1. U.S. Consumer Product Safety Commission 1 This presentation was prepared by CPSC staff, has not been reviewed or approved by, and may not reflect the views of, the Commission. CPSC Staff Workshop on Electronic Filing of Certificates as Included in Proposed Rule on Certificates of Compliance September 18, 2014

2.  For those of you in the room, please mute electronics and phones.  For those of you watching on the web, you can email questions for the speakers to: efiling@cpsc.gov. efiling@cpsc.gov  The transcript for today’s workshop will be added to the docket at: www.regulations.gov Docket number: CPSC–2013–0017 www.regulations.gov  The PowerPoint presentations will also be available at: http://www.slideshare.net/USCPSC http://www.slideshare.net/USCPSC

3. John Blachère 7/31/20163 This presentation has not been reviewed or approved by the Commission and may not reflect its views

4. Presentation Acronyms HTSUS – Harmonized Tariff Schedule specific to the United States ITDS – International Trade Data System CBP – U.S. Customs and Border Protection 7/31/20164

5. Certificates – Current CPSA section 17(a)(2) - requires the Commission to refuse admission for regulated products not accompanied by a certificate CPSA section 14(a)(2) – requires testing and certification before importation CPSA section 14(g)(3) – requires certificates to accompany the product or shipment of products, as well as be provided to CPSC and CBP upon request. 7/31/2016 5

6. Existing 1110 Rule Paper or electronic certificates (URL typically on the product, container, or invoice) Electronic certificates must be created before importation Available to CPSC and CBP as soon as the product or shipment itself is available for inspection. In practice, Certificates: Obtained and reviewed at the time of entry through broker or importer which may take time to present and may delay release No ability to assess industry compliance with requirement 7/31/2016 6

7. Certificates - Proposed Proposed rule (proposed 16 CFR §1110.13) – certificates for imported products must be filed electronically with CBP at the time of filing the CBP entry or at the time of filing the entry and entry summary, if both are filed together. Aligns with Executive Order 13659: “Streamlining the Export/Import Process for America's Businesses” Entering required data elements for certificates at the time of entry would allow the agency to Electronically review and facilitate release Prioritize examinations with certificate data at entry 7/31/2016 7

8. Risk Assessment Methodology (RAM) CPSA Section 17(h)(1) Requires CPSC to: Establish and maintain a permanent product surveillance program, in cooperation with other federal agencies, to carry out the Commission’s responsibilities and to prevent the entry of unsafe consumer products into the commerce of the United States. CPSIA Section 222(a) Requires CPSC to: Develop a Risk Assessment Methodology (RAM) that identifies shipments of consumer products that are (1) intended for import into the United States; and (2) likely to include consumer products in violation of Section 17(a) of the CPSA (15 USC 2066(a)) or other import provisions enforced by the Commission. 7/31/20168

9. Risk Assessment Methodology (RAM) CPSIA Section 222(b) requires CPSC RAM development to: Use CBP’s ITDS insofar as practicable, Incorporate the RAM into CPSC’s IT modernization plan, and Examine how to share information with CBP for the purpose of identifying risky shipments. 7/31/20169

10. Total Risk Management at Import Monitoring Shipment activity by product, entity, and port/region Violation history/risk by product, entity, and port/region Address risk in product areas and entities at import. Examples: Limited complexity: ATVs High complexity: Toys 7/31/201610

11. Risk Assessment Program Components Intergovernmental Memoranda of Understanding and agreements Collocated personnel with CBP Integration with CBP data systems - pilot system Other improvement projects Product coding Internal case and process monitoring 7/31/201611

12. Risk Assessment Program Components Intergovernmental Memoranda of Understanding and agreements Collocated personnel with CBP Integration with CBP data systems - pilot system Other improvement projects Product coding Internal case and process monitoring 7/31/201612 1

13. Risk Assessment Program Components Intergovernmental Memoranda of Understanding and agreements Collocated personnel with CBP Integration with CBP data systems - pilot system Other improvement projects Product coding Internal case and process monitoring 7/31/2016 13 2

