On June 13, 2023 a bipartisan group of Senators on the Finance Committee released an open letter requesting input from the trade community on how to modernize U.S. customs laws to ensure the U.S. remains competitive in the global market. The letter highlights four specific topics on which they are seeking feedback: (1) improving trade facilitation, (2) enhancing key security programs, (3) balancing security/enforcement and trade facilitation, and (4) economic benefits from the suggested improvements for trade facilitation. Responses are due by July 11, 2023, and Congress will use the input to help inform its future deliberations.
The open letter follows a recent committee-level focus on modernizing customs and trade laws. In February 2023, the Senate Committee on Finance held a hearing on “Ending Trade that Cheats American Workers by Modernizing Trade Laws and Enforcement, Fighting Forced Labor, Eliminating Counterfeits, and Leveling the Playing Field.” Ahead of the hearing, Committee Chairman Ron Wyden (D-OR) released a statement saying: “This year, the Finance Committee will be working with CBP and others on how Congress can improve our trade laws and give CBP the tools it needs to meet this moment.” Ranking Member Mike Crapo (R-ID) noted that “modernizing U.S. customs laws is fast becoming of critical importance.” In May 2023, the House Ways and Means Subcommittee on Trade also held a hearing on “Modernizing Customs Policies to Protect American Workers and Secure Supply Chains.”
The request for input also comes over eighteen months after Senator Bill Cassidy (R-LA) released draft legislation entitled “Customs Modernization Act of 2021,” which would amend the Tariff Act of 1930 to:
- Clarify and modernize data submission, usage, and transmission requirements, including requiring the use of e-commerce platforms and electronically filed documentation;
- Expand the authority of CBP to demand certain records relating to trade enforcement and the importation of goods;
- Allow CBP to examine, share information about, and seize counterfeit or infringing goods;
- Strengthen CBP’s authority to prevent suspended and debarred actors from participating in the importer of record program; and,
- Provide for the streamlined disposition of detained de minimis imports.
The last major modification to U.S. customs laws occurred three decades ago with the passage of the Customs Modernization Act of 1993. Since then, U.S. Customs and Border Protection (CBP) reports that U.S. trade volumes have increased from $600 billion to over $2.7 trillion annually and import safety seizures have increased by 540%. To meet current challenges and prepare for future realities, CBP proposed “The 21st Century Customs Framework,” a joint government-industry approach to updating laws, policies, and processes impacting modern trade. The five pillars of the framework include: (1) enhanced facilitation, (2) seamless data sharing, (3) increased visibility & accountability, (4) timely and effective enforcement, and (5) secure funding. Senator Cassidy’s draft legislation aligns closely with CBP’s 21st Century Framework.
Husch Blackwell continues to monitor developments relating to customs modernization. In the meantime, for guidance or questions relating to U.S. customs laws, companies can contact Husch Blackwell’s International Trade and Supply Chain team.
Written with the assistance of Elizabeth Eickelberg, a summer associate in the Husch Blackwell LLP Milwaukee office.
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