I wish to compliment anew the Department of Justice for its initiative. I do not wish to lose the momentum that has been gathered. Indeed, I have been informed by the Department of Justice that some of the differences are perhaps more apparent than real, and that agreement may be reached expeditiously.

My thought essentially was-and this was the thought of the courtthat those provisions of the bill dealing with the status of the court, and the remedies that the court ought to be able to grant, and so obviously desirable and correct that there is no controversy about them. Therefore, we ought to build upon that agreement, and hope to obtain agreement upon the rest of the bill which also has very laudatory purposes as set forth in section 101 of the bill.

Senator DECONCINI. Judge Re, thank you. I want to thank you for your fine testimony. I want you to thank the individual judges of the customs court for their involvement and participation in authorizing you to appear here.

We also thank you for your proposed statutory amendments which have been submitted.

It is of great concern to me that we move ahead. The intent of this subcommittee is to pass a complete bill, if at all possible, and as expeditiously as we can so that the House of Representatives can proceed with a bill in the second session.

I hear from both sides that the disagreements over the bill are not going to be extremely difficult, and some may just have to be ironed out, or modified and some judgments made by the subcommittee.

Judge RE. I have been tremendously encouraged by my conversations with Ms. Babcock and Mr. Cohen and I have no doubt that our goal can be achieved. I wish, once again, to compliment you, Mr. Altier, and all of those who have worked so hard on this bill.

It is difficult to have to criticize a noble effort. The reason for my comments, however, has been to help achieve the obviously laudatory purposes set forth in section 101 of the bill.

I repeat that the goal is uniformity and consistency, and the granting of due process. I noted that Mr. Cohen, in his testimony, referred to the trial de novo available in many of the cases before the U.S. Customs Court. This is obviously true. Judicial review may be 100 percent or zero, to use the words of Prof. Kenneth Culp Davis, a leading authority on administrative law.

But the problem sometimes is not whether there may be a trial de novo, but rather, when can the court exercise jurisdiction? This raises the question of effective access to the court, and that is why equitable remedies are absolutely essential.

Senator DECONCINI. I agree. I feel the momentum too. I really believe that with the Justice Department's willingness to give the time and the effort that we might very well be able to get this bill out in a short period of time, assuming we can do a good job.

We do want to thank you again, and I wish to extend my thanks to the court for providing you with the time and for letting Mr. Lombardi accompany you.

Judge RE. I want to thank you very much for the opportunity to appear.

Senator DECONCINI. Our next witness will be Ted Rojek, Chief Counsel of the U.S. Customs Service, Department of the Treasury.

Mr. Rojek, I see your statement is relatively short. Because of time, I will ask the remaining witnesses to abbreviate their testimony, although yours is only three pages, so you may proceed as you like.

STATEMENT OF THADDEUS ROJEK, CHIEF COUNSEL, U.S. CUSTOMS SERVICE, ACCOMPANIED BY RICHARD H. ABBEY, DEPUTY CHIEF COUNSEL; AND R. THEODORE HUME, ASSISTANT CHIEF COUNSEL

Mr. ROJEK. Appearing with me this morning is Richard H. Abbey, Deputy Chief Counsel of the Customs Service; and on my right is R. Theodore Hume, Assistant Chief Counsel of the Customs Service. I appreciate the opportunity to present the views of the Treasury Department on S. 2857.

The Department supports the enactment of this bill. We believe it would expand the jurisdiction of the U.S. Customs Court and the Court of Customs and Patent Appeals so that these courts could generally consider all matters directly affecting imports. By centralizing international trade litigation in these courts and by expanding the powers of the customs courts, the specialized expertise developed during the past half century could be more fully utilized so that such cases could be processed more efficiently and effectively, and greater uniformity in judicial decisions in the trade area could be achieved. By way of brief background, the customs court has, of course, generally been recognized as a specialized court. It was established in 1926 as the successor to the Board of General Appraisers, an administrative tribunal created in 1890 to relieve the heavy burden that customs duty litigation was then placing on the Federal district and circuit courts. In 1956, the customs court was specifically classified as an article III court, with new powers and responsibilities conferred upon it. In the Customs Court Act of 1970, in further recognition of its expanding role, there were several significant changes made in the court's procedures. For example, that act merged all issues relating to an importation into a single customs decision which could be reviewed administratively and judicially in a single action, thereby dispensing with the need of separately litigating issues involving classificaton and value. Also, appeals from all customs court cases now go directly to the Court of Customs and Patent Appeals, eliminating an unnecessary appellate procedure within the customs court. These changes aided the customs courts in providing more speedy review of customs actions.