14. Collocated Staff Works cooperatively at ports to target and screen shipments Chemical analysis – XRF and FT-IR Mechanical analysis – Use/abuse and physical assessment Document verification – Certification and tracking labels 7/31/2016 14

15. Risk Assessment Program Components Intergovernmental Memoranda of Understanding and agreements Collocated personnel with CBP Integration with CBP data systems - pilot system Other improvement projects Product coding Internal case and process monitoring 7/31/2016 15 3

16. Pilot System (ITDS/RAM) Integrates available risk information to model and support Commission enforcement strategy involving product hazards at importation Potential sources of risk data include: Shipment (CBP) Case history (CPSC & CBP) Examination history (CPSC) Injury and death (CPSC) Commercial information (Third Party) 7/31/2016 14

17. Pilot System Functions Statistical modeling to assist in the prioritization of projects and operations Risk-based standard reporting for product managers to know importation patterns Graphical User Interface to manage screening and exams at ports of entry Systematic assessment methodology to review and prioritize all shipments of potential interest to CPSC 7/31/2016 15

18. 7/31/2016 18 CPSC-CBP Data Synchronization

19. 7/31/2016 19 CPSC-CBP Data Synchronization

20. 7/31/2016 20 CPSC-CBP Data Synchronization

21. 7/31/2016 21 CPSC-CBP Data Synchronization

22. 7/31/2016 22 CPSC-CBP Data Synchronization

23. Risk Assessment Program Components Intergovernmental Memoranda of Understanding and agreements Collocated personnel with CBP Integration with CBP data systems - pilot system Other improvement projects Product coding Internal case and process monitoring 7/31/2016 23 4

24. HTSUS Reclassification Work with the U.S. International Trade Commission on the reclassification of some product areas to support regulation enforcement and defect identification Completed once for the January 1, 2011 mapping Toys ATVs Children’s Durable Products Drywall Second set under review 7/31/2016 24

25. Modernizing Certificate Collection Will: Reduce the shipments reviewed that are compliant or out of scope Reduce the time spent per shipment to verify compliance with our laws Improve the rate of discovery of hazardous/violative products per staff month Provide a single, reliable store of certificate data 7/31/201625

26. John Blachère 7/31/201626 This presentation has not been reviewed or approved by the Commission and may not reflect its views

27. Single Window and Automated Commercial Environment (ACE) Brenda Smith ACE Business Office CPSC Workshop on Electronic Filing of Certificates at Entry September 18, 2014

28. 28

29. Single Window Authorization and Support  Executive Order signed February 19, 2014 – Streamlining the Export / Import Process for America’s Businesses  Directs 47 U.S. Federal agencies with a role in trade to be ready to participate in the electronic “Single Window” by December 2016  Expands scope of the Border Interagency Executive Council (BIEC) to all agencies with a border interest  ITDS Board of Directors provides executive leadership and direction, and works with PGAs on automation  ACE Executive Steering Committee (DHS and CBP executives) provides oversight and guidance to the ACE Program to ensure successful development and operation 29

30. IT Foundation for the Single Window ACE will automate trade processing and data collection for 47 federal agencies Increased USDA food seizures 30-fold Automated processes saving CBP $46M/year Enhances agency enforcement missions through trade targeting and risk segmentation Reduces U.S. supply chain transaction costs Streamlines interagency processing through collaboration and less paperwork Strengthens the global supply chain to protect U.S. interests and enhance prosperity Supports U.S. manufacturing growth by facilitating exports National Export Initiative Single Window Security and Safety One U.S. Government at the Border U.S. Economic Competitiveness Global Supply Chain Strategy Automated Commercial Environment 33% faster truck processing Up to 76% duties/fees paid interest free via ACE Nine agencies receiving automated data via ACE Pre-arrival data linked and available in ACE Participating ocean carriers saving $900K/year in reduced courier costs 30

