WHO WE ARE

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NATIONAL OPERATIONS

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Protecting the Border Is An Immense Job

Every day, 60,000 CBP employees protect nearly 7,000 miles of land border and 328 ports of entry.

…So Is Managing Our Massive Imports & Exports

In FY 2014, CBP processed $2.4 trillion in imports and $1.6 trillion in exports.

THREE PRONGED MISSION

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Centers of Excellence & Expertise

collaboration with the trade on streamlining our trade process is the

development of the Centers of Excellence and

February 2015

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Respond to the dynamic trade environment

Bring all of CBP expertise together on a single industry at the national level

Deliver greater consistency and harmonization

Align CBP processes with modern business practices

Enhance industry-based knowledge

Implement manage-by-account practices

Why Centers?

Intellectual Property Rights

Anti-Dumping Countervailing

Duties (ADCVD)Import Safety

Textiles

Revenue

Agriculture

Trade Agreements/Preference Programs

Trade Complexity

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What are Centers? Virtual organizations that leverage

technology to bring work to the Center

Coordinated from a strategic location

Aligned by key industry sectors

Bring existing expertise together to authoritatively facilitate trade

Provide a single point of processing for participating importers

Serve as resource to the broader trade community and to CBP’s U.S. government partners

CEE

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How Centers Operate

• ACME Apparel was importing into 60 Ports of Entry (POE), with 60 ports conducting reviews.

• Instead of 60 ports making decisions on ACME Apparel entries, they would now be reviewed by the Apparel, Footwear & Textiles Center of Excellence which is coordinated from San Francisco, CA.

Previously Center Operations

San Francisco Apparel,

Footwear & Textiles

Los Angeles Electronics

Laredo Machinery

Centers of Excellence and Expertise

Houston Petroleum,

Natural Gas & Minerals

Miami Agriculture &

Prepared Products

Atlanta Consumer Products &

Mass Merchandising

Chicago Base Metals

Detroit Automotive &

Aerospace

Buffalo Industrial &

Manufacturing Materials

New York Pharmaceuticals,

Health & Chemicals

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Action Benefits Eliminate unnecessary transactional work for compliant importers

• Fewer cargo delays • Reduced costs • Greater predictability

Shift focus at Ports of Entry to high-risk shipments

• More complex enforcement work for highly skilled CBP employees • Improved enforcement results:

Increased import safety Increased revenue protection Reduced economic loss to IPR theft

Provide Centralized Point of Contact for inquiries

• Improved relationship with CBP as small/medium-sized importers have a streamlined inquiry process for resolving concerns • Increased uniformity and transparency for the trade

Develop cross-functional expertise

• Environment for in-depth learning to increase CBP expertise and enhanced enforcement methods

Benefits of Centers

Expansion of Centers Operational Expansion Beyond Test Process for 3 Centers Electronics; Petroleum, Natural Gas & Minerals; Pharmaceuticals, Health

& Chemicals Provides for Full Test of Trade Processes Complete Roll Out Within 6-8 Months

Delegation Order Provides Center Directors Full Authority to Make Trade Decisions

Import Specialist Realignment

Expansion of 7 Centers under Center Test Staff Will Transition to Centers as Account Participation Increases Based

on Workload

For official use l

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Roll-Out Timeline and Location Accelerated Roll-Out Timeline

Field Office Phase I Jan-March Phase II April-June Phase III July-Sept

Elec Petro Pharma Elec Petro Pharma Elec Petro Pharma

Atlanta X X X

Baltimore X X X

Boston X X X

Buffalo X X X

Chicago X X X

Detroit X X X

El Paso X X X

Houston X X X

Laredo X X X

Los Angeles X X X

Miami X X X

New Orleans X X X

New York X X X

Portland X X X

San Diego X X X

San Francisco X X X

San Juan X X X

Seattle X X X

Tampa X X X

Tucson X X X

Total # of FO's 6 7 4 5 4 5 9 9 11

Phase I Ports Phase I Ports Phase I Ports

Electronics Center Director

Pharmaceutical, Health & Chemicals Center Director

Petroleum, Natural Gas & Minerals Center Director

Long Beach El Paso Seattle Los Angeles/LAX

New York Blaine

Chicago Newark Pembina Cleveland Chicago Great Falls Milwaukee Cleveland San Francisco Minneapolis Milwaukee Honolulu St. Louis Minneapolis Portland, OR San Francisco St. Louis Long Beach

Honolulu Atlanta Los Angeles/LAX Houston Charleston San Diego Dallas/Ft. Worth

Charlotte Nogales

Seattle Norfolk Phoenix Pembina El Paso Blaine Great Falls Portland, OR Anchorage

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Apparel, Footwear and Textile Center of Excellence and Expertise

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Apparel, Footwear and Textiles Import Highlights

$126.5 billion in footwear, textile, wearing apparel products come into the U.S. (5.5% of all imported value)

Top 5 countries of origin account for 66% of these imports China Vietnam India Mexico Indonesia

Over 64,000 entities import footwear, textiles and wearing apparel 378 entities are ISA (23.9% of imported value) 3,144 entities are C-TPAT partners (62.1% of imported value)

Apparel, Footwear & Textile Center of Excellence & Expertise

CEE Director Dora Murphy

Deputy Director Vacant

Assistant Director Enforcement

Branch Chief

Core Members: Import Specialist Senior Import Specialists Program Manager

Matrix Members: Asst. Port Director International Trade Specialists Operation Specialists Senior Import Specialists Import Specialist Supervisory Import Specialists Supervisory International Trade Specialist Auditor Field Analysis Specialist Supply Chain Security Specialists

