Oversight of the

United States Customs Service

May 27, 1999

The following outline sets out a proposed oversight plan for the Finance Committee's review of the Customs Services' operations. The outline is divided into three parts. The first is a narrative description of the objectives of the oversight process. The second sets out a time frame for review of the various issues the Committee intends to address, together with a description of the different phases of the oversight process we expect to unfold. The third part sets out the specific issues the Committee has identified, at this stage, for specific attention in the coming weeks.

I. The Oversight Message -- Themes and Objectives

The Customs Service faces the challenge of adapting itself to dramatic changes in its operating environment. The Customs Service's original mission -- the collection of duties which formed the federal government's principal source of revenue for the first century of the republic's existence -- has increasingly given way to two new responsibilities. The first is the facilitation of flow of internationally traded goods and services that cross our borders in growing volumes each business day. The second is the aggressive enforcement at the border of U.S. customs laws and other trade regulatory measures. The Committee's oversight process will, as a consequence, focus on Customs' fulfillment of those twin missions, together with an overview of the basic management issues that confront any government agency.

The Committee's ultimate goal is to report out and pass legislation in this session of Congress that would address issues raised in the oversight process. The Committee expects that any such legislation will contain four parts. The first will include any changes needed to clarify the Committee's expectations with respect to the implementation of the Customs Modernization Act and to ensure that the objectives of the Customs Modernization Act and Customs management challenges are being met. The objective would be to establish clear performance standards against which Customs future performance can be judged.

The second part would involve amendments, where needed, to substantive customs laws. One example from this past year's authorization bill would be the modifications to processing fees charged passengers arriving by air and sea. Given the subject matter the Committee intends to cover, there could well be other amendments that directly address either the laws affecting Customs Service operations, such as the passenger processing fees, or the laws Customs enforces.

The third part of the legislation would provide the means to sustain institutional and cultural change within the agency. This would include consideration of personnel flexibility in disciplinary matters, as well as enhanced internal and external oversight through structural and procedural reform. It could also include the consideration of providing the Commissioner of Customs with a fixed term to maintain the continuity of leadership within the service. The Committee intends to promote proposals that would strengthen the movement toward change, in addition to providing the practical management tools necessary to uphold the proposed reforms and the culture of accountability they seek to instill.

The fourth part of the legislation would provide the authorization for any appropriations which, in the Committee's judgment, are needed to allow the agency to perform its twin missions of trade facilitation and effective enforcement. Consistent with this past year's authorizing legislation, the provisions of any legislation produced this year would likely address many of the same fundamental questions regarding the authorization and allocation of personnel and other resources needed to effect Customs' basic mission.

The following discussion details the central themes that the Committee will develop as part of the oversight process.

A. Commercial Operations

The Customs Service's commercial operations confront the challenge of classifying, valuing, inspecting, and managing a current of international trade that has doubled in the last ten years. Due in large part to the success of U.S. trade policy and successive trade agreements like the U.S.-Israel, U.S.-Canada, and North American Free Trade Agreements and the successful conclusion of the Uruguay Round of multilateral trade negotiations, the share of the U.S. economy linked to international markets through import and export transactions has grown significantly. Specifically, in fiscal year 1989, the value of imports and exports totaled $1.099 trillion and represented 20.2 percent of gross domestic product ("GDP"). By fiscal year 1998, the latest year for which complete data were available, imports and exports totaled $2.071 trillion -- almost doubling in nominal terms and representing 24.3 percent of GDP.

Over essentially the same time period, and especially during the last five years, Customs’ resources have declined in real terms. While trade flows have doubled, Customs’ budget has remained flat in nominal terms since fiscal year 1989. Factoring in inflation, Customs has faced a 3 percent real decline in funding since fiscal year 1994.

In order to help Customs cope with its increasing responsibilities and budgetary constraints, as well as to ensure the more effective management of its commercial and enforcement responsibilities, Congress passed what has become known as the "Customs Modernization Act" or "Mod Act" as part of the legislation implementing the NAFTA. Central to that effort was the shift of certain compliance responsibilities to the private sector, which was supposed to allow Customs greater freedom in how it managed its resources. The objective was to encourage greater compliance by those American businesses that make the large share of the importing and exporting community, which should then liberate resources within Customs to focus more intensively on problem areas in the enforcement arena.

The Mod Act formed a basic contract between the trade community and Customs. Under that contract, the business community -- importers, exporters, customs brokers, shippers, freight forwarders, and others -- assumed the responsibility for "informed compliance." That rubric was intended to convey the business community's responsibility for the accurate classification, valuation, accounting, and shipment of internationally traded goods.

For Customs’ part, it bore the responsibility for revamping its own management processes to match the shift in compliance burden onto the backs of American business. Customs was to shift its focus from the transaction-by-transaction approach that had governed its operations since the agency's creation in 1795, to an account-based approach that conformed to the way business conducts business on the cusp of the 21st century. That single theme captured most of the changes in management, business processes, and technological changes expected of Customs.

