Even in a tumultuous year such as this 2020 has been, our efforts to update our Florida Congressional delegation have not stopped or slowed down. Below you will find details on our stance on particular issues that have the potential to greatly impact the customs brokerage and freight forwarding community.
The primary issues are:
- We urge Congress to support the Customs Business Fairness Act (H.R. 2261) in order to protect customs brokers from being negatively affected when an importer-client declares bankruptcy.
- We ask Congress to designate approximately $25 million towards the enhancement of the ACE Portal platform (this goes beyond previously-funded maintenance and upkeep).
- We believe Congress should continue to support groundbreaking infrastructure and safety investments but should implement a scaled approach for operators to meet more stringent liability insurance requirements.
- We request Congress continue to pass and support trade programs and remedies that promote and uphold free and fair trade.
I. SUPPORT BANKRUPTCY LAWS THAT DO NOT JEOPARDIZE THE CUSTOMS BROKERS’ LIVELIHOOD
Licensed customs brokers often advance duties/taxes or guarantee their payment on behalf of their importer-clients. Each year brokers serve as a conduit, remitting about $10 billion in duties and fees from importers. We urge Congress to support the Customs Business Fairness Act (H.R. 2261) that will protect brokers from incurring financial hardship by no longer requiring them to pay a trustee, monies received from, or advanced on behalf of, their importer-clients/debtors.
- When an importer-client files bankruptcy, the trustee or debtor may initiate action to recover payments made to/through the customs broker to CBP by the importer in the 90-day period prior to filing the bankruptcy petition. This “claw back” period is allowed under the Bankruptcy Code to avoid preferential treatment to any one creditor.
- If a customs broker could be subrogated to the priority rights of CBP, any payments from the importer to CBP via the customs broker during the 90-day period would no longer be subject to a preference payment recovery action.
- Congress should enact legislation that provides a technical amendment to Section 507(d) of the Bankruptcy Code that would allow subrogation for customs brokers or sureties who have paid duties to the government on behalf of a bankrupt importer. (H.R. 2261)
II. SECURE AND APPROPRIATE FUNDING FOR AUTOMATION THAT STREAMLINES TRADE PROCESSING
Over time, Congress has provided funding in excess of $3.5B to build the Automated Commercial Environment (ACE) and International Trade Data System (ITDS) to facilitate trade, but significant functionality remains to improve performance necessary to process cargo.
- While we appreciate Congress’ continued funding to maintain and sustain the ACE import and export system, about $25 million in additional funds are needed for the necessary development and enhancements vital to daily trade processing.
- Necessary enhancements include, but are not limited to: house bill of lading level manifest release, data size limitations, port diversion filings, release date updates, automated invoice manifest, protest capabilities, reconciliation corrections, paperless statement, etc.
III. SUPPORT SENSIBLE SURFACE TRANSPORTATION LEGISLATION WITHOUT UNREASONABLE INSURANCE COVERAGE
Reauthorization of the FAST Act via the Moving Forward Act (H.R. 2) including the provisions within the Investing in a New Vision for the Environment and Surface Transportation (INVEST) in America Act are critical to trade and logistics flows, but cannot include requirements that unduly burden trucking companies.
- While the Act includes provisions providing for increased funding for highway construction, funding for truck parking projects and provisions to limit excess detention time, a recent amendment to the bill would more than double the required amount of insurance coverage for truck owners from $750,000 to $2 million.
- This increase could put smaller-sized truckers out of business and have a tangible negative impact on the trucking industry throughout Florida without doing anything to improve highway safety.
- Small business truckers have been risking their personal well-being and struggling to stay in business due to low freight rates during the pandemic – now is the worst time to propose such an increase. A scaled increase would be much more manageable for businesses to implement and for customers to adjust to.
- Otherwise, we support the legislation and appreciate Congress’ continued support for infrastructure funding that is critical to keep Florida ports, bridges and highways maintained and funded to keep cargo moving.
IV. RENEW, REVISIT AND PASS TRADE PROGRAMS AND REMEDIES PROMOTING BOTH TRADE & DOMESTIC MANUFACTURE
International trade supports nearly 1.8 million, or one (1) in five (5), jobs in Florida. We urge Congress to renew and pass legislation supporting trade agreements, preference programs and trade remedies that will increase trade through Florida ports while complementing domestic manufacture to yield more high paying jobs.
- The lapse of the Generalized System of Preferences (GSP) on December 31, 2020 will cost U.S. companies approximately $2 million a day in tariffs. Congress must renew GSP now for a time period greater than the proposed sixteen (16) months to avoid retroactive refunds. GSP covers trade with over 120 of our trading partners effecting over 80,000 American jobs. (S. 4784)
- Congress also should revisit the Section 301 China tariff implementation and exclusion process, instructing the USTR to maintain exclusions past the December 31, 2020, expiration date. Legislation should also enable companies to petition for refunds covered by Section 301 exclusions that were previously time-barred due to protest limitations, which should not have applied in this context.