31. Three enablers provide the means for Partner Government Agencies (PGAs) to participate in ITDS/ACE  Partner Government Agency (PGA) Message Set - Establishes a single, harmonized set of information to be collected electronically from international traders by CBP on behalf of PGAs  Interoperability Web Services - Provides a system-to-system pipeline for data transfer between CBP and PGAs  Document Image System (DIS) - Allows trade members to supply images of needed documents electronically during the cargo import and export processes Implementing the Single Window The ACE portal provides PGAs with a graphical user interface (GUI) to view the data in ACE, search on that data and run reports. The ACE portal is a consistent interface across PGAs that differs only by their particular information and processing needs. 31

32. 32 PGA Integration Status PGAs CPSC is among the nine agencies using IWS capabilities

33. PGA Message Set Processing Benefits  Today, PGA data is submitted manually via paper forms, requiring human intervention and manual correlation with transactions  PGA Message Set extends existing CATAIR message set to allow submission of PGA data electronically to CBP along with entry and entry summary filings  The Single Window will streamline transmission, processing and distribution of PGA data, yielding significant cost savings and efficiency:  Trade and multiple government agencies will no longer exchange information via multitude channels during the cargo release process  Data will be available to agencies more quickly, allowing for better identification of dangerous or prohibited shipments  Automated PGA interactions reduce paper and enable near-real time decision making by Government authorities  Single Window makes it easier for industry to comply with government regulations and reduces costs for Government and industry 33

34. PGA Onboarding Process 47 PGAs to be on-boarded in three phases, beginning with PGAs with Cargo Release responsibilities  Phase I – Initial capabilities deployed to 10 agencies by April 30, 2014  Phase II – Advanced capabilities deployed to 13 agencies by July 4, 2015  Phase III – Advanced capabilities deployed to remaining agencies by July 1, 2016 34

35.  IWS enabled October 2011  CPSC receiving production entry and entry summary data directly from CBP  CPSC upgraded to advanced Event Exchange capability in IWS on September 10, 2014  CBP and CPSC are engaged in on-going discussions to plan for exchange of forms via DIS to supplement the admissibility review process  Planning to be DIS capable with July 4, 2015 ACE deployment 35 CPSC Connectivity Status

36. DateMandatory RequirementTime Remaining May 1, 2015Mandatory use of ACE for electronic import and export manifest filings 8 months November 1, 2015Mandatory use of ACE for electronic Cargo Release and related Entry Summary filings 14 months October 1, 2016Mandatory use of ACE for all remaining portions of the CBP cargo process 25 months 36 Mandatory Dates for Transition to ACE

37. 37 Questions? Visit http://cbp.gov/ace http://cbp.gov/ace Or e-mail us at: ASKACE@cbp.dhs.govASKACE@cbp.dhs.gov

38. PGA Data Processing: Architecture 38

40. Food Safety and Inspection Service Food Safety and Inspection Service Pilot for PGA Message Set Bob Berczik International Relations and Strategic Planning Staff Office of Public Policy and Program Development Food Safety and Inspection Service, USDA 40

41. Food Safety and Inspection Service: Mission in Action We are the public health agency in the USDA responsible for ensuring that meat, poultry, and processed egg products are safe, wholesome, and accurately labeled. Federal Meat Inspection Act (FMIA), 1906 Agricultural Marketing Act (AMA), 1946 Poultry Products Inspection Act (PPIA), 1957 Humane Methods of Slaughter Act (HMSA), 1958 Egg Products Inspection Act (EPIA), 1970 Our Authority Through a series of Acts, Congress empowers FSIS to inspect all meat, poultry, and processed egg products in interstate commerce. 41

42. Public Health Information System (PHIS) o Designed to collect, consolidate, and analyze data derived from both domestic inspection and foreign country inspection systems o Centralized computer database that generates random import inspection tasks and stores inspection results, based on: Exporting country, process category, species, performance o Interconnected with US Customs and Border Protection’s (CBP) Automated Commercial Environment (ACE) o Pre-populates shipment data received from industry, enhancing controls and reducing fraud PHIS connection to ACE Partner Government Agency (PGA) Message Set  PGA Message Set Pilot underway with two brokers making entries at three POEs with nationwide implementation to follow o GOAL: to streamline the Customs entry process and transition away from paper – based application process for FSIS import inspection 42