The challenge posed by the Mod Act in management terms was how well Customs could change the culture of the agency to conform to the new reality it faced, due in large part to the legislation passed by Congress, but more fundamentally in response to the changing nature of international trade and the role it plays in the U.S. economy.

Accordingly, the basic test the Finance Committee oversight process will apply in assessing the Customs Service's performance in its commercial operations will be the extent to which the promise of the Customs Modernization Act has been fulfilled.

B. Enforcement

The objectives of the Mod Act are central to an assessment of Customs' enforcement responsibilities as well. As noted above, one of the main purposes of the shift in compliance responsibilities toward American business was to free resources to focus on the rising challenge of enforcement. That challenge includes not only the enforcement of the customs laws banning the importation of illegal narcotics and other contraband, but the associated activities, such as money laundering, that enable that illegal commerce. In addition, Customs is responsible for the enforcement of a variety of other health and safety measures on behalf of myriad other government agencies.

In that context, the Finance Committee's oversight process must assess the extent to which the shift in responsibilities envisioned in the Mod Act has worked in practice. The oversight process should focus on the Customs Service's efforts to refocus its enforcement activities commensurate with the threats posed by the current commercial environment. The ultimate question is whether Customs has developed the sophistication that mirrors the more highly organized and sophisticated criminal element that threatens our borders. From the point of view of effective oversight, that depends, first, on working with Customs to develop effective measures of performance in the enforcement arena against which Customs actual performance can be judged and, second, on how the Customs Service's current efforts measure up under those standards.

C. Management

The implicit contract envisioned by the Customs Modernization Act is relevant to the basic management functions of the Customs Service as well. The growth in trade, together with the shift in Customs responsibilities, should necessarily have dictated commensurate changes in Customs management practices. Put in stark terms, the Mod Act set out the basic management challenge of whether Customs could run its own operations on par with the industry-best practices it would require of the trade community.

That basic theme plays out in a number of different Customs Service functions. The most salient example is the Custom Service's ability to move to an electronic environment that would actually allow it to interface with American business operating in a highly competitive, cost conscious commercial environment that increasingly depends on just-in-time inventory practices and effective management of internal controls. Absent an ability to conform to the way American business does business in a world of globalized electronic commerce, Customs will not fulfill its mandate under the Customs Modernization Act.

Customs efforts toward the goal of a fully automated commercial environment will necessarily be a principal focus of the Finance Committee's oversight process. That would prove true due solely to the budgetary effects of such a significant capital investment, but the Committee's interest will be driven as much by the ability of Customs automation plans to fulfill its mission as by the absolute numbers that effort may entail.

A more prosaic example of how the Customs Modernization Act should dictate changes in management practices relates to the Customs Service's own system of internal controls. Within the trade community, the shift to "informed compliance" has required a significant dedication of resources to develop internal compliance programs sufficient to ensure compliance with the customs laws and Customs Service regulations and rulings.

The question is whether the Customs Service itself has developed similar self-assessment techniques that would ensure that it is meeting the objectives set out for it by Congress in the Mod Act as well as ensuring it's own compliance with the law. That includes not only assessing whether it is managing its affairs consistent with its central mission, but also whether it has the means credibly to investigate allegations of corruption, discrimination, or other complaints lodged against the agency or its agents.

Included in the Committee's assessment of Customs' management practices will be an analysis of the institutional barriers to implementing and sustaining any needed reforms. Over the past decade, a number of different congressional and Treasury Department reviews, such as the Blue Ribbon Panel have identified Customs' weak internal controls as a particular management failure. Those reviews reflect that, to date, reform efforts, although well-intended, have failed to achieve long-term improvements in Customs management. The Committee intends to examine the causes of that failure. One question is whether frequent changes in leadership have created a negative cycle for Customs management, with each new administration proposing solutions to longstanding problems, but lacking the necessary tools, political will or tenure to consistently implement and sustain changes to both the administration and culture within Customs.

A principal goal of the Committee's oversight will be to provide the present and future Commissioner of Customs with the necessary tools to effectuate and sustain meaningful change. For example, one proposal that has worked in other areas and that deserves the attention of the Committee is whether a tenured Commissioner would provide more independence and continuity for reform efforts, which in turn should create an increased opportunity to successfully address long-standing cultural problems and institutional weaknesses.

II. The Oversight Process

The immediate goal of the Committee's oversight process is a review of Customs Service operations and the establishment of a baseline assessment of the challenges confronting the Customs Service. As a part of that exercise, the Committee expects to identify appropriate performance standards or measures of accountability for both Customs and the Committee to apply in assessing Customs' fulfillment of its mission. That process will highlight issues of substantial interest to the Committee, the agency, and the trade community within the context of the agency’s progress in implementing the provisions of the Customs Modernization Act and the upcoming reauthorization of its budget.

