Digital Magazine: December 12, 2018

A nimble COAC keeps pace with rapid changes

Trade advisory to CBP’s new subcommittee structure offers more efficiency to tackling complex issues.

   For the past 30 years, U.S. Customs and Border Protection has relied on a select group of private-sector compliance specialists from among the nation’s top importers and related services providers to help shape cross-border trade policies and procedures that enhance national security while allowing for legitimate cargo facilitation.
   However, the rapid pace of change in which cross-border trade is now conducted has both the agency and industry scrambling to keep pace and necessitated a recent restructuring of CBP’s Commercial Customs Operations Advisory Committee (COAC).

A nimble COAC keeps pace with rapid changes

Trade advisory to CBP’s new subcommittee structure offers more efficiency to tackling complex issues.

A nimble COAC keeps pace with rapid changes

Trade advisory to CBP’s new subcommittee structure offers more efficiency to tackling complex issues.

 
COAC industry co-chairs are Lenny Feldman and Lisa Gelsomino.
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   For the past 30 years, U.S. Customs and Border Protection has relied on a select group of private-sector compliance specialists from among the nation’s top importers and related services providers to help shape cross-border trade policies and procedures that enhance national security while allowing for legitimate cargo facilitation.
   However, the rapid pace of change in which cross-border trade is now conducted has both the agency and industry scrambling to keep pace and necessitated a recent restructuring of CBP’s Commercial Customs Operations Advisory Committee (COAC).
   CBP has recognized the recent changes to trade, such as the rise in small package traffic due to flourishing e-commerce, since publishing its Vision and Strategy 2020 three years ago. The strategy’s aim is to enhance CBP’s ability to more efficiently respond to changes in trade, with COAC playing a key role.
   The 2020 strategy also provided a template for how CBP should best reorganize COAC’s subcommittee structure, which was announced at the Oct. 3 meeting in Washington, D.C.
   “On the restructuring, it was critical that we aligned [COAC’s] structure with our strategic initiatives, and those strategic priorities that were outlined by the commissioner and CBP leadership team,” said Valerie M. Neuhart, deputy director of CBP’s Office of Trade Relations, in a recent interview.
   The new COAC structure reduced the number of subcommittees from six to four. Three of the four new subcommittees each currently oversee four individual work groups.
   The Secure Trade Lanes Subcommittee includes the Petroleum Pipeline, In-Bond, CTPAT — Minimum Security Criteria and Trusted Trader work groups. The Intelligent Enforcement Subcommittee contains the Antidumping/Countervailing Duty, Bond, Forced Labor and Intellectual Property Rights work groups, and the Next Generation Facilitation Subcommittee covers the E-Commerce, Emerging Technologies, Regulatory Reform and Foreign Trade Zone Regulatory Reform work groups.
   “This is a COAC that’s now structured for CBP 2018 and moving forward under the guise of the trade strategy 2020 and the commissioner’s vision for what the CBP trade mission looks like and really, quite frankly, the challenges we’re going to be facing,” said Bradley Hayes, executive director of CBP’s Office of Trade Relations.
   COAC’s new Rapid Response Subcommittee was formed to handle special projects, of which at this time none have been assigned. These special projects may include, for example, addressing the regulatory impacts of new trade trends or legislation.
   “It allows us, if something pops up and needs quick action, to gather a group of subject matter experts from the industry to help us,” Hayes said. “And then, we’ll determine if a work group needs to be formed under one of the other subcommittees.”
   While COAC operates under the auspices of the Federal Advisory Committee Act, its importance to the nation’s overall trade facilitation and security was amplified by its codification statutorily in the 2015 Trade Facilitation and Trade Enforcement Act (TFTEA).
   “Formalizing this particular committee, I think, shows not only the importance of trade and industry stakeholder engagement, but also the importance of the CBP trade mission,” Hayes said.
   COAC consists of 20 industry members, who must apply and be vetted by CBP. These individuals, who hail from a spectrum of major importers, customs brokers, carriers, sureties and trade law firms, are assigned as chairs to the subcommittees and various work groups. They can be appointed to serve up to two three-year terms. For the 15th COAC, there were 13 members serving their second terms. The agency generally receives more than 100 applications for the available COAC seats.
   From the industry side, the current COAC term is co-chaired by Lenny Feldman of the international trade law firm Sandler, Travis & Rosenberg and Lisa Gelsomino, president and CEO of Avalon Risk Management.
   “It’s time-consuming but rewarding,” Feldman said. “You really are able to converse with CBP executives about strategy. You can have a meaningful impact on regulations and policy.”
   Feldman, who is serving his second term on the COAC, worked as an attorney for CBP’s Office of Regulations and Rulings from 1991 to 2000 before entering the private sector. At Sandler, Travis & Rosenberg, he remained active on customs compliance matters, as well as participated in various COAC work groups over the years prior to his appointment to COAC.
   Similarly, Gelsomino, who also is serving a second term, became engaged with COAC as part of a work group in 2008, and her involvement increased from there. She has more than 25 years of experience in the industry, and her company is a leading provider of customs bonds and other insurance services for the international trade and logistics industry.