43. PHIS o Enables interface with U.S. Customs and Border Protection’s Automated Commercial Environment (ACE) system Business-to-government exchange of shipment data Provides FSIS Advance Notice when Customs entry filed Replaces paper application for inspection (Form 9540-1)  Uses existing data collected by CBP  Incorporates FSIS specific data into the CBP standard data set (UN/CEFACT and WCO compliant) 43

44. o Importers are required to apply for FSIS import inspection for all entries of meat, poultry, and egg products o An Entry or Entry Summary Certified for cargo release in ACE, combined with the PGA Message Set, will eliminate the need for paper applications An electronic FSIS Form 9540-1 will expedite the clearance process on regulated shipments FSIS Import Application (FSIS Form 9540-1) 44

45. o Electronic import application in PHIS retrieves data from ACE PGA Message Set data completes the data fields missing from the FSIS import application o For example Broker information provides local broker first name*, last name*, phone number,* email address* or fax number o *Data fields are required in PHIS import application PHIS utilizes information to exchange electronic messages between FSIS and Trade Current Partial Data Feed 45

46. Data Complete with Message Set PG19 CB PG21 LOCAL BROKER CONTACT INFORMATION – FIRST NAME AND LAST NAME, LOCAL PHONE NUMBER, AND E MAIL ADDRESS – MARTHA STEWART 313-666- 7777 JAS2@hotmail.com PG21 LOCAL BROKER FAX NUMBER IS 313-666-7771 46

47. FSIS Data Grouping The PGA Message Set accommodates the following “many-to-one” data relationships: o Many inspection certificates to one entry The PG 50 and 51 start and end the groupings Multiple PG 14 (inspection certificates) may relate to the PG 13 (the foreign government that issued the certificate) o Many lots within one inspection certificate The PG 50 and 51 start and end the groupings Multiple data lines providing specific lot information are related to the PG 14 (inspection certificate) 47

48. Foreign Inspection Certificates o FSIS requires all imported meat, poultry and egg products to be properly certified by the competent authority in the exporting foreign country o The electronic import application in PHIS uses a combination of information supplied in part from Trade and from the foreign inspection certificate Currently PHIS receives official certification data electronically from Australia, New Zealand, and the Netherlands* For shipments certified electronically, when importers/brokers identify the inspection certificate number through the PGA Message Set, FSIS PHIS will populate the import application based on the eCert data o Filers making entries from countries that do not certify shipments electronically must provide additional PGA Message Set data identifying product attributes *Note: FSIS will develop the capability to exchange official certification data electronically with other foreign governments 48

49. FSIS Message Set Pilot o The FSIS PGA Message Set Pilot began on April 27, 2014 o FSIS pilot has two Customs brokers actively participating: A.N. Deringer, Broker Filer, Code 551 Barthco International Inc. dba OHL International, Broker Filer Code OHL Customs brokers participating in the pilot have the option to file entries with or without the complete message set data elements o Pilot entries are at three ports of entry: Champlain, NY, Port Code 0712 Philadelphia, PA, Port Code 1101 Houston, TX Port, Code 5301 49

50. FSIS Message Set Pilot o From April 27, 2014 through September 4, 2014, the two participating brokers in the FSIS pilot have submitted a combined 109 entries through ACE utilizing the PGA message set representing 4.5 million pounds of product under FSIS jurisdiction o Entries filed are for product from Canada, Australia and New Zealand o Product from Australia and New Zealand are interfacing with government-to- government inspection certificate data exchange (eCert) 50

51. FSIS Message Set Pilot o 87% of the pilot entries had no identified issues o 13% of the pilot entries to date had identified issues o Types of issues encountered: o Data mapping both internal to FSIS and external to filer software use o HTS conflict (1 entry) Note: No identified issues delayed shipment movement or reinspection of product by FSIS. No data transfer issues from ACE to FSIS have been identified. 51