The longer term goal of the proposed oversight process will be to build on the baseline assessment oversight message and the baseline levels of accountability identified in the oversight process. The Committee expects to identify issues which, because of their continued importance in ensuring an effective Customs, will require the committee’s sustained oversight beyond the initial briefings and hearings the Committee intends to conduct during this session of the Congress. Those issues may warrant ongoing oversight by the Committee and in-depth review and monitoring by independent entities such as GAO.

A. Phases in the Oversight Process

The Committee envisions four separate phases in the oversight process. The first phase will entail a series of briefings by Customs and the trade community on issues affecting the performance of the agency's missions. Through those briefings, the Committee expects to identify issues that can be resolved adequately without further focus by the Committee, and those issues that will become the focus of Committee hearings.

That process has already begun and the Committee expects that process to continue through the spring of 1999. Early briefings will focus on a series of management topics that relate to the Customs Service's budget in order to provide a basis for Committee input into this year's budget cycle if possible. Later briefings will focus on the substantive issues raised either by the Committee, the agency, or the trade community.

The second phase -- the Committee's oversight hearings -- will follow the completion of the oversight briefings and be based on information developed as part of that initial phase of the oversight process. The objective will be to focus on those issues of primary importance in establishing effective performance benchmarks and assessing Customs current performance under those standards. The Committee expects to complete those hearings by the summer of 1999.

The second phase of the oversight process will entail preparation of a series of hearings on the three topics identified above -- the Customs Service's commercial operations, its enforcement efforts, and management issues that would reinforce the agency's ability to achieve its two primary missions.

The third phase of the oversight process will involve drafting legislation that draws on the Committee's oversight hearings. The legislation will focus on establishing effective performance standards for future oversight, amending existing laws to provide greater direction to Customs, and provide authorization for any needed new appropriations.

The fourth phase will involve the establishment of a follow up process to conduct future oversight of the Customs Service. The goal would be to work with Customs management in the development of a system of internal controls, including annual performance audits conducted by the agency, that would allow the Committee to maintain more regular contact with the agency on management and other concerns.

B. Sources of Information and Methodology

For each of the areas under review, the Committee will rely on the following sources of information and analyses. The Committee will also consider a limited number of field visits to supplement what can be derived from sources and materials available in Washington.

1. Information Sources

The Customs Service itself will be the source of most of the initial information gathered for review by the Committee. In particular, the Committee wants to consider at the outset any agency plans and strategies (ongoing or planned)--and related performance benchmarks-- already employed by the agency to address issues of interest to the oversight process. The Committee will also look to Customs for budget and funding data; internal policies and procedures for core business functions; legislation and regulations related to programs and issues under review; and personnel, workload, performance/accomplishment data.

The Committee also intends to review materials such as Customs or Treasury Department budget documents, including budget requests and justifications; funding and expenditure profiles; policy and procedure manuals, directives, memorandums; and annual accountability reports. The Committee will also consider material from sources outside of Customs, including General Accounting Office studies, reports by the Treasury Inspector General, consultant reports (e.g., currently available analyses of personnel allocation issues, cost estimates and cost/benefit analyses for Customs' Automated Commercial Environment proposal, and reports on the collection of passenger processing fees). The Committee will also take into account any written submissions by the business and trade community, as well as the National Treasury Employees Union ("NTEU").

2. Meetings and Briefings

The Committee expects to meet with a number of Customs personnel to review the oversight issues identified. Those meetings would include agency officials from cognizant headquarters and field units, including, as applicable, personnel from the Office of Field Operations, Office of Investigations, Office of Strategic Trade, Internal Affairs, and selected Customs Management Centers and ports of entry.

In addition to information from the Customs Service and interviews with Customs personnel, the Committee expects to meet with representatives of other agencies as relevant to the Committee's work. Potential sources may include General Accounting Office, Treasury Office of the Inspector General, and any outside consultants whose views may be relevant on issues of interest to the Committee. The Committee intends to meet regularly with the business and trade community involved in import and export transactions to identify issues of concern to the users of Customs' services that are not currently a part of the Committee's review. The Committee intends to solicit the views of the National Treasury Employees Union on any issues affecting Customs personnel.

3. Options for Visits to Field Work Locations

The Committee intends to arrange site visits to various local Customs Service facilities, such as Customs headquarters, Customs' data processing center in Northern Virginia, and the port of Baltimore, to gain an understanding of basic Customs Service operations. In addition, the Committee will consider whether the oversight process would benefit from site visits to Northern and Southwestern border land ports of entry (e.g., Detroit, Buffalo, San Ysidro, Otay Mesa) and to coastal sea and air ports of entry (e.g., Kennedy, Miami International and LAX; Los Angeles/Long Beach).