However, one result of this speedier review was a reduction in the customs courts workload, while at the same time trade litigation in the Federal district courts was on the rise. Consequently, based upon our observation of recent trends in customs litigation and our more than 3 years of experience in administering and defending in the courts the substantive and procedural changes in the laws added by the Trade Act of 1974, it appears appropriate that the role of the customs courts should again be expanded and enlarged.

In 1970, imports into the United States amounted to $42.4 billion. In 1977, this figure increased by 246 percent to $146.8 billion. Not only has the volume of imports increased, but also the ratio of imports as a percentage of our gross national product has increased, from 4.3 percent to 7.8 percent. This growth has spawned an increased demand for

the quick, orderly resolution of issues and disputes which relate to imports, and a recognition that persons who are adversely affected, other than importers and American manufacturers, should be able to obtain judicial review of trade decisions that affect them.

For various reasons, much of the increased litigation arising out of trade and trade-related activities has wound up in the already overburdened district courts. Thus, legislative action is clearly needed which, as stated in S. 2857, would: (1) provide a comprehensive system of judicial review of matters directly affecting imports; (2) prevent jurisdictional conflicts in civil actions directly affecting imports; (3) provide expanded opportunities for judicial review of actions directly affecting imports; and (4) grant the customs courts new plenary

powers.

The changes proposed by this bill directly affect the judicial review of important programs and responsibilities of the Department and Service. The Secretary of the Treasury is responsible for administering two statutes aimed at preventing unfair international trade competition: the Antidumping Act of 1921, as amended; and the countervailing duty law.

In addition, the Customs Service is responsible for, among other things, insuring that imported merchandise may be admitted into the country and that the appropriate amount of duties are collected.

While due process of law requires that judicial scrutiny be applied to actions taken under the laws administered by the Department, the Congress has been extremely careful in striking the balance between the need for meaningful and adequate judicial review and the need to reduce as much as possible the attendant disruptive effect to international trade. In our opinion, S. 2857 preserves the balance which has been achieved.

Since the specific provisions of the bill have already been described by the Justice Department, I will conclude my remarks here, but will be happy to answer any questions you may have.

Senator DECONCINI. Thank you very much. We appreciate your testimony.

I think you were here this morning when the Justice Department was testifying about exports. Do you think that this bill should also take in exports?

Mr. ROJEK. I think that is a matter that we would like to give further study to. But, I would like to state for the record at this time that the Treasury Department and the Customs Service is peripherally involved in enforcement of two principal laws governing exports. One is the movement of currency out of the country, and the other is the Munitions Control Act of the State Department. We enforce the laws prohibiting the unlawful exportation of guns and munitions-implements of war. We also play an important role in the enforcement of the laws prohibiting the exportation of certain technology to the Iron Curtain countries.

Other than that, the Department of Commerce plays the principal role in the control of exports. We serve at their request in the enforcement of some of their regulations. I think those particular matters would deserve considerable study. Therefore, the comments from the Department of Commerce should also be solicited.

Senator DECONCINI. Do you mean study from your department as well? Does it pose a problem to your department if the customs court had jurisdiction for export cases that were subject to review?

Mr. ROJEK. The ones that we are involved in result, Mr. Chairman, primarily in criminal enforcement.

Senator DECONCINI. So it would not make a difference within any of your areas?

Mr. ROJEK. No. At the present time, the proposed bill does exclude all criminal jurisdiction.

Senator DECONCINI. But you have no objection if it would be up to the Department of Commerce?

Mr. ROJEK. We would have no objection.

Senator DECONCINI. I see.