52. FSIS Message Set Pilot (software validations) o Automation of eCert pre-population of the application based on the PG14 record from the filer 42 entries submitted validated the success of eCert filings from Australia and New Zealand systems. o Multiple inspection certificates (PG14) identified on a single entry 6 entries submitted with multiple certificate numbers and PHIS created separate applications based on the PG14 records as expected o Increase shipment monitoring capabilities to prevent Failure to Present (FTP) PG 30 record facilitates FSIS monitoring o Elimination of FSIS import inspectors to manually enter application data increases efficiency of reinspection process 52

53. References o Data Samples and Guidelines for Using the PGA Message Set for Electronic Completion of the U.S. Department of Agriculture (USDA), Food Safety Inspection Service (FSIS) Application for Import Inspection (FSIS Form 9540-1) http://www.fsis.usda.gov/wps/wcm/connect/98c45f3c-8a5b-47d7-9907- 2fdc7352547f/Data_Samples_Guidelines_PGA_Message_Set.pdf?MOD= AJPERES&CACHEID=44196b9d-4fc1-45e0-a1de-eb3701385366 o Public Health Information System (PHIS) – Import Component http://www.fsis.usda.gov/wps/portal/fsis/topics/international-affairs/importing- products/phis-import-component/CT_Index1 53

54. FSIS Contacts Bob Berczik 202-690-4163 Robert.Berczik@fsis.usda.gov Mary Stanley 202-720-0287 Mary.Stanley@fsis.usda.gov 54

55. EPA ACE Pilots: Looking for Volunteers Consumer Product Safety Commission Workshop on Electronic Filing Bethesda, MD September 18, 2014

56. Topics EPA-regulated commodities What we are doing What Trade can expect Pilot programs Trade Participation, Getting Started Sample Message Set Summary Questions? 56

57. 57 EPA-Regulated Commodities Under environmental statutes administered by EPA, six programs have import safety responsibility. Pesticides (FIFRA) Hazardous Waste (RCRA) Toxic Substances (TSCA) Fuels (CAA) Vehicles and Engines (CAA) Ozone Depleting Substances (CAA) Statutory requirements are built on risks to human health and the environment. Admissibility of EPA-regulated commodities are based on compliance to statutory requirements (reporting).

58. 58 What We Are Doing: eFiling, Automated Processing Streamline, improve reporting/processing of legal imports/exports Paper to electronic filing (Entry, Entry Summary Certified for Release, Simplified Entry/Cargo Release) –Partner Government Agency (PGA) Message Set, Automated Broker Interface (ABI) Validations to automate reviews for many EPA-regulated commodities Electronic status messaging – ABI messages (including errors and clearance) Updates, corrections – before arrival at, exit from ports Goal: Early indication reporting requirements are met BEFORE cargo is loaded on a plane, truck, train, or ocean vessel.

59. 59 What Trade Can Expect: Shortened review/processing time from current paper filings (in some cases from days/weeks to minutes/seconds) Standardized filing process for EPA-regulated commodities at all Ports nationwide Eliminate duplicate reporting to EPA, CBP Eliminate courier fees Error responses for invalid filings to provide specific information (data element level) Ability to update and correct PGA Message Set filings (future)

60. 60 Pilot Programs Current pilots in production (April 30, 2014) – Ozone Depleting Substances – Vehicle and Engine Declarations  Starting in ports of Long Beach and Newark Pilots planned for fall/winter 2014 – Notice of Arrival for pesticide imports  Starting in ports of Chicago, Port Huron, Newark – Hazardous Waste Exports (Spent Lead Acid Batteries)  Starting in ports of Hildago, Laredo Get started now –PGA Message set samples, get going with software developers

61. Trade Participation What you will do –Create message sets –Submit Test filings to the Certification Environment in ACE –Receive, respond to Customs And Border protection (CBP) notifications if needed –File in Production What you need to file (boiled down): –Ozone Depleting Substances (ODS): approved importer of record, quantity –Vehicle/Engine Declaration: Data from forms 3520-1 and 21; certification number –Pesticides Notice of Arrival: Data from form 3540-1; registration, producer establishment number –Hazardous Waste Exports: Consent number 61