III. Oversight Issues and Related Questions

The oversight process the Committee envisions will address three groups of issues linked to the general issues areas identified above -- commercial operations, enforcement, and management concerns. What follows is an overview of issues that the Committee has identified to date as relevant to the Committee's oversight process.

Each issue has several key questions associated with it, which are described in separate sections below. The questions seek to quickly establish a bottom line for each issue and determine whether additional, in-depth work is warranted.

A. Commercial Operations

Customs has traditionally divided its functions between commercial operations and enforcement. The division is somewhat artificial since inspection personnel, which are normally thought of within the agency as part of its commercial operations are also the first line of defense in the agency's enforcement efforts as well. The following discussion nonetheless retains that basic distinction between commercial operations (i.e., all customs issues outside of a specific enforcement context), on the one hand, and enforcement on the other.

As noted above, the central focus of the Committee's oversight efforts will be Customs' implementation of the Mod Act and the concept of informed compliance. That issue drives the review of Customs' automation efforts as well. The questions below reflect that approach.

1. Mod Act Implementation

(1) At the conclusion of the deliberations that led to the development of the Mod Act, Customs established an implementation schedule detailing how and when Customs would complete each aspect of the Mod Act. What percentage of those goals have been completed at this stage, five years after the passage of the Mod Act?

(2) What aspects or elements of the Mod Act have yet to be implemented fully by Customs?

(3) What have been the principal obstacles to completion of Mod Act implementation according to the schedule set by Customs itself?

(4) What is Customs expectation as to when the elements identified in the Mod Act and Customs' implementation schedule will be implemented?

a. Informed Compliance

As noted above, the basic contract between the Customs Service and the trade community embodied in the Mod Act involves two parts. The trade community assumed new responsibility for compliance, while the Customs Service assumed the responsibility for providing the information necessary to comply, combined with regular compliance audits designed to improve the trade community's compliance procedures. The primary source of information flowing to the trade community are regulations and rulings issued by the Customs Service. The initial focus of the compliance review process has taken the form of Compliance Assessment Tests. The following questions address those two facets of the Custom Service's implementation of the concept of "informed compliance."

i. Regulations and Rulings

(1) Testimony before the Finance Committee this past year suggested that there have been significant delays in issuing regulations necessary to implement the Mod Act. For example, it took four years to publish regulations governing the unused drawback provisions of the Mod Act. What has accounted for the delay in providing the guidance to the trade community?

(2) GAO indicates that there have been similar delays in issuing rulings on which the industry depends for practical guidance on how the governing statutes and regulations should apply. What accounts for the delay in the issuance of rulings?

(3) What steps, if any, is Customs undertaking to eliminate those obstacles to issuance of Mod Act-related regulations?

(4) There have been ongoing expressions of concern regarding the potential misuse of the rulings process as a tool of achieving trade policy objectives, rather than an objective reading of the facts and law presented in a particular ruling request. What steps does the Customs Service take to ensure that its rulings are consistent with both Congress' intent and U.S. international trade obligations when issued? Is there a formal review process within Customs and/or between Customs and Treasury on questions raised by particular rulings? Does the Customs Service regularly seek the advice of other U.S. government trade agencies and/or international organizations, such as the World Customs Organization, on relevant issues? Does the Customs Service regularly conform its interpretation to that of the appropriate international standards whenever applicable?

ii. Compliance Assessment

(1) The Customs Service successfully initiated a series of intensive compliance audits of particularly significant importing industries under the rubric of Compliance Assessment Tests as part of its implementation of the Mod Act. Based on the experience to date, what did Customs find to be the overall level of compliance among the trade community surveyed?

(2) Did Customs identify particular problem areas in compliance terms that require further attention in the future by the individual companies and, more systematically, by Customs to improve the overall level of compliance?

(3) Testimony before the Finance Committee suggested that there have been significant delays in closing out the CAT reviews, which defeats their purpose. What is the average length of time Customs has taken to complete CAT reviews? What has accounted for the delays in completing the CAT reviews?

(4) Has Customs conducted specific training for its auditors in how to conduct internal compliance audits? Has Customs hired additional personnel familiar with corporate compliance programs to assist in the development of audit modules and offer assessments of the CAT review process?

b. Classification and Valuation

(1) As part of its implementation of the Mod Act, Customs' compliance assessment standards require over 90 percent accuracy in the classification of goods. According to testimony before the Finance Committee, however, Customs has failed to provide timely advice and guidance regarding the classification of imported goods under the Harmonized Tariff Schedule of the United States ("HTSUS"). Has Customs done anything to improve its response time in providing advice on classification matters?

(2) Has the Customs Service examined means for simplifying the current HTSUS to eliminate unneeded categories? What obstacles would prevent simplification at this stage? Would international negotiations and/or legislation be required?

