(2:00pm-5:00pm on August 6, 2015, American Institute of Architects Board Room, 1735 New York Avenue, NW, Washington, DC 20037)

Committee Members in Attendance:

• Sue Presti-Public Policy Resources
• Nancy Sparks-FedEx
• James Campbell
• Keith Kellison-UPS
• Rodolfo Wolniewitz-DHL
• Gene Del Polito-Association for Postal Commerce
• Merry Law-WorldVu LLC
• Don Soifer-Lexington Institute
• Michael Mullen-Express Association of America
• Lea Emerson-United States Postal Service (USPS)
• Bruce Harsh-U.S. Department of Commerce
• Anne Fisher-Postal Regulatory Commission

Designated Federal Officer:

• Joseph P. Murphy-Department of State

Introduction-Agenda Items 1-3

Mr. Murphy opened and chaired the meeting of the Advisory Committee on International Postal and Delivery Services (IPoDS). The meeting was open to the public. Acting PRC Chairman Taub attended as well as PRC staff and officials from the USPS, Department of Homeland Security, Customs and Border Protection (CBP), and the Department of State.

Mr. Murphy began the meeting with membership announcements, noting that Mr. Kellison had been appointed to the Committee, replacing Norman Schenk, and that Jean-Philippe Ducasse has resigned. Mr. Murphy also provided a brief overview of recent international postal developments, in particular the UPU World Strategy Conference in Geneva and the spring session of the UPU Postal Operations Council (POC). He highlighted work underway in the POC to develop proposals on terminal dues for the UPU Istanbul Congress and an initiative to accelerate work on the integration and modernization of the UPU’s portfolio of physical services.

Agenda Item 4 (Update on International Postal Developments)

Mr. Murphy asked Ms. Emerson to give additional highlights of the Postal Operations Council. Ms. Emerson noted that the Global Envelope Alliance made presentations to amend the Letter Post Regulations to give countries the option of accepting placement of the address on the reverse side of the envelope. The proposal came to the POC after endorsement by the UPU Consultative Committee, which had taken the matter up at the urging of IPoDS member Charles Prescott. Ms. Emerson also reported that the POC’s Customs Group discussed providing electronic advanced data, the Postal Security Group endorsed upgrading UPU security standards and the POC adopted a Japanese resolution to develop a roadmap to implement electronic advance data for security (EADS).

Mr. Campbell inquired about U.S. support for a Chinese proposal to receive UPU assistance in enforcing their outbound monopoly. Mr. Murphy responded that the U.S. delegation had expressed concern over anti-competitive elements of the Chinese proposal. Nevertheless, the purpose of the proposal is to examine ways to prevent the abuse of UPU documentation, which is a goal the United States supports. Accordingly, he said, the U.S. delegation will work with Chinese representatives to improve upon their proposal.

Ms. Sparks asked Ms. Emerson for clarification on the new terminology of “EADS,” inquiring if that is different from the advanced customs data that will be mandatory for next year. Ms. Emerson responded that it is for a different purpose. She commented that while ITMATT (“Item Attribute” data) is specifically for customs, it all relates to advanced data for security. Robert Woods from CBP agreed but added that the information needed for security and customs clearance are significantly different in regards to the amount of information required.

Ms. Presti raised a question about the EADS work underway, asking what channels it will be worked through in the POC and if it will be consolidated within one working group or spread out through a variety of groups. Mr. Murphy asked that Peter Chandler from the U.S. Postal Service respond. Mr. Chandler stated that the decision making will be spread out within multiple groups. Ms. Presti also asked if there are private stakeholders involved and noted the importance of getting their input.

Agenda Item 5 (Customs)

Mr. Murphy began with a detailed overview of the IPoDS Customs Working Group meeting held at the Department of State on July 29 (see meeting documents for the full report). Mr. Murphy stated that the purpose of that meeting was to discuss the proposal submitted by Ms. Sparks and Mr. Campbell at the Committee’s February meeting to Amend Article 24.3 of the UPU Convention to delete “designated operator” from the paragraph.

At Mr. Murphy’s invitation, Mr. Campbell began the discussion of the proposed Article 24.3 amendment and his alternative formulation of it, which he developed in response to the views expressed in the Working Group meeting. Mr. Campbell informed the Committee that his revised amendment left the existing language of 24.3 intact but added clarifying language that the Article is not intended to create any exemption from customs liabilities for designated operators under national law.

