Customs Update: We told you so
(Published in the Journal of Commerce Online May 4, 2007)
 
A major concern the trade has had since the Department of Homeland Security was stood up in 2002, is what would the reorganization do to trade enforcement/compliance? It is, of course, expected and understandable that the main focus of DHS is national security and that is a uniquely government function, but there are too many anecdotes about trade enforcement opportunities which have been missed.
The trade has been confronted with the 24-hour rule, advance manifest requirements, 10+2, TSA mandates and many other dramatic changes. At the same time, there have been a plethora of stories about American companies suffering at the hands of unfair competition through misclassification, undervaluation and the like, the specifics of which have been unattended by Customs and Border Protection because the agency has simply been overwhelmed with sometimes conflicting priorities and does not have the staffing it needs to properly discharge all its responsibilities equally.

Now comes the Government Accountability Office to tell us, what we thought was going on is, in fact, real. In a report entitled Customs and Border Protection Needs to Improve Workforce Planning and Accountability, GAO begins by stating:

"Staff resources contributing to customs revenue functions have generally declined since the creation of DHS due, in part, to department priorities and recruiting and retention problems."

The office quickly admits the staffing levels are now going back up, but anyone who has tried to reach an import specialist, or learn the status of a drawback claim, petition or protest knows, it just keep taking longer to get decisions. It is also still the norm that in order to reach a commodity team, the caller will more likely than not get voice mail and have to hope for a return call in the near future. It is also typical for those of us on the West Coast to have Customs personnel on the East Coast return our call by leaving a message early in the morning, long before our normal business hours, and then play phone tag for another day or two!

When DHS was created, Section 412(b) of the Homeland Security Act mandated that Customs was to maintain certain minimum staffing levels for nine specific revenue function positions: Import Specialists, Entry Specialists, Drawback Specialists, National Import Specialists, Fines, Penalties, and Forfeitures (FP&P) Specialists, Office of Regulations and Rulings (OR&R) attorneys, Customs Auditors, International Trade Specialists and Financial Systems Specialists. The act also mandated minimum levels of support staff, including management, technical and administrative support functions, such as Liquidators, Seized Property Custodians, Customs Technicians, Assistant Port Directors, Account Managers (is there anybody who has had just one?) and Economists.

When GAO looked at the staffing levels for its report, it found the numbers were relatively consistent until April, 2005, when they started to seriously decline. In the last year, Customs has made a concerted effort, and those numbers are now increasing, but many of these individuals are new to their positions and so must get beyond the initial learning curve.

Despite the increases, the report states a number of openings remain for OR&R attorneys, Customs Auditors and International Trade Specialists. Additional hurdles come from the fact that the time Customs Officers, ICE Investigators and OIG Auditors contribute to customs revenue functions has been drastically reduced due to work volumes. All of us who deal with ICE know from experience, the agency is overrun with immigration responsibilities. The report indicates the amount of time spent by ICE agents on trade cases has dropped from an average of 7 percent to an average of 3 percent! No wonder ISET units are becoming de rigueur throughout the country!

The GAO goes on to say that Customs lacks a strategic workforce plan but has taken some steps recently to improve its "human capital management amid external and internal challenges." It chastises Customs for still not having performed an assessment to determine the "critical workforce skills and competencies" needed to meet current and future revenue functions. The report specifically mentions the intention of Customs to alter the role of Import Specialists, so Customs is developing "congressionally mandated resource allocation models" to figure out ideal staffing levels, but has not undertaken similar allocation modeling for other positions.

The GAO points out Customs' responsibilities are also changing. Specifically mentioned are the plethora of free trade agreements to which the United States has become a party, and which, by definition, take a good deal of the time of the attorneys at OR&R. Time spent negotiating and later enforcing trade deals means these attorneys are not available to perform other functions, such as issuing binding rulings.

Another change in focus involves the Fines, Penalties & Forfeitures offices. FP&F has always needed more staff and had more cases than it could handle. Now, in addition to dealing with trade-related seizures, penalties, liquidated damages and similar enforcement actions, this already overburdened staff is being required to handle immigration and agriculture enforcement.

The GAO report concludes with these recommendations:

1. That Customs develop a strategic workforce plan and work with the White House Office of Management and Budget to establish and report on performance measures related to customs revenue functions in its Performance and Accountability Reports;

2. The DHS Inspector General should identify areas of high risk related to customs revenue function.

Frankly, there is likely unanimous agreement in the trade -- we dont need someone in Homeland Security to tell Customs its high-risk areas. What we need everyone (meaning Congress) to understand is you can't keep asking Customs to do more and then not give it the tools with which to do the job. Of course, when GAO refers to high risk, it means does the agency have the proper policies and procedures in place to accomplish its mandated goals, but for those of us in the trade, we prefer the agency be given the necessary tools to allow it to focus on trade enforcement and facilitation and to do that, Customs needs more resources -- money, equipment and staff.

If Congress really wants to have Customs run more efficiently and, therefore, catch more bad guys, there are several obvious things which are needed. First, the portion of the Homeland Security budget devoted to Customs needs to be substantially increased. Similarly, the portion of the DHS budget devoted to ICE also needs to be increased by a large amount. Then, more money is needed by both parts of DHS for training and equipment.

We also have to recognize that when Congress enacts legislation requiring that Customs take specific action, such as electronic truck manifest filing, the expectations and time lines must be realistic and the methods selected must have some rational relationship to the ultimate goal. Right now, Customs feels compelled to ramrod e-manifest through to full implementation because the failure to do so could lead to enactment of the hair-brained idea of 100-percent examination, when in fact, the better approach to e-manifest would be to work out the kinks with the existing users before finding the system flooded with transactions from all the land-border shipments. There are only so many times someone from Customs can say, well, it has to work, before all credibility is lost.

Let's be honest. Customs is caught between a rock and a hard place. On the one hand, it is the frontline agency when it comes to interdicting the bad guys and illegal "stuff". On the other, its management feels compelled to do more and more in that area. It is understandable that no one wants to be the person who let the terrorist or the terrorist device slip through, but at the same time, GAO admits that it did not assess the effectiveness of Customs' performance of its revenue functions.

For those of us who deal with Customs on a daily basis, we find the vast majority of its staff is trying to do their jobs in less than ideal circumstances, but still seeking to work with the trade. The question is, can the same be said for Congress? And, is Customs getting the support and direction it needs from the Department of Homeland Security?