62. Getting Started 62 Are you an ACE Filer? Talk to your CBP Client Rep. Are you filing these commodities at these ports? Confirm participation. –Current Pilots - Contact me and your Client Rep to get started. –Planned Pesticide Pilot - Respond to CBP-issued Federal Register Notice (expected Fall 2014), contact me. –Planned Hazardous Waste Export Pilot - contact me. Work with EPA and your software developers. Begin identifying PGA Message Set adjustments to your software (EPA will work with you on examples).

63. 8/28/2012U.S. Environmental Protection Agency 63 Sample PGA Message Set

64. Summary EPA and CBP are testing in pilots –Moving to eFiling, automated processing Need Trade volunteers to test –eReporting, early filing, messaging –Look for Federal Register Notice for pesticides pilot –Contact your Client Rep and me if you are interested 64

65. 65 For More Information Roy Chaudet Office of Information Collection Office of Environmental Information U.S. Environmental Protection Agency 202-566-1703 chaudet.roy@epa.gov

66. 66 Questions?

67. www.anderinger.com © 2013 A.N. Deringer, Inc. Heritage of Trust Since 1919 CPSC - ITDS Introduction/perspective Timing & resources necessary to participate in FSIS pilot ACE conversion Software development Testing Additional data fields How many additional data fields required Additional time required to process shipment

68. One U.S. Government at the Border September 2014 68

69. 13 th Term COAC 1 US Government @ TB  November 2013 Public Meeting Recommendations  Unified Filing of Entry Information  Entry and PGA data sent well in advance of cargo arrival  CBP and PGA review data in advance of cargo arrival, screening for data accuracy, importer & product compliance etc.  Clear PGA responses to filer at the line level  Sound Risk Assessment methodologies employed (prefer to use data not images). Document Imaging System used sparingly. 69

70. 13 th Term COAC 1 US Government @ TB  Trusted Trader Program  Expedited clearance for known importers  Leverage CBP and Trade’s investment in C- TPAT, ISA or FS  Single Window Efficiencies  Collect only the data required and utilize data collected for other purposes for the PGA data whenever possible  Consider alternative method of identifying importers/exporters/foreign facilities – DUNS number?  Risk Assessment Methodology system must be robust, recognizing compliant importers, stopping high priority targets 70

71. 13 th Term COAC 1 US Government @ TB  Single Window Challenges  Ability to timely obtain the right data from the actual importer well in advance of cargo arrival  Key entry errors – they will occur! The more data required, (especially free form, not table driven) the greater the chance for errors  Management of data across all PGA message sets will be a challenge to the entry filer and the importer. Data creep is a major concern for the trade community  When data anomalies occur, immediate feedback to the filer must be given in form of message set, so data review and possible corrections can be made 71

72. Business Needs & Realities  The Global Supply Chain is constantly evolving – legitimate trade should be managed as efficiently as possible  Non-resident Importers of Record are becoming more common.  Business to Consumer (B2C) shipments are increasing  Trade moves 24/7 – need the PGAs to make admissibility decisions well in advance of arrival to keep goods flowing.  Set High vs Medium vs Low Risk Priorities and perform post entry audits.  Staged implementation (similar to APHIS Lacey Act)  Be cognizant of the costs to delay and hold cargo 72

73. Keys to Success  Vigorous Trade Participation in ACE  The more you test, the more you learn about the system, the process and the data requirements, and the more efficient the trade will become in managing the data.  Participation in PGA Pilots by Importers and Brokers who will be affected by the PGA message set for that Agency is critical to the success of the PGA Pilot.  Data Quality Issues can be addressed  Mutual Understanding of the Data Requirements and Commercial Availability of the Data can be achieved  The Pilot is an important exercise to ensure the trade can produce the data efficiently and that the PGA has the legislative mandate to require it. 73

74. Thank You One U.S. “Efficient” Government at the Border Is our GOAL! 74