Three-Nation Alliance Formed
|Federico (Kiko) Zuniga
|For Immediate Release
Washington, D.C.: The customs brokers associations of the United States, Canada and Mexico have joined forces to enhance the security and efficiency of cross-border trade throughout North America. Formed on August 17, 2004, the North American Customs Brokers Alliance (NACBA) draws on the unique expertise and market presence of brokers in all three countries to help importers, exporters, and governments address customs issues in the largest single free trade market in the world.
Total trade between the three countries reached $626 billion in 2003, compared to $109 billion in 1994 -- an increase of some 574 percent in less than 10 years.
The National Customs Brokers and Forwarders Association of America, Inc. (NCBFAA), the Canadian Society of Customs Brokers (CSCB) and the Confederacion de Asociaciones de Agentes Aduanales de la Republica Mexicana (CAAAREM) represent the leading brokers and freight forwarders in their countries. Members handle 80-95 percent of all import transactions in North America, on behalf of hundreds of thousands of traders.
Speaking on behalf of the Alliance, NCBFAA President Federico (Kiko) Zuniga said that "rapid growth in trade, and renewed concerns about security, raise challenges for both business and governments. At the same time, advanced information technologies have become critical – both for businesses seeking to improve supply chain management, and for governments seeking smarter ways to protect the integrity and security of border crossings."
Zuniga noted that customs brokers work daily mediating between the needs of business and governments. "The Alliance brings technical expertise and a unique understanding of the challenges faced by all parties. Working together, we have a valuable opportunity to help shape effective, streamlined procedures at our shared borders and ports of entry."
The first priority for the Alliance will focus on Advance Commercial Information (ACI) requirements and procedures. Each government is developing and implementing ACI regulations and related electronic reporting requirements. Before the end of 2004 the Alliance will present a common position on ACI to all three governments that meets security requirements, while facilitating legitimate trade.
With headquarters in Washington, DC, the National Customs Brokers And Forwarders Association of America, Inc. (NCBFAA - www.ncbfaa.org) represents nearly 700 member companies - the nation's leading freight forwarders, customs brokers, ocean transportation intermediaries (OTIs), NVOCCs and air cargo agents, as well as the importers and exporters they represent. Established in 1897 in New York, NCBFAA is the effective national voice of the industry. Through its various committees, counsel and representatives, the Association maintains a close watch over legislative and regulatory issues that affect its members. It keeps them informed of these and other related issues through its weekly Monday Morning eBriefing, Quarterly NCBFAA Bulletin, and various meetings and conferences throughout the year.
The Canadian Society of Customs Brokers (CSCB - www.cscb.ca) is one of the most authoritative, respected organizations in the Canadian trade and transportation industry. Established in 1920, the CSCB currently has more than 160 corporate members, 2000 Certified Customs Specialists, and 500 students. The membership also includes many associate members who are not customs brokers, but who are actively involved in trade or trade facilitation services. A key priority for the CSCB is to work with government and private sector partners to develop new, innovative solutions to emerging challenges in the international trade community.
The Confederacion de Asociaciones de Agentes Aduanales de la Republica Mexicana (CAAAREM), Mexico’s National Custom Broker Confederation represents the common interests of more than 880 skilled professionals who, integrated in 38 Associations, offer personal services and assistance in Foreign Trade and International Logistic Services. Created more than 60 years ago, this organization supports and promotes relevant activities for its confederated members. Specialized consulting services are offered through a combined structure --- a Custom Brokers Committee, and a full-time professional staff of experts in areas such as: consulting; technical assistance; professional training and development; and national assembly representatives.
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North American Customs Brokers Alliance
The NACBA Mission
The North American Customs Brokers Alliance represents the national customs brokers associations of Canada, Mexico and the United States. Its mission is to support and develop a more secure and efficient global supply chain.
Relying on data collection, control and disposition as a means to secure the supply chain against external threats and harmful exploitation, the Alliance will:
- Work toward the specification, standardization and streamlining of datasets in existing and novel commercial data channels;
- Develop strategies and methods to defend and protect the supply chain; and
- Increase the value added by the customs brokerage community.
It will progress towards this goal by leveraging the experience and expertise of its constituencies, and through cooperative engagement with government.
The North American Market
Since 1994, NAFTA has helped to make North America the word’s largest free trade area. This market now links more than 406 million people producing more than $11 trillion worth of goods and services. The total volume of trade between NAFTA partners has expanded from $109 billion to $626 billion in 2003. NAFTA parties conduct some $1.7 billion in trilateral trade each day.
This dramatic increase in trade volumes has affected the nature of import and export transactions in a number of ways.
- Stringent information reporting requirements - While NAFTA has reduced or eliminated most import tariffs and duties between the three countries, it has not eliminated the need for importers and exporters to comply with stringent information reporting requirements.
In fact, requirements for documenting and reporting commodity classifications and codes, points of origin and destination, and other information related to each transaction have become more demanding, under increasingly demanding time frames. Failure to comply with the requirements and procedures set by each government can result in significant monetary penalties for traders, and costly disruptions of supply chains.
- New approaches to security, compliance and risk management - Increased trade volumes have been accompanied by growing concerns about border security, leading governments to search for more efficient ways to manage customs transactions, monitor compliance, and protect their citizens.
As a result, regulators have focused on intelligence gathering, data collection and risk assessment techniques to facilitate legitimate trade, while identifying high-risk transactions and border crossings. These techniques depend on sophisticated technologies for information management and exchange. Compliance and enforcement strategies focus increasingly on administrative penalties for businesses that do not comply with regulations regarding the accuracy, timing and format of trade documentation and reporting.
- A more competitive business environment demands more efficient, integrated supply chains - Companies throughout North America are facing greater competitive pressures, as the free trade market becomes more integrated. A key business strategy has been to focus on improving the efficiency of cross-border supply chains – eliminating costly delays, and improving communication and data exchange between importers, exporters, carriers, customs brokers, freight forwarders and others involved in a company’s business processes.
A major concern is to eliminate bottlenecks in the supply chain, particularly at the border. Customs regulations and procedures, which interrupt the flow of legitimate trade, can have disastrous results for traders. At the same time, companies share the concerns of government regarding security – recognizing that a secure, stable supply chain is vital to business as well as regional economies.
Advance Commercial Information (ACI)
The governments of Canada, the United States and Mexico are developing and implementing ACI rules and procedures, which require the electronic submission of cargo information before an import shipment reaches the border of the destination country. ACI will apply to all modes of transportation, and is also being developed as an export requirement. The goal of ACI is to allow officials in each country to review cargo information in advance of arrival (or departure), in order to identify high-risk shipments that may pose a threat to security.
Traders are concerned about ACI because all of their trade chain partners may not have the capability to meet requirements for mandatory pre-arrival electronic transmission of information. They are also concerned about the investments needed to meet ACI requirements, and are looking for some certainty that low-risk shipments will move smoothly across borders once ACI processes are in place.
The role of customs brokers
The customs broker’s primary responsibility is to work with clients to support compliance with customs rules and regulations in the most efficient, cost-effective way possible. As information reporting requirements become more complex, and client concerns with the speed and efficiency of supply chain flows become more demanding, brokers have become increasingly involved in all aspects of client operations. They work with the client’s business partners -- suppliers, carriers, forwarders, and others – to ensure that the technology and procedures are in place to meet both business and regulatory demands.
As a result, customs brokers play an increasingly important role in representing their clients’ interests in consultations on new customs rules, regulations and procedures.