STATEMENT OF DAVID ROSE, TRADE RELATIONS MANAGER, CUSTOMS LICENSING INTEL CORP. ON BEHALF OF THE AMERICAN ELECTRONICS ASSOCIATION, SANTA CLARA, CA Mr. ROSE. Mr. Chairman, I am David Rose, Customs Licensing Affairs Manager for Intel Corporation of Santa Clara, California, and a member of the Customs Committee of the American Electronics Association, on whose behalf I am testifying today. AEA is the largest national trade organization for the manufacture of electronics products with over 2,800 member firms. Our association represents manufacturers of telecommunications equipment, semiconductors, computers, components, and software. The electronics industry, which employs 1.5 million people nationwide, is a vital segment of the American economy and relies heavily on international trade for its prosperity, trade which includes not only our highly significant contributions to the nation's export balance, but also on the importation of component parts. The U.S. Customs Service plays a highly important role in our ability to import and export, and AEA is pleased to have this opportunity to express our views on Customs commercial operations. Today, I wish to address an alarming trend toward enforcement and lack of service within the Customs Service, particularly in the commercial sector. This is a trend that cuts against Customs' traditional role as a facilitator of compliance of commerce and is highly detrimental to the trading community. For lack of time, I will very briefly identify problem areas and some solutions. To begin with, import specialists are becoming less accessible. I know from personal experience that answering services are being used instead of direct responses; and if I attempt to visit an import specialist, I am greeted by a sign on the door that says you can't enter unless you make an appointment. And a lot of times my calls are not returned; so, how can I make an appointment, if I don't get a response by telephone? The CHAIRMAN. The man in Brownsville tells me that you have to drive 200 miles up there to make an appointment and then drive back. Mr. ROSE. Right. Yes. Equally important, the Office of Rulings and Regulations staff and budget has been so seriously reduced that it can no longer be responsive to public inquiries; and here, I am talking about the ability to publish rulings. In addition, Harmonized System classes for imports have been dropped. Intel has seen unwarranted seizures of its merchandisetotally groundless-which Customs has later dropped, but only after a lot of headaches. We have also seen problems with regard to the user fee and what we think was at least some interim abuse by Customs on its implementation regarding the Schedule 8 exemptions. As a crescendo, we see now a Customs proposal to redefine fraud by taking intent out of the definition. Solutions. Increase import specialists and aides. Balance funding, vis-a-vis enforcement and commercial compliance and particularly with emphasis on the Office of Rulings and Regulations. Remove inspector points for enforcement. We feel that is generally deleterious. And in general, put service back into the Customs Service. The CHAIRMAN. Go ahead. Please summarize what you have left. Mr. Rose. All right. Overall, as I say, we want to return the Customs Service to its rightful status, that of an organization which performs a service to the importing community by assisting them and counseling them in the submission of a timely and accurate entry, and to an organization that performs a service to the United States by ensuring that all Customs' duties are collected with ten days of an importation, which is the due date, thereby helping to reduce our budget deficit. Thank you very much for your attention. [The prepared written statement of Mr. Rose follows:] STATEMENT OF MR. DAVID ROSE ON BEHALF OF THE AMERICAN ELECTRONICS ASSOCIATION BEFORE THE SENATE FINANCE COMMITTEE Mr. Chairman. I am David Rose, Customs/Licensing Affairs Manager for Intel Corporation of Santa Clara, California and a member of the Customs Committee of the American Electronics Association on whose behalf I am testifying today. Intel is a large manufacturer of semiconductors and computer systems, employing 18,000 people worldwide. Today I wish to address an alarming trend towards enforcement and lack of service within the U.S. Customs Service, a trend which is highly detrimental to the trading community. AEA is the largest trade association of the electronics industry, with over 2,800 high tech electronics member firms. AS you know, electronics has become an increasingly important segment of our economy; our industry is now the largest manufacturing employer in the country. Our Association represents manufacturers of telecommunications equipment, semiconductor, computers, components, instruments, software and so forth. ELECTRONICS AS A VITAL SECTOR Electronics is a vital segment of the American Economy, and it is the toolmaker for other industries, providing the equipment needed to strengthen U.S. productivity, and the global competitiveness of all sectors. A healthy electronics industry is key to U.S. leadership in the evolving information age. Since 1978, the electronics industries have created over one million new jobs in the U.S. It is now the largest manufacturing sector in the economy, employing 2.5 million Americans. We in the industry are very proud of this contribution. We believe that it reflects the traditional preeminence of our technological innovation as well as the strong competitive posture of our industry. Our industry relies on international trade for its prosperity, trade which includes not only our highly-significant contribution to the nation's export balance, but also on the importation of component parts. The U.S. Customs Service plays a highly important role in our ability to import and export and AEA is pleased to have this opportunity to express our views on Customs' commercial operations. TRADITIONAL ROLE OF CUSTOMS Much of what you will hear today will consist of anecdotes and statistics pertaining to decreased lack of service and increased enforcement within the Customs Service. In years gone by, Customs viewed itself as a facilitator of compliance. Recognizing that very few of the reputable firms engaged in commerce intentionally seek to violate the law and, also acknowledging the incredible complexity of Customs law, the Service provided a body of resources to the public to assist them in complying. An import specialist knew products, manufacturers and importers and their trading practices in detail and was able to work with the trading community in securing observance of the regulations and in finding the most expeditious path possible for the lawful movement of goods into and out of the United States. As another example, The Office of Regulations and Rulings was established not only as an enforcement resource but also as a communications medium. OR&R provided interpretations of complicated or ambiguous regulations and informed the public of the latest positions taken by the Office of Commercial Operations. Yet, above all, there was a spirit of cooperation evinced by the agency. SHIFT IN RESOURCES In assisting the vast majority of the importing community to achieve voluntary compliance, the Customs Service was able to focus its enforcement resources on the cheaters and frauds. Today this need is even greater especially in light of Customs yet Customs seems to be moving in entirely the opposite direction. |