Testimony of Peter H. Powell, Sr. NCBFAA Senior Counselor On May 20, 2008 before the House Committee on Foreign Affairs Subcommittee on Terrorism, Nonproliferation, and Trade

        Mr. Chairman, I am Peter H. Powell, Sr., Senior Counselor to the National Customs Brokers and Forwarders Association of America (NCBFAA). I am also a professional ocean freight forwarder and chief executive officer of C.H. Powell Company of Westwood, Massachusetts. It is an honor to testify before you today.
        NCBFAA is pleased to offer its support to H.R. 5828, sponsored by Representatives Don Manzullo and Adam Smith. The legislation, we believe, strikes the correct balance between improving the enforcement of our nation’s export control laws and facilitating the ability of the private sector to export their product overseas. H.R. 5828 is also clearly cognizant of the differences between small, medium and large exporters, a factor very compelling to NCBFAA, an organization that prides itself on representing the interests of small business. We believe that H.R.5828 will greatly enhance our interaction with agencies involved in the export process, as well as advancing the interests of our exporting clients.
        First. allow me to tell the committee about NCBFAA. We are comprised of over 800 individual companies, from throughout the United States, who facilitate the movement of exports and imports to their marketplace. In the export realm, think of us as travel agents for cargo: we work with the exporter in arranging transportation of American goods to foreign markets. Forwarders manage the movement of exported products in the air, sea and land modes. We are required to ensure that information is filed with the relevant agencies of the federal government so that they can determine conformity with our export control laws and meet the data collection requirements of the federal government. NCBFAA members work on a daily basis with the Department of Commerce’s Bureau of the Census and Bureau of Industry and Security (BIS), as well as the Department of Homeland Security’s Bureau of Customs and Border Protection (CBP).
        The primary means for reporting export shipments to the government has been the Shipper’s Export Declaration, which is now available to filers in an automated mode, the Automated Export System (AES). Through this electronic pipeline, data is directed to Census, BIS, State, Defense, OFAC, and other regulatory agencies with jurisdiction over exports. Ultimately, direction is provided to CBP, which acts as the federal enforcement agency at America’s borders.
        In the near future, AES will be integrated into CBP’s soon-to-be-completed Automated Commercial Environment (ACE) and connect to the agencies of jurisdiction through the International Trade Data System (ITDS). Thus, by filing electronically through a single window, export data will be routed simultaneously to all relevant agencies for approval and oversight, while on-the-ground enforcement instructions will subsequently be issued to Customs at the port. The opportunity for better, more accurate enforcement and disposition of cargo makes AES an invaluable tool to both the government and exporter alike. But, it becomes all the more critical that the information going into AES is accurate, reliable and timely.
        H.R. 5828 is an important step in meeting these objectives. The legislation establishes the Automated Export System as the primary instrument for inputting Shipper’s Export Declaration data and delivering that information to the appropriate federal agency.
        Importantly, it changes a paradigm. Presently, when information is keyed into AES, the system will accept any information filed at face value. It is then the responsibility of federal enforcement personnel to identify prohibited or restricted exports as they flow through our ports. As trade increases dramatically, particularly now during an unprecedented high water mark for exports, the task of intercepting 100% of the goods that violate export control or trade sanctions becomes impossible.
        H.R. 5828 requires AES to use the power of automation to assist in this task by refusing to process illegal exports. The bill requires federal agencies to incorporate laws and regulations into AES that will alert the exporter about licensing requirements and deny processing where restricted parties or countries subject to trade sanctions or embargo are involved. This will be an important compliance tool for an exporter making an inadvertent or honest mistake. It means that the filer, most often our member, will have the necessary additional resources to process export applications with greater confidence that they meet the letter of the law.
        The legislation also provides assurance to the government that the filers of AES data have the requisite skills, knowledge and professionalism to merit this trust, by requiring filers to be licensed. Candidly, it may seem unusual for a professional association to embrace licensure for its members. This position becomes more plausible in light of our years of experience working with the Bureau of the Census. NCBFAA has worked harmoniously in developing the AES system and providing education benefits to our members.
        Under the bill, Census will accelerate its efforts to educate filers and provide tutelage for those processing lawful exports. Furthermore, the licensure provisions are not unduly burdensome:

  • each company must have a licensed individual responsible for supervision and control of those employees who file SED data with AES;
  • loss of a license is protected by reasonable due process procedures;
  • and, acquisition of a license by a U.S. citizen or permanent resident is within the reach of those who meet qualification requirements reasonably expected of a responsible filer.

       Our Education Foundation will develop the curriculum to educate our members in order to qualify for a license and then to meet Census’ continuing education requirements. For those who are not members of our association, Census has authority under the bill to conduct similar such training for those seeking a license. In sum, Mr. Chairman, we are confident in the ability of professional freight forwarders to respond to this responsibility.
        The National Customs Brokers and Forwarders Association of America support H.R. 5828 and thank the subcommittee for so expeditiously holding this hearing. We also congratulate Congressman Don Manzullo and Congressman Adam Smith for authoring a bill that will greatly advance the nation’s export control system. The bill employs the power of automation both to improve enforcement and to make those requirements easier to negotiate for the exporting public. We thank you for this opportunity to speak on the bill’s behalf.


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