(3) Importers, under section 1059A of the Internal Revenue Code, are obliged to reflect the same value for cost of goods as that used for customs purposes when entering the goods into the United States for consumption. In recent years, that requirement has created practical difficulties for importers and taxpayers that are obliged to establish transfer prices for related party transactions according to Internal Revenue Service regulations implementing section 482 of the Code or, alternatively, through negotiation of an Advanced Pricing Agreement with the IRS. That approach can create unintended conflicts between the values stated on customs forms on an entry-by-entry basis as opposed to those established under IRS rules for tax purposes. Has Customs done anything to address those conflicts? Can the potential conflicts be addressed administratively? Or, would they potentially require changes to the World Trade Organization's agreement on customs valuation or legislative action to resolve such conflicts?

c. Duty Drawback

(1) Under the Mod Act, Customs was obliged to provide timely advice to the trade community regarding customs matters in order to permit the trade community to live up to its obligation of "informed compliance." That obligation to provide timely advice regarding customs matters extends to the area of duty drawback as well. However, testimony before the Finance Committee indicates that many U.S. importers have been waiting extraordinarily long times to receive advice on drawback matters. What accounts for the delay in the issuance of drawback rulings? What has the Customs Service done to address the problem?

(2) One area that has prompted particular comment is the Customs Service's definition of "commercial interchangeability." Customs delay in issuing rulings establishing a definitive Custom Service interpretation of the term has, according to testimony before the Committee, had a chilling effect on the use of the drawback provisions, which is contrary to Congress' intent in amending the unused merchandise drawback provisions of the Customs laws as part of the Mod Act. The lack of any decision also prevents U.S. companies from exercising their rights under the law to challenge the Customs Service's interpretation in the courts. Are there particular obstacles to issuing the drawback rulings? What accounts for the significant delay in their issuance? Has Customs taken any steps to eliminate the backlog of drawback ruling requests? What steps does Customs intend to take in the future to eliminate any recurrence of the problem?

d. Reconciliation

(1) The Mod Act provided for added administrative flexibility in the form of a "reconciliation entry process" that was designed to permit a single reconciliations entry covering up to 15 months worth of individual transactions to correct minor errors and/or to address more substantial issues, such as establishing an accurate transaction value when unavailable at the time of entry of the goods into the customs territory of the United States. The implementation of that process is still not complete. What has accounted for the delay in implementation of the reconciliation rules?

(2) Customs conducted a pilot reconciliation program to test its procedures. What lessons did Customs draw from that pilot program? Did they result in changes to the reconciliation process as originally conceived?

e. Account-Based Management/Remote Entry Filing

(1) Another part of the shift in Customs management engendered by the Customs Modernization Act was the shift toward account-based management of an importer's dealings with Customs. Consistent with that model of account-based management, the Mod Act also sought to encourage filing of entry documents from a single location, rather than separate filings at each individual port on each shipment. What progress has Customs made in implementing account-based management and the remote entry filing systems? What are the principal obstacles to its full implementation and potential expansion?

(2) Has the shift toward account-based management and remote entry filing resulted in increased efficiency, as planned? What steps are needed to improve Customs ability to expand the programs? Would legislative action be required?

2. Personnel Allocation

According to GAO, Customs does not have a systematic, agency-wide process for assessing the need for and allocation of personnel to process commercial cargo and air, land, and sea passengers entering the United States at over 300 ports of entry. As a result, Customs has not determined the appropriate personnel levels for each of its ports and for each of its processing functions (e.g., inspecting passengers and cargo). Customs has responded to GAO’s conclusions and recommendations by tasking consultants to improve its personnel allocation process.

Based on the previous work of the Committee, the oversight process must address not only the Customs Service's process for identifying the number of inspectors needed and their proper allocation, but also the number of agents, import specialists, and other support personnel required to staff Customs' operations.

(1) Customs retained the services of outside consultants to review its methods of establishing staffing levels and the allocation of personnel. What were the consultants’ findings and recommendations related to the personnel allocation issue? On what basis were the findings and recommendations developed? Did they, for example, and to what extent, take into account flow-of-traffic issues and any efficiency gains from Mod Act requirements?

(2) To what extent does Customs agree with the consultants’ findings and recommendations? What is Treasury’s position on those findings and recommendations?

(3) If Customs does not agree with the findings and recommendations, explain why and what, if anything, it proposes to do instead.

(4) If Customs agrees with the findings and recommendations, how does it plan to implement them? What is the implementation plan and schedule, including key milestones, and what are the related costs? How does Customs propose to fund these costs?

(5) What impediments does Customs expect to encounter when implementing the recommendations? How does Customs propose to address impediments, especially if the recommendations involve either moving inspection personnel among ports or requesting additional personnel?

