White House Mandates ITDS Completion by 2016 in Executive Order

The order calls for completion of ITDS by the end of 2016. The ITDS “will allow businesses to transmit, through an electronic ‘single-window,’ the data required by the U.S. Government to import or export cargo,” said the press release (here). “At present, businesses must submit data to multiple agencies through various channels, often in paper form. The ITDS will save businesses time and money, and dramatically reduce the number of forms a business has to fill out to import or export. The ITDS will allow more efficient government decision-making associated with goods arriving at the border, reducing the time for clearing goods from many days to, in some cases, seconds. This will dramatically speed the flow of legitimate commerce across our borders.”

The executive order calls for the Interagency Steering Committee, made up of the Secretaries of the Departments of Homeland Security and Treasury and the ITDS Board of Directors, to confirm by Dec. 31, 2016 the system can transmit a harmonized set of data elements through a single window and a transition away from slower, paper-based filing has occurred. The Dec. 31, 2016 completion date for ITDS aligns it with the timeline for ACE, which will be the required filing platform as of Oct. 1, 2016. ITDS is statutorily required to be implemented “not later than the date” ACE is “fully implemented.”

"By demonstrating our commitment to utilizing technology, coordinating government processes, fulfilling international obligations, and embracing innovative approaches to promote new opportunities for trade facilitation in the 21st century, we can lead by example and partner with other countries willing to adopt similar programs," said the order. "This will encourage compliance with applicable laws and, more broadly, result in a more prosperous, safe, secure, and sustainable trading environment for all."

The agencies involved are also directed to review "whether any regulations should be modified to achieve the requirements set forth in this order" and "promptly initiate rulemaking proceedings to implement necessary regulatory modifications." Agencies involved in border management will also be required to report to the ITDS Board within 180 days on their "anticipated use of international standards for product classification and identification." Affected independent agencies, the Federal Communications Commission for example, " are strongly encouraged to comply with the requirements of this order."

The President will also push for government partnerships with stakeholders outside the government “to build more efficient business processes and improve border management policies,” the release said. An expanded Border Interagency Council (BIEC), made up of agency leaders, "will be responsible for improving coordination among the dozens of agencies with import and export requirements and with outside stakeholders," the White House said. "The BIEC is charged with cutting red tape and reducing supply chain inefficiencies, while managing the risks presented by goods flowing in and out of the United States." The BIEC will also "encourage other countries to develop similar single window systems to facilitate the sharing of relevant data, as appropriate, across governmental systems and with trading partners," the order said. CBP and the Treasury Department did not return requests for comment.

'More than Just an Optic'

The involvement of the White House adds some high-level and public pressure to the agencies that are working on the system, said Al Gina, a partner at CT Strategies and former assistant commissioner in the CBP Office of International Trade . The order "helps align all the federal agencies that have equities on the border" because they will now have to respond to "their boss's boss," he said. It's "more than just an optic" and provides "some accountability" to those agencies involved, said Gina. The order also forces the agencies to move ITDS development further up on their priorities list, he said.

CBP is in the process of completing memorandums of understanding (MOUs), which are required as a result of privacy laws that require certain protections for the sharing of information, with a number of agencies. CBP has finished a total of 12 such MOUs, the ITDS board said in its recently released FY 2013 report (see 14012923)). The order is effectively a "forcing mechanism" for "resolution of these legal challenges," Gina said.

The executive order will also help encourage other agencies to take the budgetary steps to meet the 2016 implementation date, said Mike Mullen, executive director of the Express Association of America and a former official at CBP. The order may also help to ramp up collaboration among some reluctant agencies, he said. “The Express industry is delighted the president is taking this step. The problem with implementing ITDS is the system incorporates over 40 agencies that are involved in the clearance process, and at least 9 of those agencies have the authority to stop goods. The only way to get them together is for the president to take this step,” said Mullen. “All the agencies are currently at different stages of implementation so it was necessary to have a top level push to get it done by the targeted date.”

Continued funding through CBP isn't expected to be a problem as the CBP Fiscal Year 2015 appropriations are predicted to increase, said Mullen. The CBP Automated Commercial Environment is the umbrella system ITDS falls under, so funding for ITDS could potentially increase in the foreseeable future from the $4.8 million CBP spent on ITDS in Fiscal Year 2013, he said. The ITDS will also incorporate the CBP Air Cargo Advance Screening and Simplified Entry pilots, two programs that have been successful, said Mullen. CBP is working with 47 other agencies to establish the ITDS, a requirement of the Security and Accountability For Every (SAFE) Port Act of 2006. All agencies involved in the goods clearance process are required to participate in the ITDS.

Faster processing will be an important result of a completed ITDS, said Mullen. “Currently information goes into the CBP system and other systems, like the FDA PREDICT system and elsewhere," he said. "Those agencies are performing separate clearances and that can take a lot of time. The single window and release, that meets all the government requirements, will allow the large majority of goods that are fully compliant to be processed in seconds.”

The success of a single clearance through ITDS remains an open question, said customs lawyer Jon Fee, a partner at Alston & Bird. The current, long-standing entry and release process has significant “momentum” and “hubris,” but actually works relatively efficiently, said Fee. “I’d love to think the information gathering process could be streamlined, but there are some bits of data that can’t go unregulated, such as confirming country of origin and threat levels and things such as that that still have to be collected. A unified portal, a single window as they call it … that overhaul might slow things down rather than speed them up.” Still, the executive order is likely to increase collaboration among agencies, said Fee.

U.S. Trade Representative Michael Froman added his support for Obama's order. “This Executive Order helps to clear the way for American businesses large and small to compete and win in the global marketplace," he said in a press release. "The United States is a leader in facilitating trade around the world, but the President’s action ensures that the elimination of red tape begins here at home. In December, World Trade Organization Members committed to smart steps that will ease the flow of trade and make it possible to support more jobs and families through international commerce. Today, we’re ensuring that American companies and workers face fewer hurdles sending Made-in-America goods to global customers.”

The National Electrical Manufacturers Association (NEMA) said it was also encouraged by the order. “Increasing globalization is stressing the U.S. regulatory systems nearly to the breaking point,” NEMA President Evan Gaddis said. “Modernizing our systems through the successful implementation of the ITDS will have a positive effect on American competitiveness and the U.S. economy.” -- Tim Warren, Brian Dabbs