect import duties; facilitate legitimate travel; and enforce U.S. trade laws. What caused some concern was his statement "[w]hile security is our core mission, CBP also has important trade responsibilities." While many had feared that the pressures put on CBP by Congress and other sources might skew the agency’s long-standing approach in which enforcement of the law is coequal with trade facilitation, there was widespread (but clearly naïve) hope that this careful balance remained the attitude of the agency. Comm. Bersin’s statement makes clear trade facilitation is "important," but it is not a "core" mission. That is indeed an unfortunate turn of events.

Of additional interest was Comm. Bersin’s comments about the Import Safety Commercial Targeting and Analysis Center ("CTAC"), which was developed with the intention of making it a multiagency or fusion center allowing CBP to work closely with other federal agencies dedicated to import safety concerns. Not surprisingly, the Food and Drug Administration, Consumer Product Safety Commission, and Food Safety and Inspection Service are active participants. However, there are many other agencies that should belong. For example, there are legions of importations of motor vehicles from Asia that are found by CBP to be nonconforming. Where are the Department of Transportation and Environmental Protection Agency in this process? Similarly, Comm. Bersin mentioned enforcement of textile agreements in his speech. Operation Mirage, wherein CBP is carefully determining the admissibility and accurate valuation of gross numbers of transactions, especially from China, has surfaced what appears to be rampant noncompliance. Although CBP is the foremost agency when it comes to enforcement of the laws related to textiles and apparel, why do we not see the U.S. Trade Representative and the Office of Textile and Apparel, to name two, actively involved in these efforts?

The FDA, CPSC, and FSIS do have specific public-harm concerns regarding product safety, but when will we see USDA, which also has a product-safety mandate, as a member of the Import Safety CTAC? To his credit, Comm. Bersin has indicated CBP will host a conference this fall with other "major" government agencies as a means to gain their involvement. This is something the private sector needs to carefully monitor as product safety is a major issue facing companies today. Whether or not you are in a high-risk product line, such as toys or food, you must carefully manage how your products are made and sold, lest you run afoul of one or another product-safety regulation or consumer law. As more federal agencies become members of CTAC, the reach of the regulators expands to other industries and other trade lanes. Keeping abreast of the legal requirements is one thing, but keeping up to date regarding best practices in your industry is equally important. We have already seen the increase in lawsuits arising from arguably novel contexts, like class actions by shareholders of companies that have paid significant Foreign Corrupt Practices or antitrust violation fines. It is reasonable to anticipate that failure to comply with your industry’s best practice can trigger similar liabilities.

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