New Executive Order Targets E-Commerce Shipments
05 February 2020
A new executive order issued on 31 January by President Trump aims to ensure a safer and more compliant e-commerce trading environment for U.S. consumers, businesses and government supply chains, although it is still unclear how this order will actually impact importers and foreign suppliers.
The EO claims that e-commerce is being exploited by traffickers to introduce contraband into the United States as well as by foreign exporters and U.S. importers to avoid applicable customs duties, taxes and fees. To deter this illegal behaviour, the EO instructs the U.S. Department of Homeland Security to propose specific criteria importers would have to meet to obtain an importer-of-record number. Such criteria must include a requirement that any person debarred or suspended by U.S. Customs and Border Protection for lack of present responsibility for reasons related to importation or trade be ineligible to obtain an importer-of-record number for the duration of such person’s suspension or debarment.
DHS is also required to take steps to ensure that, within 60 days of the publication in the System for Award Management by CBP of the name of any debarred or suspended person, express consignment operators, carriers, hub facilities and licenced customs brokers notify CBP of any attempt, of which they know or have reason to believe, by any persons who may not obtain an importer-of-record number based on any DHS criteria, to re-establish business activity requiring an importer-of-record number through a different name or address associated with the debarred or suspended person.
DHS must consider appropriate measures to ensure that express consignment operators, carriers, hub facilities and licenced customs brokers cease to facilitate business activity that requires an importer-of-record number by any person who may not obtain such a number. Depending on the criteria established, such consideration will include whether CBP may take any of the following measures: (i) limiting an express consignment operator’s, carrier’s or hub facility’s participation in any CBP trusted trader programmes; (ii) taking appropriate action with regard to an express consignment operator’s, carrier’s or hub facility’s operating privileges; or (iii) suspending or revoking a customs broker’s licence.
Moreover, the U.S. Postal Service has been instructed to collaborate with the U.S. State Department to notify the international postal network of the aforementioned U.S. government policies and provisions. USPS should make all reasonable efforts to include provisions regarding any criteria for participating in the importer-of-record programme established in any new contractual instruments it executes with international posts.
In consultation with USPS, DHS must submit a report to the president by 30 April on any appropriate measures the federal government could take, including negotiating with international posts, to prevent the importation or attempted importation into the United States through the international postal network of shipments containing goods, when such importation or attempted importation is known to have been facilitated by any person who may not obtain an importer-of-record number under any criteria established by DHS.
In consultation with the Office of the U.S. Trade Representative, DHS is required to develop an international mail non-compliance metric to formulate an overall compliance score for each international post. This score must take into account rates of trafficking of counterfeit goods, narcotics (including synthetic opioids such as fentanyl) and other contraband through a particular international post; the effectiveness of the international post in reducing such trafficking, including co-operation with CBP; and any other factors DHS determines advisable. DHS will update overall compliance scores on a quarterly basis, determine a minimum threshold compliance score for each quarter, and deem non-compliant any international post that scores below such threshold in that quarter.
Additionally, DHS will have to prioritise targeted inspection of imports into the United States from any international post that is deemed to be non-compliant for two or more consecutive quarters. Additional information may be required for any shipment from any international post that is deemed to be non-compliant for six or more consecutive quarters. Should the required additional information not be promptly provided, measures must be taken to prevent the importation of any such shipments into the United States. What’s more, DHS is required to take measures to protect the United States from shipments from any international post that is deemed to be non-compliant for eight or more consecutive quarters, including by preventing the importation of shipments dispatched from such posts regardless of whether any additional information is provided.
Lastly, DHS must submit a separate report by 28 August (i) analysing whether the fees collected by CBP are currently set at a sufficient level to reimburse the federal government’s costs associated with processing, inspecting and collecting duties, taxes and fees for parcels; and (ii) providing recommendations regarding any fee adjustments that are necessary to reimburse the federal government’s costs associated with processing, inspecting and collecting duties, taxes and fees for parcels.
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