Monday Morning eBriefing

On Thursday of last week, the Senate voted unanimously to pass the Miscellaneous Tariff Bill Act. This bill is an amended version of the document that passed in the House earlier this year. The items that were removed from the original bill are propargyl butylcarbamate, esfenvalerate, collapsible insulated food and beverage bags, rotary hand cutting tools, full tang knives, electric commercial vehicles, and cabs and bodies for electric vehicles. The original bill, with its over 1700 duty suspensions or reductions on imported products not produced in the U.S., can be found here.

Butch Connor of John S. Connor, Baltimore, spoke before the House Port Caucus on Wednesday, July 18th, representing NCBFAA in describing the value of the customs broker, freight forwarder and NVO to the U.S. economy.

The NCBFAA Board of Directors would like to acknowledge the following 18 new members approved at the June 23 meeting in Washington, D.C.

Last Monday, Mary Jo Muoio (Chair of NCBFAA's Customs Committee) and Jon Kent (Counsel) met with a group assembled by John Leonard from the Office of Trade and OFO to discuss the Association's punch list of functionalities missing from core ACE. For well over a year, NCBFAA has engaged in discussion about such issues as AII, the House Airway Bill, de minimis and approximately two dozen functions that our members felt essential to the needs of the industry.

On July 6th, after the additional 25% tariffs on over $34 billion of Chinese goods went into effect, China reacted by enacting additional tariffs of 25% on over 545 products originating from the United States, also valued at $34 billion. These tariffs cover commodities such as agricultural products such as beef and dairy, automobiles and aquatic goods. Additionally, China plans to enact additional tariffs on 114 products originating from the United States, valued at $16 billion should the U.S. enact additional tariffs. These commodities include chemical products, medical equipment and energy products.

Beginning last Friday, the European Union (EU) has started charging import duties of 25 percent on a range of U.S. products as retaliation to the U.S. imposed tariffs on EU steel and aluminum earlier this month. This list of products includes home appliances, motor vehicles, household articles, apparel and footwear, textiles and fabrics, whisky, tobacco products and more. All told, these duties equate to approximately $3.2 billion of U.S. goods.

The White House officially announced that retaliatory tariffs will be imposed on 818 HTS lines, with collection of the additional 25% duties beginning July 6. At the same time, an additional 284 tariff lines are being proposed, but will first undergo a public comment process. The targeted products fall primarily in aerospace, automobile, industrial machinery, information technology and robotics industries. The U.S. Trade Representative announced it will establish a process for U.S. companies to request exclusion from the tariffs on specific products if no alternative supplier exists.

As we have reported previously, based on a petition filed by several trade associations, including the NCBFAA, in FMC Docket P4-16, the FMC has initiated Fact-Finding Investigation 28, headed up by FMC Commissioner Rebecca Dye, that is charged with making recommendations to the Commission concerning unfair or unreasonable assessment of demurrage and detention.

Last week, U.S. Customs and Border Protection (CBP) announced they would be spending the $30M in funding issued through congressional appropriation for FY2018 on enhancements to the ACE platform. CBP's goals for enhancing ACE come from an active dialogue with the industry, government agencies and congressional stakeholders, as well as the Customs Commercial Operations Advisory Committee (COAC). Enhancements include:

Last week, House Speaker Paul Ryan set May 17 as the last day for the Trump Administration to submit notice to Congress of its intent to sign a new NAFTA deal in order for a vote to occur this year (due to the procedural steps that must occur prior to a congressional vote). Now that the May 17 date has passed, Speaker Ryan said there may still be "some wiggle room," though warned that time is running out for a vote in Congress this year. House Ways and Means Chairman Kevin Brady downplayed the significance of the timing for a vote in Congress, urging negotiators to "stay at the table" to reach a modernized NAFTA with high-standard rules. "I hope all countries continue working in good faith to get this done," he said, "whether that means a vote in Congress this year or next."

During its Annual Membership Meeting at the April 29-May 3 NCBFAA Annual Conference at the Westin Mission Hills Resort and Spa in Rancho Mirage, CA, the National Customs Brokers & Forwarders Association of America, Inc. (NCBFAA) announced new Officers and Board members.

Recently, several steamship lines - including MOL and Hapag-Lloyd - issued notices or tariff changes indicating, because of the shortage of drayage operators at various ports, that they would at their option elect to terminate their contractual obligations to deliver cargo. This would be their practice even though this involved "door" moves. Instead, the carriers indicated that they would treat their contractual obligations as satisfied, terminate their service at that point, and hold the NVOCC or BCO liable for any demurrage or detention arising out the carrier's inability to move the cargo out of the rail or port ramp.

NCBFAA has been working diligently with our membership, our industry's software developers and CBP on implementing the latest changes in ACE. In addition to the recent updates, ACE has been tasked with managing an ever-changing array of tariffs, PGA requirements and increasing government and trade needs. We are continually updating our ACE tracking list (link) and have put out our white paper (link) in order to further the shared goal of a fully functional ACE system of record. We have added DIS documentation issues to the list as well as updated several other items.

On April 12, U.S. Customs and Border Protection (CBP) Commissioner Kevin McAleenan appeared before the House Appropriations Committee Subcommittee on Homeland Security for CBP's FY 2019 budget hearing. While most of his written testimony dealt with immigration and border infrastructure, Commissioner McAleenan had this to say on ACE:

To help better understand the issues and problems surrounding Demurrage and Detention, FMC Commissioner Dye has requested meetings with interested persons attending the NCBFAA Annual Conference.

The NCBFAA Regulatory Agencies Committee (RAC) continues to work with the Food and Drug Administration (FDA) to gain a better understanding of the agencies regulatory and procedural data requirements under ACE. Since the implementation of FDA processing in ACE, several questions have arisen regarding data filing for items that may not have been required under ACS. Questions have arisen for illuminating articles such as items containing LED'sand fluorescent bulbs along with food contact materials. Following is the limited response we have received for guidance to the trade.

As we have previously reported, the NCBFAA was part of a coalition of parties that filed a petition with the FMC requesting that the agency issue an interpretive rule on the issue of demurrage and detention charges (in Docket No. P4-16). That petition was filed as a reaction to the excessive demurrage and detention charges assessed by the lines during periods when NVOs and BCOs have been unable to pick up from or deliver containers to the piers for reasons beyond their control. For example, the service meltdown a couple of years in LA/Long Beach and the severe weather that has struck various ports has contributed to significant congestion in the ports, often making it impossible for these containers to move during the existing free time period.

On March 12, U.S. Senator Jeff Flake (R-Ariz.) introduced legislation to nullify the tariffs on steel and aluminum announced by the White House that are scheduled to go into effect on March 24. Flake's bill would prohibit "the implementation of any changes to the Harmonized Tariff Schedule included by the presidential proclamations [1] [2] dated March 8.

In a letter to the Senate Committee on Commerce, Science and Transportation Chairman John Thune and Ranking Member Bill Nelson, National Customs Brokers & Forwarders Association of America (NCBFAA) President Geoffrey Powell offered full support for the re-nomination of Commissioner Daniel B. Maffei to the Federal Maritime Commission (FMC).

Last week, CBP released their "Standard Guidelines for CBP/Trade Outages," a comprehensive guide to the downtime policies and procedures CBP and the trade will follow during ACE system interruptions. According to CBP, this is a "living document" and will be continuously reviewed and updated to adapt to changing circumstances.