lVIEMORANDUM OF UNDERSTANDING BETWEEN

U.S.CUSTOMS AND BORDER PROTECTION AND

NATIONAL TREASURY EMPLOYEES UNION

BACKGROUND: On September 1, 2010 U.S Customs and Border Protection (CBP) and the National Treasury Employees Union (NTEU) met to discuss the initial steps required to implement Centers of Excellence and Expertise (CEE). In December of2010 a MOU was signed to establish two pilots to trial a variety of approaches to the administration of the CEEs. As a result of these pilots CBP sent notice to NTEU on October 14,2011 that the Agency intended to move forward with the establishment of a number of industry-focused Centers. NTEU requested a briefmg, which took place on December 19, 2011. Subsequently NTEU asked to bargain concerning the CEEs and, after a number of preliminary discussions, bargaining commenced on April 24, 2012. Numerous proposals were exchanged as bargaining continued over the next six months.

The following provisions contain the results of that negotiation process with regard to the establishment and administration of the CEEs.

AGREEMENT TERMS:

1. CEE employees will consist of core and matrix members. Core members will work for a CEE on a full-time basis and report to managers within the CEE, whether or not they are physically located at a CEE. Matrix members will work for a CEE on an as-needed basis. Matrix members will be supervised and assigned CEE work through their existing chain of command. Any solicitation to work as a core or matrix member will set f01ih the job duties of those assigned to identified work units within the respective CEE and specify the selection criteria.

2. CBP is committed to implementing and running the CEE initiative such that no employee will be involuntarily relocated to a new duty location as a result of this initiative. In the event that exceptional circumstances require CBP to reconsider this commitment, CBP will first notify NTEU National with the intent to resolve such circumstances. In the event that such exceptional circumstances remain, CBP will follow the procedures set forth in Article 39, Section 3.D. of the National Collective Bargaining Agreement (CBA).

3. Core employees cUlTentIy detailed to the CEEs will be permitted to remain as Center employees. These employees will be pennitted to be relieved of their CEE assignment and rotate back to their f01mer post of duty, once the CEEs have been initially staffed with pelmanent core employees.

4. Nothing in tills Agreement impacts an employee's light to take advantage of the reassignment options set forth in the CBA, Aliicle 39.

5. All core and matrix import specialist vacancies will be filled by the selection of qualified GS­11 and GS- 12 volunteers from specific ports where the majority of the trade functions are presently being transitioned to the CEEs. Ties will be broken by seniority within each grade level as defined in CBA Article 13, Part B. In the event there are an insufficient number of volunteers, selections will be made by inverse seniority among qualified individuals within the above referenced areas. An import specialist volunteer or involuntary draftee will be considered qualified at the solicited grade level if slhe can demonstrate that they have cunellt or recent (within the past three years) specialized education and/or experience in the Center's industIy. Mter the initial staffing of each CEE, CBP win solicit on a nationwide basis ; however, CBP may require that every other selection (or involuntary draftee), within each CEE and within each grade level, have demonstrated specialized education and/or experience, as described above. All other selections win be made by seniority within each grade level. In the event there are an insufficient number of volunteers, selections will be made by inverse seniority.

6. All other non-import specialist core and matI1x vacancies will be filled in the following manner:

National Accolmt Manager (NAM): ---Will be part of the CEE according to their designated indus1:J.y as each CEE is established ---Placement in the CEE will be based upon previously agreed indus1:J.y grouping of the staff ---All NAMs will be considered core members of the CEE

Entry Specialist: ---Solicit from key ports based upon volume of work ---Seniority rules apply among those that volunteer from the designated ports ---Solicitations will be for both core and matrix members

International Trade Specialist/Field Analysis SpecialistiNational Analysis Specialist: ---There will be separate announcements for GS-12 and GS-13 positions ---ITS requires specialized experience and/or education in targeting and/or analysis within the industry ---F ASINAS require trade targeting and analysis experience and/or specialized education ---Seniority rules apply among those that volunteer with required experience and/or education ---Solicitations will be for both core and matrix members

Auditors: ---When applicable, solicitations will be made from audit offices that have specialized experience (e.g. petroleum, IPR, textiles) ---Selection will be based upon seniority of those that apply with specialized experience and/or education ---Will include both core and matJix

National Import Specialist: ---No solicitation is needed-all NIS and NISA will be core members based upon their industry designation

ParalegallFPF Specialist: ---Solicit from key pOlis based upon volume of work ---Seniority rules apply among those that volunteer from the designated pOlis ---Solicitations will be for both core and matrix members

Drawback Specialist: ---Solicitatioos will be from key Drawback Centers based upon volume of claims filed for the industry ---Solicitations will be made from Drawback Specialists that have specialized experience and/or education in processing drawback claims within the industry (e.g. petrolemn, electronics) ---Selection will be based upon seniority of those that apply with specialized experience and/or education ---Win include both core and matrix

Attorney: ---Selection will be based upon seniority of those that apply ---Will include both core and matrix

7. Participation in the CEEs will be on a voluntaIy basis unless there are an insufficient number of volunteers.

8. Work units will be identified within each CEE. When entering the CEE, employees will have the opportunity to request a work unit of preference. Work units that include the Import Specialist job selies will follow the Redesign Model for the appropriate munber of GS-II ImpOli Specialist and GS-12 Senior Import Specialist for each unit. CBP does not foresee an overall reduction in the total number of GS-12 Senior ImpOli Specialist as a result of this initiative.

