Panel 2: Global Customs Modernization Policy Panel

Key take-aways (Global Customs Modernization Policy Panel)

• Data is the new compliance currency. FDA, Census, CBP and BIS are all redesigning their programs around earlier, richer and better-structured data—whether it is FDA’s National Entry Review (NER) inbox, Census’ revamped AES and USA Trade Online tools, or BIS’ reliance on AES filings for export-control enforcement.
• “Single port contacts” are going away. Beginning 4 August 2025 the FDA will centralize all entry targeting by commodity, not by port, replacing local entry reviewers with a national NER email hub. Brokers and importers must update escalation trees now.
• Census’ “cleanup rule” is imminent. Expected “this summer,” it fixes URLs and grammar but also clarifies who files exports after in-transit warehousing, tightens Foreign-Trade-Zone code validation (fatal errors by July), and starts phasing out the duplicative “state of origin” vs. “USPPI state” fields.
• Export-control policy has become a bargaining chip in wider trade talks. BIS restrictions on advanced semiconductors, AI chips and critical materials are now explicitly linked to negotiations with China, the UK and others; expect rapid, deal-driven rule changes.
• Forced-labor and origin-risk enforcement did not disappear when tariff headlines arrived. CBP is hiring auditors and publicising fraud cases; trans-shipment through Canada or misclassification to dodge Section 301/232 duties is squarely in the agency’s sights.
• Technology interoperability—and AI in particular—is the only scalable answer to soaring data volumes and dwindling head-counts. Panelists urged investment in shared data standards, API-driven analytics and forensic origin-verification tools.
• Prepare for a compliance talent crunch. Government agencies are adding investigators while private firms struggle to recruit digital-savvy trade specialists; mentorship and up-skilling programmes are now core risk-mitigation strategies.

FDA’s national entry reboot

Seaborn walked through a decade-long effort to pull FDA targeting out of scattered port units and into commodity-focused national teams. Key impacts for trade:

• National Entry Review (NER) inbox starts 4 Aug. Brokers will route all queries through a single email, not local reviewers.
• Commodity “satellites.” Dedicated national teams will own every entry line for “their” products—promising consistency in product-code, documentation and hold decisions.
• Resource reality. Import lines keep climbing while staffing lags; automation, data dashboards and ACE 2.0 pilots (GBI, SVIP) must close the gap.

Short-term action items:

1. Update broker SOPs with the NER contact.
2. Scrub FDA product-code tables—“more art than science” becomes less tolerable once one team sees every line.
3. Map tobacco and ENDS products: FDA’s “burgundy slice” of refusals is growing and will be a 2026 enforcement hotspot.

Census’ data hygiene & transparency push

Wooden framed Census as “the largest federal statistical agency, but also your silent compliance partner.” Highlights:

• Cleanup rule (summer 2025): grammatical fixes, clearer USPPI duties on in-transit exports, and stricter FTZ code validation (fatal errors as early as July).
• Country-of-origin gap. Census wants original origin on re-exports; linking entry numbers proved thorny, so a new AES field is on the table. Watch for outreach surveys.
• Duplicate state fields. Until one is removed, USPPI-state must equal state-of-origin or filers will keep getting compliance alert 26C.
• Modern data delivery. A redesigned USA Trade Online and a self-serve public API will give analysts near-real-time trade flows without CSV gymnastics.

Tariff turbulence & ethical engineering

Speaking in a private-sector capacity, the former CBP executive warned that tariff-rate shocks (50 % Section 232, new 301 vessel fees, etc.) are reviving aggressive supply-chain manoeuvres:

• Trans-shipment temptation. Canada is a major hub; rerouting Chinese goods, relabelling them as USMCA and claiming preferential duty is outright fraud.
• Fake price cuts. Long-stable $100 widgets suddenly invoiced at $50 will not withstand audit when wire-payments reveal side agreements.
• Misclassification games. Re-classifying merely to escape tariff headings invites False Claims Act exposure.
• Forced-labor enforcement remains relentless. New FTAs all embed UFLPA-style clauses; CBP is expanding auditor ranks and signalling criminal consequences on LinkedIn.

Her guidance: treat transparency and traceability tech (from AI graph platforms to forensic fibre testing) as insurance policies, not optional extras.

Export controls inside trade deals

Borman distilled BIS’s evolving posture:

• National-security controls are no longer siloed. Semiconductor and AI-chip rules are bargaining chips in broader tariff talks; modifications hinge on China honouring rare-earth commitments.
• Huawei Ascend precedent. BIS declared the chip’s production unlawful; any service, spare part or software that “touches” data centres running Ascend may itself violate the EAR.
• Private licence directives. Beyond regulations, BIS now issues binding letters to specific firms (e.g., EDA software), signalling nimble rule-making by memo.
• Section 232 import probes. Seven are open; semiconductors, aerospace and critical minerals reports could reach the President in July, triggering tariffs within 90 days.
• Enforcement ramp-up. The FY-26 budget requests a surge in BIS agents. AES records are Exhibit A in prosecutions; filers mis-flagging “NLR” to embargoed Cuba learned this the gentle way—next time will bring penalties.

Practical compliance roadmap

1. Centralise data governance. Pull ACE, AES, product master data and supplier attestations into a shared lake; reconcile codes before regulators do.
2. Automate red-flag detection. Use AI to surface valuation anomalies (too-sudden price drops), routing detours (risk ports, FTZ dwell time) and denied-party drift.
3. Refresh SOPs for FDA NER & Census fatal errors. Include new email addresses, FTZ-code validation, and contingency plans for August pilot glitches.
4. Audit export-control touchpoints. Map where your gear, software or services intersect with Chinese data-centre operators or AI labs; obtain end-use certs and document your screening logic.
5. Mentor and hire. Pair veteran brokers with data scientists; develop in-house talent before the government and competitors absorb the shrinking labour pool.

Outlook: modernisation under pressure

All five agencies are racing to modernise on tight budgets while political demands multiply. The panel’s unspoken consensus: only high-fidelity data, interoperable tech and cross-trained people can square that circle.

Firms that invest early will not only dodge penalties—they will gain speed, predictability and bargaining power in an era where tariffs, quotas, forced-labor bans and export controls can shift with a single press release.