Assistant Director Validation & Compliance

Vacant Assistant Director Partnership

Branch Chief Vacant

Core Members: Import Specialists Senior Import Specialists Entry Specialists Supervisory Entry Specialist National Account Managers

Matrix Members: Import Specialists Senior Import Specialists Supervisory Import Specialists National Import Specialist Asst. National Import Specialist

Branch Chief

Laboratories and Scientific Services Primary Center Technical Advisor

Alternate Center Technical Advisors HQ Science Officer

Branch Chief

ENFORCEMENT

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AFT CEE Enforcement

Enforcement activity can take place at time of entry or at post-release

• Intellectual Property • Free Trade Agreements • Revenue evasion • Transshipment

Some main areas of focus include, but are not limited to the following:

Enforcement actions involving participating accounts are coordinated with the Center prior to issuance.

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AFT Enforcement Focus on areas of risk

Intellectual Property Rights 38% of all FY 14 IPR seizures were wearing apparel/footwear/textile

related. Nearly 9,000 seizures with MSRP of $171 million in FY14.

AFT CEE Enforcement Operations The goal of the operations are

to facilitate legitimate trade

while enforcing the

laws and regulations

against violators.

In addition, operations focus on

protecting our participating

accounts from illegal

importing/exporting of their products.

The AFT CEE works with the participating accounts to

establish concepts/plans

for future operations.

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AFT CEE IPR Enforcement

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Conducted Multiple IPR Operations with Hundreds of

Seizures with total MSRP value over $17 million.

Participated in several National/Local IPR

Operations

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Textile Enforcement OPERATION SUPER FAKE

Intellectual Property Rights

Intercepted 700 shipments of counterfeit merchandise valued at $12 million as part of a Super Bowl XLIX focused operation

conducted on Jan. 26-29 at the DHL facility in Cincinnati.

IPR Recordation The AFT CEE recommends all registered Intellectual Property is recorded with CBP.

All product manuals with recorded trademarks can be submitted to CBP for inclusion in our internal Product ID Guide.

The IPR Product ID Guide allows all CBP personnel (e.g., Officers, Import Specialists, Entry Specialists, etc.) immediate access to the recorded trademarks.

The IPR Product ID Guide is only for CBP use and can not be viewed by outside stakeholders.

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AFT Enforcement Focus on areas of risk

Revenue Duty collected by CBP on footwear, textile and apparel goods still

accounts for approximately 45% of all duties The average duty rate for textile, apparel and footwear is 17% and

more than $17 billion of entered textiles and wearing apparel claim preferential tariff treatment, placing textiles and apparel at a high risk for non-compliance.

Misclassification and undervaluation are schemes to evade high duty rates on textiles and footwear

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AFT Enforcement Focus on areas of risk

Trade Agreements

17% of imported value claims preferential treatment False preferential claims undermine trade agreements

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Textile Enforcement Focus on areas of risk

Trade Agreements There are 14 Free Trade Agreements. Australia (AFTA); Bahrain

(BFTA); Chile (CFTA); Central America – Dominican Republic Free Trade Agreement (CAFTA); Israel (ILFTA); Jordan (JFTA); Morocco (MFTA); North American Free Trade Agreement (NAFTA); Oman (OFTA); Peru (PTPA); Singapore (SFTA); Korea (UKFTA): Colombia (CTPA); Panama (PATPA)

There are also several Special Trade Programs with various

countries, they are as follows: African Growth and Opportunity Act (AGOA); Caribbean Basin Trade Partnership Act (CBTPA); Caribbean Basin Economic Recovery Act (CBERA) and Generalized System of Preferences (GSP). Currently, GSP is expired.

CBP utilizes Textile Production Verification teams (TPVTs) to conduct on-site verification of foreign textile and wearing apparel manufacturers.

These teams review and verify production capability and compliance with the terms of FTAs and trade preference programs.

The TPVT visits help deter circumvention of the preference program requirements, as well as educate foreign governments and manufacturers.

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On-Site Verification

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Center and Industry Partners work collectively to define low-risk suppliers and

sharing trade intelligence to better define and segment high-risk suppliers.

The Center’s national approach is assisted through leveraging the Commercial Targeting and Analysis Center (CTAC) in Washington, DC. • Established in 2009, CTAC serves as CBP’s multi-agency

fusion center for targeting commercial shipments which pose a threat to health and safety.

• Nine (9) Federal agencies co-located : CPSC, EPA, DOT, DHS, USDA, FDA.

Effective Enforcement Targeting

Allegations

Allegations can be submitted by the trade directly through the e-Allegation (cbp.gov), a

Field Office, a Port of Entry or the designated CEE.

Within e-Allegations, the Report Trade Violations is to be used to report the following illegal trade activity: •Misclassification of imports •Country of Origin marking issues •Textile/Trade violations •IPR infringement •Export issues •Healthy and Safety Issues.

All allegations affecting a participating account are forwarded to the CEE.

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Way Forward

Expand number of Participating Accounts

Continue focus on: Streamlining entry summary and post entry summary processing Expediting cargo release Reducing paperwork

Expand bi-directional training CBP training for the AFT industry on key issues AFT industry training for CBP

PRECLASSIFICATION

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What Now? Apply to be part of the Centers of Excellence &

Expertise under the current Federal Register Notice

Contact:

Dora Murphy, Apparel, Footwear and Textiles Center Director San Francisco Field Office U.S. Customs and Border Protection Dora.Murphy@cbp.dhs.gov (415) 744-1530 x 233