Tell Me Who You Really Are
No postal code? No problem.
A few weeks ago, I wrote about a proposal from CBP to roll out a modest amendment to one of the data elements required for making entry of goods into the United States. In essence, the amendment would have made it a requirement to provide CBP with a Chinese postal code when the declared “manufacturer” was a company located in China.
There were some minor technical challenges associated with CBP’s proposal, and industry pushed back. Hard. I, for one, had been a dissenter. I didn’t (and still don’t) see why this would be a heavy lift, and the technical challenges seemed quite solvable. If there are shipments arriving in the United States from Xinjiang which CBP can’t certainly identify—and apparently there are—beginning to collect postal codes for Chinese manufacturers seemed like a valuable, and achievable, baby-step.
Nevertheless, CBP retreated, and the proposal was withdrawn completely just a few weeks after it rolled out.
When I wrote about this development in October, I tried to put the baby-step MID / postal code collection into context, by explaining:
There have been other, bigger changes considered for the MID in the past. CBP has considered jettisoning the quirky CBP-invented MID altogether, and supplanting it with something more universal, like a Dun & Bradstreet number. There is certainly a lot to commend such an approach, but it is considered a Big Deal and so, subject to much deliberation.
Well, apparently the deliberation is over and this Big Deal is ready to launch. Published in today’s Federal Register is this notice for the launch of an official pilot to eliminate the MID, replace it with a universally recognized number known as a Global Business Identifier (GBI), and expand the number of specific foreign entities that must be declared in a customs declaration from one (1) foreign entity, of the importer’s choosing, to three (3) foreign entities, specifically defined.
By launching this particular pilot at this particular time, CBP qualifies as a nominee for the Biggest UFLPA Development Masquerading as an Obscure Data Enhancement Award. The UFLPA is not mentioned in the announcement at all, though that is (to this commentator, anyhow) one of the most obvious and compelling applications.
How the Global Business Identifier Pilot Will Work
The pilot will, in fact, jettison that quirky CBP-invented MID in favor of a Global Business Identifier (GBI), which is the term CBP is using to describe one of the three following numbers:
a 9-digit Data Universal Numbering System (D-U-N-S®) number available from Dun & Bradstreet,
a 13-digit Global Location Number (GLN) assigned by GS1, or
a 20-digit Legal Entity Identifier (LEI) assigned by the Global Legal Entity Identifier Foundation.
Companies interested in participating in the pilot can apply to do so. For now, the pilot will only operate on formal (Type 01) or informal (Type 11) entries, and will only be available a few specific types of products: alcohol, toys, seafood, personal items and medical devices. Importers of these products that participate in the pilot will be required to provide one of these GBIs for each of the following foreign entities related to a covered customs entry:
the manufacturer
the shipper, and
the seller
Additionally, it will now also be optional for importers to report GBIs for each of the following foreign entities as well:
the exporter
the distributor, and
the packager.
Reached for comment about the withdrawal the UFLPA MID postal code proposal and its swift replacement with the full-blown GBI pilot, a CBP spokesperson said:
What this Bodes for UFLPA Enforcement
It’s important to remember that this is still just a pilot. Plenty could change before the GBI declaration gets rolled out across all importers (and imports). But you can see where this is going.
For many of the laws CBP must enforce—especially including laws administered by partner government agencies—the identity of foreign parties involved in the import transaction is highly relevant. And yet, for years, the declaration of such foreign entities has been both the portion of any given customs declaration most likely to contain human error, and also, considerably vague in terms of what it actually indicates.
Importers and brokers had to manually craft their own bespoke identifier for foreign manufacturers (a process bound to be error-riddled) and had the discretion to identify either a manufacturer, a shipper or an exporter as the “manufacturer” for purposes of the MID. Which is to say, the MID didn’t necessarily tell CBP very much, about anything of value, and what it did tell, it frequently told with embedded data errors. That is now well on its way to changing.
Of all trade and border-enforced laws that concern themselves with the identity of foreign entities, the UFLPA (and in some contexts, Section 307) is the 800-pound gorilla. These laws concern themselves with sub-tier manufacturers and raw material producers—companies that not only aren’t doing direct business with importers, but that might not be known or easily discovered.
The questions of how that variety of information is best captured, maintained, and presented or declared to CBP is still very much unresolved. If you’re a trader caught in the net of UFLPA enforcement, this type of data is critical if you hope to find a pathway to release. But the law and its enforcer provide nothing approaching clarity regarding what that data must consist of, let alone how it should be presented to CBP (UFLPA Importer Guidance and UFLPA Strategy, notwithstanding).
Nevertheless, the GBI pilot is certainly a big first step in the direction of greater clarity and greater accountability for the accuracy of data. It will be interesting to see whether it is a success.