(6) Is Customs planning any inspection personnel initiatives (redeployment of existing personnel, requests for additional personnel) for fiscal year 2000 and beyond? If so, what are these initiatives, what is their purpose (enforcement or commercial operations), and what are related costs.

(7) To the extent that Customs requests additional inspection personnel after having assessed its needs in light of criteria recommended by outside consultants or in response to shifts in the commercial or enforcement environment, how many agents must be added to the enforcement side of Customs operations in order to support the additional inspection personnel? How should those additional agents be allocated?

(8) Does the addition of new inspection personnel require any other additions to Customs personnel serving in support roles, such as import specialists? Given the increased case load that adding inspectors will create, will the Customs Service also need to add new special agents to process the additional enforcement actions? On what basis, does Customs calculate the number of enforcement agents needed currently and the number that would be needed if new inspectors are added?

(9) What opportunities exist for shifting personnel from current functions to address new inspection and enforcement needs? What cost savings would that create?

3. User Fees

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) allows Customs to collect user fees for providing various services to passengers and conveyances. User fee revenues are used to fund (1) Customs overtime and preclearance costs and (2) additional inspectors and related equipment specifically to process passengers and cargo at certain ports.

a. General

(1) Given that the Administration proposes to cover approximately one-quarter of the Customs Service's budget from existing or new user fees, how does Customs propose to cover any potential revenue shortfalls, if projections do not materialize or if the user fee proposals do not pass?

(2) What are the plans for the user fees included in the Administration's budget proposal beyond fiscal year 2000? Are they a "one time" proposal?

(3) Has Customs implemented any measures to ensure that revenues from user fees already in place are identified, collected, and transmitted properly?

(4) What is the methodology for establishing the amount of each user fee collected by Customs? If the fee amounts are established through legislation, what is the extent of Customs’ input--do the fees represent activity-based costs for providing a service? To what extent, if at all, do costs for providing a service vary from port to port? Are variances accounted for in any manner when establishing the fee amounts?

(5) Has Customs considered reforming the user fee structure in general, including the merchandise processing fee? If so, what were/are some recent proposals--rationale, objectives, highlights, outcomes?

b. Merchandise Processing Fee

Customs collects a merchandise processing fee on all imported merchandise. The fee is supposedly commensurate with the value of the services offered by Customs to importers. Under U.S. World Trade Organization obligations, the fee must be commensurate with the services Customs provides. The fees collected currently become general revenue for the government's use. Customs has, in the past, proposed dedication of the MPF funds for Customs-specific uses, including payment for automation.

(1) What is the total amount of fees collected annually through the MPF?

(2) How does Customs determine the value of its services? How does the current structure and amount of the fee relate to the value of services rendered? Is the current amount of the fee justified by Customs' analysis of the value of services provided?

(3) Does Customs or the Treasury currently propose to dedicate MPF funds to Customs-specific uses? If so, how would Customs or the Treasury justify any portion of the fee related to capital investments or other uses not directly related to the provision of services to inbound passengers or importers?

c. Passenger Processing Fee

Customs collects a passenger processing fee on all persons entering the United States by air or sea. Entries by land borders are exempt. In addition, current law exempts passengers entering from Canada, Mexico, and the Caribbean by air and sea. That exemption was lifted for a period of four years to provide offsetting revenues needed to pay for (in budget terms) reductions in tariff revenue due to the implementation of the North American Free Trade Agreement ("NAFTA"). The exemption was restored in 1997 with the lapse of the provisions of law assessing the NAFTA-related fees.

Passengers entering by air or sea that are not exempt currently pay a fee of $5, which is collected by the airlines and ships providing passage and is then forwarded on to Customs. Those funds are then made available to offset the expense of providing passenger processing services. The funds collected generally exceed the expense of processing passengers by some margin.

The Customs Service has adopted an interpretation of the applicable statute that, in Customs' view, prevents the use of revenues collected from the passenger processing fee to provide services to passengers that are exempt from the fee. That has led to proposed cuts in services for processing passengers arriving, for example, by sea from the Caribbean, Mexico, and Canada and the proposed elimination by Customs of pre-processing services provided in various ports of disembarkation in Canada, Bermuda, and the Bahamas for passengers bound for the United States.

(1) On what basis does the Customs Service determine the value of the "services" provided to passengers entering the United States?

(2) On what basis does Customs determine that revenues collected from passenger processing fees may not be used for processing passengers entering the United States from exempt destinations?

(3) Does Customs envision the elimination of all passenger processing services for persons exempt from the fee as a result of its interpretation of the governing statute restricting the use of the passenger processing fees solely to those passengers paying the fee? If not, on what basis will those services for processing persons exempt from the fee continue to be provided?

