Since 2008, consumer product manufacturers and importers have been required by law to certify that their products meet applicable safety standards. The CPSC now proposes to require the electronic filing of those certificates with Customs and Border Protection (CBP) prior to import and to expand the information that must be included on the certificates. At a workshop two weeks ago, the agency explained its proposal and heard from various stakeholders about the impact of its proposal.
The workshop certainly gave participants much substantive information. But it also left the distinct impression that there is much misunderstanding of the proposal among the various parties, much misinformation within the agency about many aspects of the import process, and much back-to-the-drawing-board analysis that needs to be done before this proposal goes live.
The session started with the agency explaining the need for the proposal. While the agency did not exactly say, “we are from the government and we are here to help you,” the agency did say that the intent of the proposal was to facilitate trade and make the import process more efficient as the agency carries out its regulatory function.
The agency then heard from importers who told it in some detail how its proposal grossly underestimated the numbers of certificates that would need to be processed and the burden and costs of complying. They questioned the need to change a system that was working now to target unsafe cargo and criticized the lack of flexibility in the proposed system. Common carriers and custom brokers noted that they had no way of efficiently taking on the burden of filing certificates since they had no knowledge of applicable regulations or products.
Several other government agencies that have certification programs discussed their experiences but it was obvious that those programs are of a narrower scope or not apposite to what is being proposed by the CPSC. The CBP asserted, in spite of what stakeholders had earlier said about CBP’s capabilities, that it was ready to handle the data that would be coming in from the electronic filing of certificates, although, should those certificates come in PDF form, that might cause a hiccup.
Finally at the end of the presentations, several pragmatists from the audience suggested that the agency rethink its objectives, giving concrete suggestions for simplifying the approach the agency was taking. The meeting concluded with vague suggestions of a pilot program sometime in the future.
What the agency did not address at the workshop was how this proposal relates to its current budget request to Congress for millions of dollars to expand its risk assessment methodology (RAM) project to cover all imports under its jurisdiction and its proposal to charge importers user fees to pay the down-stream costs of this expansion. Obviously electronic filing of certificates is a required first step before the expanded RAM and user fees can be put into place.
It may be that expansion of the RAM to assess the risk of all imports in the way the agency proposes makes sense. Or it may be that an expansion can be better accomplished, if it needs to be done, by a staged process. Perhaps user fees assessed against importers to pay for the system is the fairest way to assure that those whose products are subject to the system pay for it. On the other hand, virtually everyone imports these days so user fees have a taxation aspect to them that needs to be considered. These are all questions that the agency has not asked stakeholders. Instead they will be debated through the appropriations process in the Congress. Rather than the agency first trying to educate and then get consensus on important policy issues, real potential for divisive debate now exists.
Would not the agency have been wise to tee up some of these important issues for discussion as well? Many people asked why the agency wants to change a system that seems to be working well. They deserve the full answer.