COAC Recommends New Automated System to Control Right to Make Entry
Members of the trade community recommended that CBP work toward an automated system that would allow greater control over the right to make entry, at a meeting of the Advisory Committee on Commercial Operations (COAC) held May 22 in Miami. That would help address enforcement issues related to identity theft and, combined with additional data requirements and automation for CBP Form 5106, would replace an earlier idea that changes be made to Part 111 broker regulations related to powers of attorney. CBP officials attending the meeting praised the suggestion of an automated system, with an official involved in the development of the Automated Commercial Environment (ACE) saying similar capabilities are already in place.
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Proposal for Automated System Comes After Review of Proposed New 5106 Elements
At a COAC meeting in November, COAC’s Trade Modernization Subcommittee had decided that it would hold off on work to draft requirements for brokers to collect information from importers until it could review new data elements CBP is proposing for its CBP Form 5106 Importer ID Input Record (see 13111801). It also recommended a change to 19 CFR 111.36(c) to require that brokers obtain a power of attorney directly from the importer. The subcommittee has now had the chance to review the new proposed data elements for Form 5106, and made the following recommendations during the May 22 meeting:
Proposed 5106 rule by September. “The COAC recommends that CBP publish the notice of proposed rulemaking regarding changes to the CBP Form 5106 by the end of the 2014 fiscal year, in order to solicit comments from the stakeholders on the collection of the proposed 5106 data elements. The additional information will support CBP’s effort to combat identity theft, antidumping duty evasion, and other fraudulent schemes which undermine our global economy.”
Limit burden for companies in good standing. “COAC recommends that consideration should be given to limiting additional information requirements from companies in good standing, with an existing CBP Form 5106 on file with CBP.”
Automated system for 5016 data. “COAC recommends that the 5106 information collection process be automated in ACE, with consideration for the role of party providing the information. The COAC recommends that both importers of record and customs brokers should be able to file and query CBP Form 5106 data.”
No Part 111 changes after all. The COAC recommends no changes be made at this time to the current time regarding the collection of a valid power of attorney in 19 CFR 111.
Automated system to control right to make entry. COAC recommends functionality in ACE be built to help prevent corporate identity theft. Proposed functionality should enable the importer of record to control and limit which customs brokers or filer codes are authorized to make entry in each port of entry tied to the importer of record number. This could eliminate most possibilities for corporate identity theft should an IOR choose to utilize this functionality. Eventually this ability would empower the importer of record to use ACE to control the specific ports of entry in which entry can be made, and by which customs broker filer codes. An importer could potentially employ functionality to restrict any entry being made in their name at a specific port of entry if necessary. The importer of record could use this functionality to address changes in their supply chain as they occur and authorize entry for those ports for a specific broker filer code, several specific filer codes, or all filers.
CBP Officials Receptive to New System
CBP officials in attendance praised the proposal to create an automated system to control right to make entry. Troy Riley, director-commercial targeting and enforcement called the suggestion “insightful” and “brilliant,” and said “we should do this.” He also thanked COAC for its feedback on proposed changes to Form 5106, saying CBP “definitely can prepare and have a [proposed rule] out timely.”
“From an investigative standpoint, these are critical vulnerabilities that we see consistently in large scale investigations: importer identity theft, the use of shell companies, the fraudulent use of importer of record,” said Lev Kubiak, director of the national intellectual property rights coordination center (IPR Center) at ICE. “Anything that you can do to tighten this up … is very much appreciated and I think will go a long way to helping us in this space,” he said.
Brenda Smith, director of CBP’s ACE business office, said similar capabilities are already in place. “I think the automation is all doable,” she said. “None of the recommendations are surprises, and I think this gives us a good opportunity to understand what is the priority of these efforts, both 5106 as well as restricting the filing,” said Smith. “We do have some functionality related to restricting who is able to use a particular type of bond that I think is a good model for this in ACE. We can certainly work with that, we just need to understand where it is on the priority list.”