Customs Service: Trade Enforcement Activities Impaired by Management Problems

Customs developed and implemented a comprehensive Trade Enforcement Plan focused on, but not limited to, eight primary industries in the U.S. economy. Customs considers this plan fully operational and responsive to the recommendation. The plan includes a statistically valid compliance measurement system that provides a baseline for measuring importing compliance of the eight industries, and of other selected commodity groups. The eight industries include automobiles and parts, steel and telecommunications. The baseline allows Customs to ensure future compliance by the industries and to take appropriate action through an informed compliance approach, rather than concentrating on trade law violations. Prior to developing the plan, Customs did not have an institutional standard for the significance of violations discovered. More than 60 percent were marking violations, inaccurate representations of required information on imports, judged not very significant by Customs.

As part of its overall Trade Enforcement Plan, Customs is producing full 1-year baseline compliance levels for each of over 1,200 commodity groups, including the eight high-risk focus industries. Customs calculates compliance rates for the industries and commodity groups to estimate the percentage of all import entries that contain no discrepancies in tariff classification or calculation, country of origin, and other requirements. For fiscal year 1995, the compliance rate for all imports was 78.6 percent. Customs will use the compliance measurement data to measure progress toward achieving 100-percent compliance, and will be able to use the data to demonstrate effectiveness in accordance with GPRA requirements.

The Selectivity Redesign Task Force is developing random statistical sampling strategies to profile industry compliance patterns. Cargo selectivity random exams and entry summary random exams have been reduced from 55,000 per year to 5,000 to free resources to conduct the new stratified sampling strategy.

Customs' business process redesign under its reorganization plan, People, Processes, and Partnerships, and the trade enforcement redesign were accomplished by multi-disciplinary teams from all levels of Customs, including import specialists, inspectors, entry specialists, finance specialists, and operational analysis specialists.

Customs has redesigned the fines, penalties and forfeiture and seized property tracking systems. The new systems will be operating in a training mode in several areas by October 1, 1996.

Customs is providing an annual report to Congress on the status of the AD/CV program, but has no process or personnel to ensure that liquidations are being performed within the NAFTA-required 6-month limit.

A working group identified elements for a monthly electronic mail report to be manually prepared and provided to headquarters by each district. Customs is enhancing the existing automated system to enable system generation of part of the report. Complete automation of the report and its inclusion in the operations management report is Customs' long-term goal.

Customs believes that it has complied with the intent of this recommendation by developing a Strategic Plan, redesigning its budget process, working with GPRA advisory groups on a monthly basis, and supporting Treasury's GPRA efforts toward designing and implementing programs with measurable outcomes, such as the Trade Enforcement Plan, based on measurable importer compliance rates.

Customs believes that it has complied with the intent of this recommendation by developing a Strategic Plan, redesigning its budget process, working with GPRA advisory groups on a monthly basis, and supporting Treasury's GPRA efforts toward designing and implementing programs with measurable outcomes, such as the Trade Enforcement Plan, based on measurable importer compliance rates.

Customs believes that it has complied with the intent of this recommendation by developing a Strategic Plan, the Trade Enforcement Plan, annual plans and measurable objectives. The Trade Enforcement Plan, in particular, contains compliance measurement baselines for various importing industries and commodities, as well as compliance assessments of the top 1,000 large-volume importing firms and the eight primary industries. By using compliance measurement, an effective trade enforcement strategy and process has been implemented. The strategy places a higher priority on examining companies with unsatisfactory compliance levels, rather than examining those with satisfactory compliance levels.

Customs has developed a management and outcome measurement framework through its strategic, trade enforcement, reorganization, and annual plans. The business process redesign under the reorganization plan assigned process owners the responsibilities for setting forth a series of strategic goals and measures to gauge agency-wide success in trade compliance, passenger processing, outbound trade, information management and technology, finance, and human resource management. Customs is in the early stages of instituting business process management and some functions, such as trade enforcement, are further along than others. Customs, nonetheless, believes that it has satisfied the intent of this recommendation.

The Office of Information Management has developed a strategic plan (February 1994) which is linked with Customs' 5-Year Plan and trade enforcement strategy.

The ADP Steering Committee continues to determine ADP priorities and serves as a focal point for coordinating all projects that cross functional lines.

In early 1996, GAO issued a report critical of Custom's efforts to adhere to federal system development guidelines. Corrective action is ongoing (See AIMD-96-57).

Customs centralized responsibility of the IRM review program under the Office of Information Management. Other efforts include an IRM handbook, an automated reporting system, and the designation of IRM review coordinators in field and headquarters offices. A recent Treasury review of Customs' IRM planning and review process indicates vast improvement.

Customs continues to address the Blue Ribbon Panel recommendations and, as of April 1996, had implemented most of them. In addition, the Office of Human Resources Management, led by an Assistant Commissioner, was established to centralize Customs human resources support functions.

The Office of Human Resources Management is working toward developing plans, goals, and workload measures as part of its GPRA process. GAO's report on the Blue Ribbon Panel confirms Customs' progress (See GGD-96-163).

The Assistant Commissioner for Human Resources coordinates national training efforts, but other training occurs at the local level (e.g. ports) that is not under direct central control. However, Customs believes that the intent of this recommendation was met by establishing the Office of Human Resources Management and vesting most training oversight in that office, and plans no further action.

OHR completed a human resource management plan for four occupations. These reports provide the framework for addressing workforce and occupational trends with a focus on future program and recruiting needs. Customs has also initiated studies of its recruitment activities, training, and workforce database needs.

Customs' 5-year plan and annual plan provided detailed actions to improve its staff training program. One of the objectives is to redesign training content and to more effectively combine formal and on-the-job training components. Another objective is to use business process improvements techniques to enhance the ability to identify gaps between existing and required skill levels.

Based on its September 1994, reorganization report People, Processes, and Partnerships, Customs reorganized effective October 1, 1995. It reduced its headquarters staff, eliminated field management layers, established 20 Customs Management Centers, and established offices of Field Operations and Investigations. Top officials in these two offices have line authority over the 301 port operations and 20 special agents-in-charge agency-wide.

In place of a single management office, Customs created the Office of Human Resources Management, the Office of Planning and Evaluation, and Information Resources Management. These offices were created as part of Customs' plan, People, Processes, and Partnerships, for restructuring its organization and work processes. Customs considers these actions fully responsive to the intent of this recommendation and plans no further action.

The Customs reorganization was based upon a clearly communicated vision statement supported by goals, compliance measures, processing standards, and communication with the trade community, including importers, exporters, and trade organizations. The Office of Strategic Trade was established to address major trade issues, such as NAFTA, transhipment, and intellectual property rights, all concerns in the international trade environment.