(4) Has Customs, as requested by the Committee, developed any proposals for rationalizing the structure of the passenger processing fees and the restraints Customs' perceives on the use of the revenues that flow from the collection of those fees?

d. Proposed Automation Fee

For fiscal year 2000, the President is proposing establishing a user fee for accessing Customs’ automated systems--revenues from this fee are to be used to offset system modernization costs. In the past, Customs has faced challenges in identifying and collecting all the fee revenues due.

(1) What is the rationale behind raising the passenger fee and establishing a system access fee? Is the cost commensurate with the value of the service provided? Is the fee intended to fund a capital investment, rather than offset the cost of services currently provided to users of Customs' databases?

(2) Would the benefits to Customs and the general public from modernization of Customs current computer systems extend beyond those benefits that would accrue directly to users accessing Customs' databases? If so, should the investment in new capital equipment represented by improvements in Customs automation be paid for out of general revenues, rather than a fee?

(3) How were the revenue projections from the increased and new fees, respectively, developed (assumptions, inputs, etc.)? Were the projections independently validated?

(4) Where will the revenues from the new system user fee be deposited (existing user fee account) and disbursed?

4. Customs Automation Proposals

In part driven by the terms of the Mod Act, Customs has developed proposals to upgrade its automated handling of information on both imports and exports. The following questions addresses each in turn.

a. Development of Automated Commercial Environment (ACE)

Customs is currently developing an information technology system known as the Automated Commercial Environment (ACE) to replace Customs' current system. The basic function of the current system and of ACE, if it becomes reality, is the processing of all goods and merchandise imported into the United States.

The objective is to provide an integrated automated information system to efficiently collect, process, and analyze commercial data that meets the current and future needs of both Customs and the trade community. In that respect, ACE would help fulfill one of the basic goals of the Customs Modernization Act, which is to provide the automation support for the redesigned trade compliance process called for by the Act.

Customs has spent approximately $60 million of an estimated project cost of $1.04 billion. Recent decreases in and restrictions on funding have led Customs to consider terminating contracts with technology firms assisting in the development and implementation of ACE. The potential delays have created concern within the trade community regarding their role in development and underwriting of the system through additional fees.

(1) What is the operational status of the current ACS? Is it adequate to address the current flow of information filed with Customs relating to goods imported into the country? Does the ACS offer the flexibility to meet the added information processing requirements envisioned by the Customs Modernization Act and the changes in Customs operations the Act implies?

(2) How much longer can ACS continue to function to perform the basic data collection required to process imports into the United States? Is it possible to upgrade ACS to accommodate current data loads and Customs management responsibilities, rather than adopting an entirely new systems architecture? If so, how much would that cost?

(3) What concerns have been raised by the trade community with respect to the current ACS and any attempts to upgrade, rather than replace, it? Has the trade community raised concerns with respect to Customs ACE proposal, apart from the method of funding?

(4) According to GAO, Customs has yet to complete an architecture to guide and constrain the millions of dollars it spends annually to develop and acquire new information systems and evolve existing ones. GAO also feels that Customs does not have the organizational maturity to develop or acquire the complex software necessary for this project. GAO has questioned the previous ACE cost estimate and cost-benefit analyses due to the unreliability of long-term estimates. According to the new analyses being done in response to GAO’s concerns, what benefits would flow from employing ACE compared to the current ACS or other alternative systems and how significant would those benefits be?

(5) Have there been any other alternatives considered to ACE other than ACS?

(6) Customs has espoused an incremental development for the system. What factors determined the order of priority for developing and integrating the system?

(7) How does Customs plan to achieve the information technology maturity level necessary to successfully develop and implement a project of this magnitude?

(8) Customs has indicated that current hardware and software have aged and funding has not kept pace to enable Customs to maintain an up-to-date system. If true, what are the risks of a potentially catastrophic failure of the system and what are the immediate remedies available to address such a failure? In the longer term, what obstacles must be addressed to ensure that Customs can implement ACE or an alternative on an expedited basis?

(9) What assurances are there that a similar situation will not be repeated for ACE?

(10) Customs has stated that it is using current best practices in development and implementation--what are the Customs, Treasury, private sector, or other source guidelines Customs is following?

(11) Customs is currently conducting a pilot project for companies that have employed the ACE concept. What has been the experience of those companies? Have they offered any formal evaluation of the project? What improvements, if any, would they suggest?

(12) Has Customs solicited the views of the trade community more broadly than the limited group participating in the ACE pilot project? If so, have the members of the trade community in general provided any formal statement of their needs and/or a preferred timetable for the implementation of a new system? What has the trade community suggested in terms of funding for the capital improvements involved in implementing ACE or some alternative?

b. Development of the Automated Export System

Customs has faced continuing complaints from exporters regarding the implementation of the Automated Export System or "AES." Those criticisms focus mainly on what the trade community perceives as an unwillingness to conform Customs information gathering practices and procedures under the AES system to the way in which international enterprises conduct their business.