9. For purposes of CBA Article 13, Part B (Bid, Rotation and Placement), each branch within the Center will be considered a work unit. The procedures of Part B will be followed by Import Specialists and Entry Specialists, and will apply to other non-uniformed employees within the CEE. Except for the minimum time required for employees to be eligible to participate in the next bid cycle, all procedures in Part B apply to the CEE. The minimum time required for employees to be eligible to participate in the next bid cycle is one year after their initial assignment in the CEE. Participation in subsequent bid cycles will be after a minimum of two years. For purposes of Article 13, Part B, Section I .E. (Mutual Agreement), the local parties are the Center Director, or designee, and the National NTEU, or designee. A joint work group will establish a BRP procedure that will allow for the movement of CEE employees between the Centers. If after three years from the date of this MOU, the CEEs are not fully established, a joint work group will consider the establishment of an interim BRP procedure that allows for movement between a port and a Center.

10. No NIS or NISA currently in the position at the time of this MOU will be involuntruily relocated to a new duty location. CBP will ensure proper levels of review and oversight for these positions to maintain integIity and independent oversight. CBP will inform NTEU within three months of the effective date of this MOU of the steps it has taken to maintain integrity and independent oversight of these positions.

11 . IfOT Attorneys and/or Auditors volunteer to be core members, CBP will follow the selection criteria in this MOU and ensure that the employees continue to work within their respective position descriptions. Core Auditors will primarily perform non-audit services. If any audit services are performed, CBP win ensure proper review and oversight by having such work reviewed by the appropriate Assistant Field Director in Regulatory Audit. Core Attomeys will primarily provide legal advice and counsel. Any formal mlings and opinions will be reviewed and issued by the appropriate management official (au active member of the bar) in ORR. These rulings will have the status of a Headquarters ruling letter. IDY opportunities for Auditors and Attorneys will not exceed two years.

12. CBP will initiate a grade classification review one year after the date of this MOU for the following CEE core positions: Import Specialist, Entry Specialist, Intemational Trade Specialist, Field Analysis Specialist, Drawback Specialist, National Account Manager, National Analysis Specialist and ParalegallFPF Specialist.

13 . In order to encomage compliance with CBP's Telework policy, the following procedmes will supplement the CBA, Atticle 15, for those CEE core team members who request to telework: ---In accordance with Article 15, Section 4.E., the approving officialfor purposes of receiving a telework package (CBP Telework Agreement and safety checklist) is the Director, Field Operations (DFO). ---The DFO will normally approve or disapprove the requestto telework within ten calendar days.

14. For purposes ofCBA Article 42, Awards and Recognition, CEE employees will be covered by the Joint Awards Committee(JAC) that has jmisdiction over their physical work location. The Joint Team, referenced in Item 18 below, may make a recommendation concerning this arrangement in order to transfer the JAC responsibilities from the POlt (or equivalent level) to the CEEs for core employees.

15 . Article 27, Grievance Procedme of the CBA will apply to core CEE employees as follows: Step 1 grievances will be initiated by submitting to an immediate supervisor within the employee's chain of command, a written request for a meeting with the lowest level management official available with the authority to resolve the complaint; Step 2 should be filed with the Center Director (or designee); Step 3 should be filed with the Director ofField Operations (or designee).

16. Grievances from or on behalf of CEE matrix employees dealing with a decision made in the CEE should be filed in the same manuer as in Item 15, above. Grievances from or on behalf of matrix employees dealing with decisions made at their official duty station should be handled in accordance with Article 27, Section 12 of the CBA.

17. For core employees in a particular CEE, existing Alternative Work Schedule (AWS) agreements will remain in place unless re-negotiated in accordance with the CBA.

18. A joint CBP and NTEU on-going review team (Joint Team) will be established to coordinate the implementation of the CEE initiative. The Joint Team will meet regularly (e.g. quruterly) to review questions, concerns and issues arising from the implementation of the Centers. The Team will consist of no more than three NTEU and three management representatives. Absent mutual agreement by the parties at the National level, the Joint Team will discontinue meetings within one year from the establishment of the fmal CEE.

19. At the beginning of each fiscal year, CBP will provide NTEU, at the National level, with a report analyzing its performance against the CEE Performance Measures .

20. Either party may request to bargain a local agreement as a result of the impact of any new Center on local conditions of employment, (e.g. to address office space issues).

21. This MOU may be re-opened and re-negotiated by either party upon request, in accordance with CBA Article 26, Section 15. Unless specifically addressed in this MOU, all existing provisions of the National Collective Bargaining Agreement apply to the CEEs.

22. This Agreement is effective upon the signature of both parties, subject to the requirements of 5 U.S.c. 7114 ( c).

(sgd) Jonathan Levine 10/25/12 (sgd) Anne Maricich 10/18/12

Assistant Counsel for Negotiations, NTEU Assistant Director, Trade

(sgd) Andrew Langreich 10/24112 (sgd) Susan Thomas 10/18/12

President, Chapter 101 , NTEU Assistant Port Director-Trade Operations

(sgd) Paul Sumbi 10/23/12 (sgd) Thomas Overacker 10/18/12

President, Chapter 103, NTEU Supervisory National Account Manager

(sgd) John Marturano 10125112 (sgd) Elena Ryan 10/24112

President, Chapter 183, NTEU Director, Trade Facilitation and Administration

(sgd) Gary Lucas 10118112

Labor Relations Specialist