Mr. Murphy opened the floor for comments. Keith Nusbaum spoke on behalf of the US Postal Service and stated that USPS does support the proposal in either its original or alternative form. Mr. Murphy asked Mr. Campbell if he would like to have the proposal further considered or put to a vote. Mr. Campbell asked to delay a decision and requested specific written comments from the Postal Service outlining their objections. Mr. Nusbaum indicated that he would not be able to commit to providing a written response without consulting with his headquarters.

In addition to this discussion, Mr. Murphy provided an update on the status of the Committee’s recommendation that the United States propose an amendment to the UPU Convention introducing a principle of non-discrimination in the customs treatment of mail and similar shipments. He reported that the specific language recommended by the Committee was modified slightly, in consultation with the proponents. This change, which allowed for inter-agency consensus on the recommendation, was accepted by the Department in a decision by Assistant Secretary for International Organization Affairs Crocker and the United States subsequently submitted the proposal to the POC Customs Group for its consideration. (Note: the submitted proposal, incorporating the revised language for the amendment, appears in the meeting documents.)

Mr. Murphy informed the Committee that the United States faced considerable resistance from the UPU International Bureau and the Customs Working Group chair to putting the proposal on the agenda. Although it was finally accepted, only very limited discussion time was allowed. Mr. Murphy related that Norway had spoken in support of the U.S. proposal but that France and Brazil said that it was inappropriate to introduce this matter to the UPU and that the WCO or the WTO were more appropriate venues. In the end, he said, POC Committee One, to which the Customs Group reports, noted the proposal but took no action on it. Mr. Murphy told the Committee that the U.S. delegation is considering whether to introduce the proposal into the UPU Council of Administration or to hold it as a country resolution for Congress. Mr. Campbell said that he, along with FedEx and UPS, will provide a revised version of the proposal that maybe more acceptable to UPU members.

Agenda Item 6 (Terminal Dues)

Mr. Murphy informed the Committee that Assistant Secretary Crocker approved the request to establish a Terminal Dues Sub-Committee and gave a detailed review of the meeting held at the Department of State in July. (Note: a full report appears in the meeting documents). After Mr. Murphy’s report he opened the floor to questions. In response to the report, which covered the Sub-Committee’s detailed discussion of the initiative in the POC to integrate and modernize the UPU portfolio of physical services, Mr. Kellison requested that the high level details of the integration effort be provided to the full Committee. Mrs. Emerson noted that the Integrated Product Plan is the focus of the Product Strategy and Integration Group (PSIG) but she provided an overview of the remuneration aspect.

In response to Mr. Kellison’s request, Mr. Murphy asked Mr. Chandler to summarize the work being done on the Integrated Product Plan in the PSIG, including product features and streamlining. Mr. Chandler highlighted the emphasis POC members placed on the “need for speed” in decision making regarding issues such as service levels, weight barrier distinctions, tracking, coverage, and bar coding. The key elements, Mr. Chandler said, reflected the proposed division of documents and goods. Mr. Chandler completed his overview stating that the ideal is to rationalize, eliminate overlap, to have a fundamental distinction between documents and goods and then three layers of services with a menu of options with appropriate pricing.

Following discussion of Mr. Chandler’s explanation, Mr. Murphy asked the Committee if it would like to endorse Mr. Kellison’s proposal, made in the Terminal Dues Sub-Committee, that the Committee formulate a list of principles to inform the Department of State’s engagement in the integration and modernization initiative and subsequent considerations leading up to Congress. The proposal received unanimous endorsement by the Committee, and Mr. Murphy undertook to organize a working group or subcommittee meeting for that purpose.

The Committee then took up the pending express industry proposals on terminal dues, noting that the subcommittee had not made any recommendation on them. Mr. Del Polito stated that he did not feel the issues were clearly framed for decision, and the Committee agreed to defer consideration of the proposals until its next meeting.

Before concluding the discussion, Mr. Murphy commented on media coverage of the terminal dues issue, some of which was stimulated by a Congressional hearing in June. Mr. Murphy told the meeting that assertions in the media and elsewhere that it is cheaper to mail items from China to the United States than within the United States are contradicted by the published rates of China Post and USPS. He expressed the view that these claims do more to inflame than to inform debate.

Agenda Items 7 (Charter Renewal)

Mr. Murphy reminded the meeting that the IPoDS Committee Charter would expire in November and invited written suggestions for changes that could be reflected in the renewed charter.

Agenda Item 8 (Other Business)

Ms. Sparks asked that at the next meeting Institutional Reform be added to the agenda. Mr. Murphy acknowledged this request and adjourned the meeting.