More than 28 years ago, supply chain thought leaders re-imagined customs procedures in the United States, using novel approaches to create the US Customs Modernization Act of 1993 (MOD Act). The landmark legislation introduced two significant ideas: informed compliance and shared responsibility. Since then, the trade community has charted a challenging course to achieve the MOD Act’s ambitions.
Border security resurfaced as a priority after the events of Sept. 11, 2001, which also reaffirmed the importance of shared responsibility in national security. US Customs and Border Protection (CBP) and the trade community agreed that “co-creation” would secure the supply chain and facilitate legitimate trade. Fast forward 15 years, and we saw new challenges at the border with the rise of e-commerce, illegitimate trade, and counterfeit goods.
Today, importers and exporters face those prior risks along with new environmental, social, and corporate governance compliance rules.
CBP earlier this year created a 21st Century Task Force to help shape policies that address current customs issues and to plot a path for the future. Many in trade, though, fear that CBP’s final product will push it away from the MOD Act’s tenets.
Ultimately, it should be up to the trade, as it was 28 years ago, to proactively lay out the vision for customs and maintain the original intent of the MOD Act. In AAEI’s view, the next 30 years for customs should include the following adjustments:
- Reasonable care decision-making should be re-engineered and measured at the account level instead of transactional levels;
- Informed compliance should include transparent programs and reliable guidance that eliminate penalties;
- CBP should be managed by metrics, reporting actions identified as critical, such as time frames for cargo release;
- And CBP’s Automated Customs Environment (ACE) should be re-engineered to facilitate trade, not just police it.
The MOD Act is still viewed as CBP’s most sweeping reform law. As the industry looks ahead, it must not lose sight of its original tenets: partnership and shared responsibility between CBP and the trade community and a balance between enforcement and trade facilitation.