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CBP Issues E-Commerce Strategy

CBP issued on 6 March an electronic commerce strategy aimed at addressing the growing volume of small package imports as well as the challenges and opportunities that direct-to-consumer e-commerce presents for the economy and security of the United States. The strategy covers a range of issues of particular importance, including legal and regulatory reform, operational changes and enhancements at CBP, private sector compliance through enforcement and incentives, and international trade standards for e-commerce. 

CBP defines e-commerce for purposes of its strategy as high-volume, low-value shipments entering U.S. port limits. The number of Americans shopping online has grown from 22 percent to 79 percent since 2000, increasing the opportunity for illicit and dangerous products to cross U.S. borders. This presents a significant challenge for CBP because the agency’s current operational structure is focused on scanning for risks around high-value, containerised shipments, which require importers to submit certain data elements in advance of the physical arrival of a shipment. According to the strategy, since CBP receives less actionable data on e-commerce shipments it must put into place new protocols that allow for effective identification, enforcement and deterrence of trade violations in the e-commerce environment.

Additionally, the growing volume of e-commerce shipments is taxing existing agency resources. To illustrate the challenge, at the end of fiscal year 2017 one port that has an express consignment hub received an estimated 25 million predominantly informal and de minimis value shipments, up from an average of only 2.4 million shipments between 1997 and 1999. The U.S. Postal Service has also experienced a considerable increase in the number of international mail packages bound for addressees in the United States and industry projections point to further growth in air freight traffic as the volume of on-line sales continues to rise over the next decade.

CBP is restructuring its framework for ensuring compliance of informal entries in order to adapt to this changing environment, including through the creation in September 2016 of the E-Commerce and Small Business Branch within the Office of Trade. This branch was tasked with strengthening compliance of e-commerce transactions and developing CBP’s e-commerce strategy, which sets forth the following goals. 

Legal and Regulatory Authorities
Enhance legal and regulatory authorities to better posture CBP and interagency partners to address emerging threats such as dangerous contraband and counterfeits by (i) reviewing existing legal and regulatory authorities to develop risk segmentation processes, improve targeting and realign resources; (ii) developing a plan that will incentivise compliance from all stakeholders within the e-commerce supply chain; and (iii) building upon existing legal authorities to enhance partnerships with domestic and international stakeholders that address small parcel shipments.

CBP Operations
Enhance and adapt all affected CBP operations to respond to emerging supply chain dynamics created by the rapid growth of e-commerce by (i) enabling risk-based enforcement to increase operational efficiency; (ii) determining highest risk e-commerce packages utilising a counter network approach including state-of-the-art techniques and technology; and (iii) optimising workforce, policies and procedures to adapt CBP to the evolving e-commerce environment.

CBP intends to increase its operational efficiency and effectiveness by using data analytics, data mining and an array of powerful analytical tools. The agency will also expand its existing advance electronic data pilot in the international mail environment to include additional foreign postal operators and will issue national guidance to better inform its personnel of e-commerce policy and standardise manifest data where feasible. Efforts will also focus on realigning staff, streamlining procedures for detention, seizure and abandonment, and evaluating existing user fee applications to assess their continued suitability.

Private Sector Compliance
Drive private sector compliance through enforcement resources and incentives by (i) strengthening e-commerce compliance through enforcement mechanisms, both civil and criminal; (ii) incentivising compliance through an e-commerce known shipper programme; and (iii) leveraging partner government agency networks to enhance enforcement procedures for e-commerce shipments. Among other things, CBP will explore ways to motivate compliance by e-commerce marketplaces, carriers, freight forwarders and customs brokers and will communicate with interagency partners on e-commerce threats and compliance, including risk segmentation, targeting and enforcement.

International Trade Standards
Facilitate international trade standards for e-commerce to support economic prosperity by (i) leading standards and best practices development with the interagency and international customs community; (ii) exploring technology options to increase the exchange of e-commerce information; and (iii) educating the e-commerce community to promote an understanding of applicable cross-border trade rights and responsibilities.

Among other things, CBP will continue to work with foreign customs administrations to create new policies that meet relevant international standards for e-commerce shipments. The agency also intends to continue to play a leadership role in the development of World Customs Organisation cross-border e-commerce standards. Additionally, to ensure the public has the most accurate information available CBP will develop a portal that contains a database and resource library on importers that the agency has vetted and deemed “trusted” and will allow the public to report potential trade violations. 

Performance Measures
CBP intends to measure the success of achieving its strategic e-commerce goals through internal, targeted performance measures. To do this, the agency will create a baseline for data, set key measurement targets and report on its progress.

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