Under the bill the American manufacturer, producer, or wholesaler, can challenge a finding of the Secretary of the Treasury under the Antidumping Act that there have not been sales that lessen the fair market value, or the International Trade Commission determination under the Antidumping Act that there has not been an injury. What kind of impact would such a challenge have on the resources of the Treasury Department or the ITC, in your judgment?

Mr. ABBEY. Mr. Chairman, the customs court presently has jurisdiction over actions taken by the Department of the Treasury and the ITC. I don't see that this bill would have any effect upon the resources of the Treasury Department or the ITC. It merely preserves the current jurisdiction of the customs court over these actions.

Senator DECONCINI. Have you evaluated any potential increase in the number of cases under this bill that would affect the Department of the Treasury?

Mr. ROJEK. The evaluation we have made is that the litigation which we would be confronted with would be essentially the same. There may be a difference of where in the country we would have to defend such litigation. In particular, the provisions that would provide for the transfer of certain cases with the necessary complexity would be transferred from the district courts in which they may be instituted by plaintiffs to the customs court.

Senator DECONCINI. Mr. Altier has one question.

Mr. ALTIER. Under the bill, it appears that there is a different policy of judicial review for two administrative agencies, the Secretary of the Treasury and the International Trade Commission. Do you agree with that? If so, what is the basis for not entitling persons engaged in importation the same due process and equal protection as those persons dealing with other administrative agencies?

Mr. ROJEK. I am not sure we understand the question.

Mr. ALTIER. Is there a different policy of judicial review for matters coming before the customs court?

Mr. ROJEK. Only that policy which is set forth in the existing

statutes.

Mr. ALTIER. Contrasted with other administrative decisions that are handled by the courts, is there a different type of due process or equal protection?

Mr. ROJEK. Are you asking whether the trial de novo review in the customs court is different from the review on the administrative record in some cases?

Mr. ALTIER. That is a part of the question, yes.

Mr. ROJEK. There is a difference, yes. Again, it exists by reason of the existing statutes rather than by reason of a policy of the Treasury Department.

Mr. ALTIER. I am not talking about the policy of the Treasury Department. I am talking about the statutes. Would the Government expend more effort in litigation under this statute than under other statutes that talk about judicial review of administrative decisions? Mr. ABBEY. I think I have heard something that I could consider a misconception.

The actions of the Treasury Department and of the Customs Service are, for the most part, subject to complete judicial review. They are either subject to judicial review in the customs court, or they are subject to judicial review in the district courts.

There have been some actions in the international trade area which have been delegated by the Congress to the discretionary power of the President which have not been subject to judicial review.

This has been the decision of the Congress. We have suggested that very careful review be made of any action taken by the Congress which would expand either the standing to sue of individuals to challenge actions taken by the President, or by the Secretary of the Treasury, or by the International Trade Commission, or any of the delegates of the Secretary, the President, or the Commission because of the effect it could have on international trade and trade negotiations.

However, for the most part, I cannot think of a situation in which the Treasury Department has been involved and the final agency action taken by the Treasury Department has not been subject to full judicial review in either the customs court or a Federal district court.

It was our view that the bill before you is more designed to consolidate jurisdiction and to alleviate confusion as to where an action should be brought rather than to expand the rights of persons to judical review. We believe that such a right already exists.

Mr. ALTIER. Thank you.

Senator DECONCINI. Mr. Rojek, I want to thank you very much for your testimony this morning.

Our next witness is Michael Stein, General Counsel, U.S. International Trade Commission, Washington, D.C.

Mr. Stein, we want to welcome you.

Due to time constraints and Senate rules, we will have to terminate the hearings this morning close to 11:30. So, we will print your statement in the record in full and if you can highlight that for us, please proceed.

STATEMENT OF MICHAEL H. STEIN, GENERAL COUNSEL, U.S. INTERNATIONAL TRADE COMMISSION, ACCOMPANIED BY EDWARD EASTON, ATTORNEY, OFFICE OF THE GENERAL COUNSEL

Mr. STEIN. Thank you, Mr. Chairman.

Appearing with me today is Edward Easton. On behalf of the International Trade Commission, I want to thank the members of the Subcommittee on Improvements in Judicial Machinery for the opportunity to discuss the impact that the enactment of S. 2857 would have on the functions of the Commission.