Section 321 — What Belongs and What Doesn’t and How the Brokerage Industry Can Use this Provision MODERATOR: Mary Jo Muoio NCBFAA Customs Committee Chair PANELISTS: Vincent Iacopella Alan Klestadt Randy Mitchell Stuart Schimdt Alba Wheels Up International Inc. Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP NCBFAA Customs Counsel Director, Commercial Operations and Entry Division, Office of Trade, Trade Policy and Programs, CBP UPS Supply Chain Solutions

EVP of Growth and Strategy Section 321 What Belongs, What Doesn’t and How the Brokerage Industry Can Use this Provision Vincent Iacopella- EVP of Growth and Strategy

E Commerce is part of the present and the future Most internet based statistics have revealed that ecommerce sales grew by 14.6% in 2016. This marks the sixth consecutive year of nearly 15% in growth with more and more consumers turning to the internet to assist or complete transactions. HAFFA statistics tracking the size of this market in Shenzen estimate between 35,000-55,000 small package shipments take place each day.

E- Commerce is here to stay E- Commerce is here to stay. It is hard to put the toothpaste back in the tube, so customs brokers need to pivot.

U.S. Customs and Border Protection COAC Trade Modernization Subcommittee E-Commerce Working Group Definition Electronic Commerce or “E-Commerce”, involving transactions where parties buy and/or sell goods on-line, continues to create new opportunities for business, and is changing the way CBP has traditionally interacted with cross-border trade. Companies, organizations, and consumers of all sizes no longer transact exclusively through brick-and-mortar trade. E-Commerce continues to expand business models and supply chains via online sales, including business to business, business to consumer, and consumer to consumer transactions. With e-commerce expansion comes new opportunities, changes, and challenges in all modes of transportation.  “E-Commerce” consists of transactions where parties of any size buy and/or sell goods on-line, resulting in the cross-border movement of physical goods.  

What are the challenges? Can we continue to manage, move and customs clear the cargo we are handling now? Can we and our partners automate to accommodate possible new data elements for Sec 321 filings with a level playing field? What role do brokers play in a world where many transactions move to de minimus? How does CBP and trade protect both IPR circumvention in a rapidly expanding Sec 321 environment? How does CBP and trade protect and the American consumer from unsafe or counterfeit goods in a rapidly expanding Sec 321 space ? Who is/are the responsible party/parties for data regarding Sec 321 now? What is the role of ecommerce platforms that facilitate sales but do not buy or sell goods? Who is making the shipping decisions? Seller? Buyer? Other Entity?

How do we meet these challenges? Targeting in ACE is not a silver bullet, but it would help CBP and the trade meet these challenges

What are the opportunities? Can we open our companies up to new markets by filing Sec 321 in a level playing field.? New data elements can help CBP target Section 321 shipments better and brokers are the natural entity to play a part….as we have been doing for decades…better data, more data for targeting Additional data elements for shipments subject to PGA’s Revenue or other requirements can be targeted in ACE with the right data set, and the right automation ….broker is the natural filer. Automate in ACE. In B2B and B2C, broker often has a preexisting relationships with the IOR, retailer, seller, or on line platform

Leveling the Playing Field Raising all filers up to an acceptable data standard instead of lowering standard Sections 321 as customs business, yes or no? What about USPS? Additional data sets for Revenue and PGA de minimus? Yes Non Revenue and Non PGA shipments (bucket 1)…more data or not? Short term vs long term “fixes” and recommendations

-Thank you-