expense is transferred to the public. In [An (3) While automation has many benefits and Customs envisions. Certainly, it cannot be a UNACHIEVED AUTOMATION system, Customs has While periodically searching for culprits to serve as scapegoats for a failure to fully implement the continuously made the argument to Congress that automation would cure many of the weaknesses in its operations. somewhere between In fact, Mr. Chairman, Customs is presently only part-way towards its goal and is in a stage of development conception and implementation. It is this interim period that demands a methodical and organized approach, adequate application of resources and a clear sense of automation's goals in the` context of its overall responsibilities. NCBFAA has embraced the concept of automation willingly and both as an association and on an individual broker basis, have made an unprecedented and expense. commitment to automation in both time, equipment We have recently embarked on a series of nationwide conferences, conducted jointly with Customs, to educate our membership on the broker system ABI and to facilitate Customs' progress in establishing full automation. Yet even with this support and progress, the agency seems to have lost confidence in its own plan and lost sight of higher institutional goals and thrown ABI open to a body of unlicensed interests in clear conflict with the 1984 Custom Brokers Act that the Service helped to enact. You will recall, Mr. Chairman, that the Act is designed to establish the ground rules whereby Customs could regulate our industry. It established a prerequisite of professional expertise and creates a licensing system to protect the importing and taxpaying public. NCBFAA supported this legislation because our collective reputations are undermined by colleagues who do not approach our high levels of contravention of an act less than two years old, Customs is attempting to induce ports, carriers and others to access the ABI system in a mad-rush to promote automation irrespective of the consequences. This is another example of how the agency brushes aside the rule of law as inexpedient. meet Customs' strict standards and do not professional competency. Now, in Mr. Chairman, CONCLUSION there is much that is right with the Customs Service and we who have spent our lives working with agency believe in a Customs that enforces the trade laws, collects revenues, and meets the tasks and responsibilities assigned to it by Congress. We have a tendency to become outraged when we see this mission thwarted by policies that are counterproductive to this end. NCBFAA strongly urges the committee to continue to and to pass a Customs exercise its oversight responsibilities authorization bill this year that will take the steps necessary to preserve the integrity of the Customs Service and ensure its compliance with the laws of the United States and Congressional intent. STATEMENT OF THOMAS G. TRAVIS, PARTNER, SANDLER & TRAVIS, WASHINGTON, DC; ON BEHALF OF THE NATIONAL BONDED WAREHOUSE ASSOCIATION Senator DANFORTH. Mr. Travis. Mr. TRAVIS. Mr. Chairman, I am legal counsel to the National Bonded Warehouse Association. The association represents the interest of 1,500 bond proprietors throughout the United States. The association and I are grateful for the opportunity to appear before your committee to suggest from our perspective areas where the relationship between Customs and the trade could be improved. Before proceeding further, I would like to introduce two of the members of our association. First, Carlos Casteon of Laredo, TX, representing United Export Trading Association; and Frank McRoberts of Air Freight Warehouse Corp. in New York with offices in Miami, FL, Los Angeles, and New York. What I would like to stress briefly in this oral testimony this afternoon is the depth of our feeling that the interaction, cooperation and continuing dialog between the Government and the trade community is not only desirable, but is essential if we are to have an efficient, well-run Customs Service. In the absence of such a dialog, the Government is forced to make decisions on the basis of an incomplete factual record and a lack of understanding of all the ramifications of a given course of action. The net results of such an absence of dialog is an inefficient decisionmaking process characterized by confrontation and litigation instead of cooperation and progress. Four years ago Customs altered the means by which they controlled our bonded warehouses and began to charge our members an annual fee for the cost of this new program. At that time, Customs committed to notice and comment-in other words, dialog with the trade community-prior to any significant change or increase in these fees. Customs renigged on that promise. During the last 2 years, the fees paid by our members have increased from 150 to 770 percent, with no explanation, opportunity for review or comment. Frankly, these increases are simply indefensible, either procedurally or substantively. Only now after our association has formally challenged these assessments has the Customs Service started dialog with us. A second example is the internal guidelines for the assessment and mitigation of liquidated damage claims against bonded warehouse proprietors. Again, issued by Customs without notice and comment. The predictable result-unnecessary cost and expense for both the Government and the trade community-as our members were forced to respond to penalties for things as absurd as having a broom in the warehouse for janitors' use. This spring, many of our members heard rumors that Customs was about to take actions that would have placed the very existence of some of our members' businesses in jeopardy. A followup indicated that these rumors on general order merchandise were true, and that Customs planned steps to eliminate our businesses. This action, in our view, was both illegal and represented poor policy. While we have now submitted our own set of proposals, the issues today remain unresolved. The expense to both the Government and the trade community of this irregular process is great. More importantly, the rumor mill should not be the source of such vital information for bonded proprietors or any member of the trade community. Our members are also concerned that these same types of difficulties will arise with Customs plans to centralize container station examinations. Customs headquarters has yet to issue guidelines on this question or seek input from the trade community. Not only is it difficult to interact prior to a decision being made, it is now becoming hard to even be aware that a decision has been made. Customs has reduced by 80 percent the number of administrative rulings it publishes for the public's information and it has even appeared to stop publishing a list of unpublished rulings in the Customs bulletin. Again, this only leads to more expense and inconvenience as Customs seeks to attain compliance with decisions and rulings that the trade community knows nothing about. In short, we hope that by working together these problems can be resolved so that the entire system can function more efficiently for both the Government and the trade. I thank you for the opportunity today, Mr. Chairman. Senator DANFORTH. Gentlemen, I want to thank you all very much. You have performed a real service by being here. It would have been better had Commissioner Von Raab appeared after your testimony rather than before your testimony so that he would have had an opportunity to hear you and to respond to your comments. Your comments are very similar. Your view is that the Customs Service is acting in a high-handed fashion; that it doesn't give adequate notice of its decisions; that it makes major changes in practice without letting you know in advance what it is doing; and that it doesn't communicate. I take that to be a serious charge. And I want you to know that what I intend to do is transmit your testimony to the Commissioner and ask him to respond to the point that you all make for the record. I am sure that some other Senators will have questions to ask the Commissioner and other Government witnesses for the record, but I intend to ask the Commissioner for his response to the point that you were making. Senator Baucus, do you have a question for this panel? Senator DANFORTH. Gentlemen, thank you very much for your testimony. Mr. TRAVIS. Thank you, Mr. Chairman. [The prepared written statement of Mr. Travis follows:] |