Customs Service Modernization: Impact of New Trade Compliance Strategy Needs to Be Assessed

U.S. Government Accountability Office

Customs Service Modernization:

Impact of New Trade Compliance Strategy Needs to Be Assessed

GGD-00-23: Published: Dec 15, 1999. Publicly Released: Jan 7, 2000.

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Pursuant to a congressional request, GAO provided information on the Custom Service's Modernization efforts, focusing on: (1) the status of Customs' implementation of the informed compliance strategy; and (2) whether trade compliance under the new program had improved.

GAO noted that: (1) compliance data suggest the key initiatives and actions that make up Customs' informed compliance strategy have not yet produced the benefits that were expected; (2) among the reasons for these results may be that Customs has not implemented three of the key initiatives and actions to the extent or at the pace that it had expected; (3) two of the five are fully operational; (4) three have been implemented but have not yet reached many of the intended importers; (5) in responding to noncompliant importers, Customs has had limited success in increasing compliance; (6) its efforts to raise compliance rates in selected industries led to an initial increase in the rates, followed by a decrease, and ended with the fiscal year 1998 compliance rates falling below Customs' goal; (7) Customs cited the lack of sufficient staff resources as a major reason for shortfalls in implementing the compliance assessment and account management programs to the extent or at the pace intended; (8) Customs also noted that as it implemented the compliance measurement system and introduced new analytical tools, staff have become more astute at finding noncompliance; (9) although Customs has monitored and evaluated certain aspects of the key initiatives and actions, it has not evaluated, nor does it have a plan to evaluate, the impact on compliance of the overall informed compliance strategy; (10) however, such an evaluation seems appropriate to address the concerns raised by GAO's analysis of the impact of the compliance assessment initiative on the compliance rates for 59 importers; (11) the overall improvement in these importers' compliance rates after compliance assessment was less than Customs expected; and (12) the limited extent or pace of implementation of some aspects of the strategy and GAO's findings concerning compliance rates for the 59 importers raise fundamental questions about informed compliance strategy.

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Recommendation for Executive Action

Status: Closed - Implemented

Comments: Customs agreed with the recommendation to evaluate the effectiveness of all the informed compliance strategy programs assessed by GAO.

Recommendation: The Commissioner of Customs should develop and implement an evaluation of the effectiveness of its informed compliance strategy.

Agency Affected: Department of the Treasury: Bureau of Customs