By David Lawder
WASHINGTON (Reuters) – U.S. Customs and Border Protection’s trade enforcement chief is retiring on Friday and said the agency needs more resources to keep up with increasingly sophisticated efforts to evade U.S tariffs and forced labor restrictions.
Brenda Smith, executive assistant commissioner of CBP’s Office of Trade, told Reuters in an interview that CBP’s trade enforcement staff of just over 1,000 in fiscal 2020 is about the same as it was the customs agency was made part of the Department of Homeland Security in 2003.
Since then, U.S. imports policed by CBP have nearly doubled to $2.4 trillion, with a corresponding increase in illicit trade activity, Smith said.
“If we don’t get more investment, we have to prioritize some activities,” Smith said. “And I think having a really good understanding of what it takes to do forced labor investigations, for example, or to ensure effective anti-dumping and countervailing duties process is really important.”
While CBP has used technology such as data analytics to multiply its investigative abilities, better training is needed to keep up with complex money laundering and illicit trade schemes, she said.
“Having auditors, agents and attorneys that not only understand but can see ahead of that fraud requires a pretty sophisticated level of expertise,” she said.
XINJIANG FORCED LABOR BANS
Among the challenges the agency has been tasked with have been new U.S. import bans — known as Withhold Release Orders (WROs) — on all cotton and tomato products from China’s western Xinjiang region. The Trump administration charged those are produced with forced labor of detained Uighur Muslims.
Enforcing the ban is a vast undertaking, given that Xinjiang produces as much as 20% of the world’s cotton and the difficulty in disentangling this from complex global apparel supply chains. U.S. President Joe Biden’s administration and lawmakers from both parties also have made combating forced labor in China’s Xinjiang region a priority.
CBP detained 324 cargoes worth $55.5 million related to forced labor bans in fiscal 2020, up from 12 cargoes worth $1.2 million the year before.
Overall in fiscal 2020, CBP’s trade office collected $74.4 billion in duties and other revenue, up from $71.9 billion a year earlier despite a drop in imports due to the COVID-19 pandemic, according to CBP’s latest trade data https://www.cbp.gov/newsroom/stats/trade#.
Smith said the explosion of small-scale e-commerce shipments from individual small businesses abroad directly to U.S. consumers also has presented new challenges to an agency that for much of her career has been focused on processing and inspecting 40-foot cargo containers landing at ports.
The investigation processes are the same, but the returns can be far less, she said, boosting the case for upgrading the agency’s technology to take advantage of artificial intelligence and track new modes of cargo, such as autonomous vehicles.
CBP has proposed a unified customs data system for trade participants and more automated processes to speed trade flows as part of its “21st Century Customs Framework” proposal https://www.cbp.gov/sites/default/files/assets/documents/2020-Sep/21CCF%20Overview%20September_2020.pdf for the first major revamp of U.S. customs laws since 1993.
Smith, who is retiring after 34 years in government, including seven running the CBP trade office, said she has no immediate plans, but may work in the private trade sector.
A CBP spokesman said the trade office will be headed on an acting basis by John Leonard, CBP’s executive director of trade policy and programs.
(Reporting by David Lawder; Editing by David Gregorio)