   Both Feldman and Gelsomino said they were favored by their peers to serve as COAC co-chairs due to their industry-neutral roles during a time of great change and new regulatory demands in global trade.
   The other committee members currently include Cynthia Allen, vice president of regulatory affairs and compliance for FedEx Trade Networks; Brenda Barnes, export manager at Geo. S. Bush & Co.; Luisella Basso, vice president of international trade and compliance for Pitney Bowes; Barry Baxter, senior director of customs compliance for Walmart; Heidi Bray, manager of U.S. and global customs compliance for FCA US; Celeste Catano, global product manager for customs management at BluJay Solutions; Jose D. Gonzalez, senior adviser to the Laredo Licensed U.S. Customs Brokers Association; Alexandra Latham, director of customs compliance for Costco Wholesale Corp.; Amy Magnus, director of customs affairs and compliance for A.N. Deringer; Jody Swentik, director of global logistics and trade compliance at Briggs & Stratton; Madeleine Veigel, director of customs for the Americas at Expeditors International of Washington; Kate Weiner, director of North America customs for Cargill; Brian White, director of global logistics and trade compliance at The J.M. Smucker Co.; Michael White, president of Cargo Network Services; Kathy Wilkins, vice president of Alliance Operating Services; and Michael Young, vice president of business process and system at OOCL.
   “COAC gives an industry a voice into the agency,” Neuhart said. “Giving them that opportunity to vocalize and share with CBP, it impacts the potential policy or legislation on industry and is invaluable to us.”
   However, it’s not uncommon for COAC members to withdraw their participation during a term due to unforeseen circumstances, such as corporate budget cuts, job transfers and personal reasons.
   “We’re asking a lot of these people,” Hayes said. “We’re asking for their companies to support travel, support them coming to public meetings, taking part in work groups and calls. ... So we’re asking them to some extent to be on call.”
   He added, “There’s a whole bunch of work that goes on behind the scenes to get us to the recommendations that are proffered in the public meetings.”
   To remedy the possibility of committee member drop-offs, COAC added for the first time this term four “alternates” to the roster. These individuals are vetted similarly to other committee members and participate in the COAC meetings and various work groups. However, they don’t vote on the committee’s recommendations to CBP.
   This COAC term’s alternates include Warren Hastings, head of global trade and supply chain deployment strategy at Cardinal Health; Amy E. Smith, head of U.S. customs and trade compliance for DHL Express; John Van Wallaghen, vice president of public affairs at UPS; and Erika Vidal-Faulkenberry, head of global customs and trade organization for Hershey.
   Most COAC members have spent many years engaged in the various work groups and some of them previously worked at CBP before entering the private sector.
   “I’ve known the senior people at Customs involved with COAC for years,” Feldman said. “The COAC meetings are a bit like coming home. We feel very comfortable with each other.”
   Former COAC members also tend to stay involved with the committee’s work groups long after their terms expire. “They know that through the work group process, once they’re no longer an official [COAC] member, their voice is still heard, and they’re going to continue,” Hayes said.
   COAC currently has on its agenda “a lot of big-ticket items that need some resolution and some work,” Hayes said.
   “One thing that’s for certain is that their input is invaluable to CBP overall,” Neuhart said. “You have initiatives like the Centers of Excellence and Expertise that were born out of a COAC recommendation, and so we have others that are in the works like that, that we would hope come to that type of fruition.”
   COAC recently presented recommendations to CBP for updating the country’s foreign trade zone regulations and the Customs Trade Partnership Against Terrorism program. Ongoing work for the COAC includes intellectual property rights enforcement, in-bond management, forced labor concerns and the prevention of antidumping and countervailing duty evasion.
   CBP’s oversight of ballooning cross-border e-commerce traffic, which has been exacerbated by the increase in the de minimis amount per package from $200 to $800, has become a dominant issue for COAC.
   Another new technical area for COAC is advising CBP on how to keep the Automated Commercial Environment (ACE) operating smoothly and addressing the barrage of new technologies impacting global trade, including blockchain and bitcoin. The agency recently completed a blockchain proof of concept and is evaluating the results.
   There also are new challenges resulting from CBP regulatory rewrites, which are driven in part by the agency’s goal toward continued modernization and new trade agreements.
   Feldman said it’s now more important than ever for COAC to consider the wider industry needs, including those of small and midsize enterprises, when developing future recommendations for CBP.
   “We need to try to make COAC a grassroots organization and establish channels so that we’re able to receive more input from trade associations and round tables,” he said. “It should be the people’s COAC, not an ivory tower COAC.”
   COAC’s next meeting will be held in Herndon, Va., on Dec. 5. The meetings are open to the public, either in person or via webinar. For more details, access the meeting announcement.
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