Recent Trade & Tariff Perspectives

December 8, 2021 | Anahi Czeszewski  Product Development Manager

port official inspecting containers 

Taking the Customs Modernization Act into the 21st Century

There have been some evolving changes in technological advancements, trade patterns, and overall environmental footprint. However, customs legislation concerning informed compliance and shared responsibility has remained nearly unchanged for 30 years. Recently, new developments for the Customs Modernization Act of 2021 have emerged. Learn how these new provisions, if they become law, could impact cross-border trade enforcement and affect your organization’s regulatory compliance program.

21st Century Customs Framework: An overview

U.S. Customs and Border Protection (CBP) established the 21st Century Customs Framework (21CCF) as an effort to address new trade challenges that emerged since the establishment of the Customs Modernization Act of 1993, commonly referred to as the “Mod Act.”

CBP’s mission in this approach is to, “Develop legal and operational changes that embrace 21st Century processes and emerging technologies to better secure national and economic security, enhance data integrity, account for emerging actors and business practices, and better facilitate trade by reducing financial and administrative burdens and constraints in customs transactions.”

21st century process and emerging technologies graphic | C.H. Robinson Trade & Tariffs

Source: 21st Century Customs Framework | U.S. Customs and Border Protection (

How the 21CCF foundational pillars transform the future of trade

The objective for the reimagined framework, as expressed by the government, encompasses these driving forces:

  • Enhanced facilitation: Improving the timeliness and quality of data received in both the entry and de minimis environments to receive source information, as it materializes, from a broader set of new and emerging knowledgeable parties.
  • Seamless data sharing: Expanding the ability to share more information with trade and clarify how information is used for targeting, admissibility, and other purposes.
  • Increased visibility and accountability: Increasing visibility into modern supply chains to better position CBP to identify and hold culpable parties accountable for violative behavior.
  • Timely and effective enforcement: Providing more enforcement flexibility and streamlining processes to better deter bad actors and protect U.S. consumers and businesses from unfair competition.
  • Secure funding: Exploring alternative sources of funding above and beyond annual appropriations to help build and sustain the infrastructure that is needed to meet the demands of trade.

The task force responsible for providing feedback for “refinements to the statutory framework” officially kicked off on June 28, 2021, and comprises more than 90 representatives from varying members of the customs environment, including customs brokers, importers, freight forwarders and carriers.

How can these new provisions affect your company?

After a few relatively quiet months, on November 3, 2021, Senator Bill Cassidy—a member of the Senate Finance Committee—presented a draft proposal bill for “The Customs Modernization Act of 2021,” developed in consultation with CBP as part of the 21CCF. The Senator invited comments from importers, trade associations, and e-commerce marketplaces on the 22-page document by November 20, 2021.

Comments circulated regarding the draft proposal bill, some of which observed that the provisions address enforcement more than trade facilitation. Further, comments were made about the new provisions centered around the collection and use of information from importers and exporters.

Let’s examine these provisions currently being considered and what can be expected if they become legislation.

  1. Recordkeeping: Requirements for maintaining records would be extended to additional parties who “direct or facilitate” cross-border transactions. Parties mentioned include anyone who, “Submits, transmits, or otherwise makes available or visible to U.S. Customs and Border Protection documentation or information under the customs and trade laws,” as well as those who, “Own or operate a commercial or marketing platform or marketplace, through which merchandise imported into the United States is offered for sale or purchase in the United States.”
  2. E-commerce: As outlined in the previous point, these recordkeeping changes would bring e-commerce companies within the scope of U.S. customs laws. Parties moving merchandise under Section 321 de minimis, covering shipments valued under $800—very commonly used for e-commerce shippers—should be prepared for these heightened documentation and information requirements.
  3. Trade data collection: CBP would be allowed to collect supplementary information related to the sale, purchase, transportation, importation, or warehousing of a product through a commercial or marketing platform. Furthermore, CBP may use this information, “For any lawful purpose, including commercial enforcement.” As penalties for first violations in this area are set at $5,000, and increase to $10,000 for subsequent violations, parties involved in cross-border trade should be ready to provide additional data to CBP.
  4. Fines and penalties: Provisions were added to the draft proposal bill, eliminating gross negligence. Additionally, the standards for negligence and fraud are redefined. Modifications have also been proposed to eliminate pre-penalty notices for claims valued under $500,000. Several comments have been expressed from the trade community that these provisions have a potential to overly penalize parties and can affect due process.
  5. Antidumping and/or countervailing duty investigation claims: Provisions would be added in which CBP could be allowed to disclose the importer’s name in an Enforce and Protect Act investigation—if the importer is not identified in the allegation and CBP determines it has reasonable suspicion that evasion has occurred.
  6. Intellectual Property Rights (IPR): Similarly, with these new provisions, CBP would be permitted to share non-public information on IPR-related violations that have been provided or shared by parties, including e-commerce platforms, express consignment operators, and freight forwarders.
  7. Forfeiture of merchandise: CBP would also be granted the authority to summarily forfeit merchandise in violation of the Foods, Drug, and Cosmetic Act, as well as counterfeit goods.

How do you prepare for these upcoming changes?

Companies engaging in global trade should comprehensively review and identify how these legislative changes could impact their business. As many new and/or amended provisions to the Customs Modernization Act of 2021 include heightened concentration on CBP enforcement—be sure you understand the implications. Interested in staying proactively informed? Connect with one of our trade policy experts to learn more.


Review recent perspectives

Have trade or tariff related questions?