(1) What have been the principal problems specifically identified by the trade community with respect to the implementation of the AES and what has Customs done to address those questions?

(2) The GAO has suggested that the AES is unlikely to yield improvements in data collection or in enforcement of the U.S. export control laws, for which Customs shares principal responsibility. What will AES do to address the problems identified by GAO, such as the high rate of error it discovered in the completion of shipper's export declarations that are the basic information gathering tool relied upon by Customs in implementing the AES?

(3) Has AES offered Customs any improvement in its ability to analyze or evaluate the risk of export shipments? What has that improvement, if any, yielded in the way of improved enforcement?

(4) What fraction of the exporting community is currently using AES? What is Customs doing to improve participation in AES by exporters, shippers, freight forwarders, and carriers?

5. Deployment of Non-Intrusive Inspection Technology

Customs has recently begun implementing a five-year technology plan which includes x-ray, gamma-ray and other forms of non-intrusive examinations. The plan has focused its efforts on the Southwest border, with more limited resources being deployed at large seaports.

(1) How does Customs determine the need for new technology? How does it develop concepts for technological improvements? On what basis does Customs determine where the technologies should be employed?

(2) How will the non-intrusive technology currently under review help in facilitating trade and/or the enforcement, particularly enhancing Customs ability to perform its functions as part of the national strategy to combat the sale and distribution of illegal narcotics? How does Customs propose to measure the effectiveness of the technology deployed--are there any performance measures forthcoming?

(3) Is the focus on the Southwest border leaving smuggling avenues open on the Northern border, seaports and airports? Has Customs developed any strategic plan for the implementation of non-intrusive technologies? Is there currently any analysis of how the new technology will be employed at various ports and what share of the distribution would go to Florida and Atlantic seacoast ports, Southwestern border points, or Northern border land crossings? At what point will the Northern border and the major seaports receive this technology?

(4) What type of cost-benefit analyses and research, development and testing takes place before the technology equipment is purchased and deployed? To what extent are results evaluated before deployment? How does Customs assess the effectiveness of its equipment and has such an assessment been done to date of the non-intrusive technologies Customs would now like to employ on a broader basis?

(5) There have been reports in the press suggesting the reluctance of passengers to consent to the use of the new, non-intrusive technology. What accounts for their refusal? Does the response of passengers to the technology currently employed suggest alternatives either in technology or in its employment that would allow Customs to reduce the reluctance of passengers to consent to use of the new procedures?

B. Enforcement

Five issues stand out in terms of the Congress' interest in the enforcement area. The first, and most important relates to the standards Customs applies to set enforcement goals, measure performance and assess enforcement needs. The second relates to management of the Treasury Asset Forfeiture fund. The third relates to the Customs Service's current program of air and marine interdiction and Customs' proposals for increases in those areas to reinforce their enforcement efforts generally. The fourth relates to the Customs Service's program for preventing transhipment of textile products subject to quota. The fifth relates to Customs performance of its responsibilities under section 307 of the Tariff Act of 1930 with respect to the investigation of instances of forced or indentured child labor.

1. Enforcement Goals and Performance Standards

Customs has been criticized in recent years for lax enforcement of the customs laws, particularly as they relate to the illegal importation of narcotics. At the same time, concerns have been raised about the extent to which the Customs Services' enforcement efforts overlap with those of other agencies and the extent to which Customs could achieve better performance if it concentrated its efforts on the targets within the core of its jurisdiction and competency. What both of those critiques have underscored is the need for identifying concrete goals in the enforcement area that are squarely within Customs' competence and performance standards that will offer a realistic assessment of Customs ability to achieve its enforcement objectives.

(1) How does Customs establish specific enforcement targets? What factors in the enforcement environment determine the allocation of Customs enforcement assets?

(2) How does Customs measure its performance in the enforcement area? How do those standards vary depending on the enforcement objective?

(3) Are the enforcement performance standards integrated with Customs' assessment of its personnel and operational needs? If so, how?

(4) Has Customs assessed the extent to which its enforcement jurisdiction overlaps with that of other agencies and what efficiencies might be gained by concentrating on those enforcement targets solely within Customs jurisdiction and competence? Does Customs take into account the potential overlap of jurisdiction with other agencies in fixing its enforcement objectives and assessing its enforcement needs?

(5) What conclusions has Customs drawn from the agency's experience with different programs targeting particular types of illegal activity, such as Operation Casablanca, Operation Hard Line, and Operation Brass Ring? What limitations or obstacles did Customs confront in implementing those enforcement strategies? How should those limitations or obstacles best be addressed? Is legislative action required?

(6) Testimony before the Finance Committee suggested that Customs has achieved significant successes through cooperative programs with the trade community that enlist the importers, shippers, freight forwarders, and carriers in "industry partnerships," such as the Business Anti-Smuggling Coalition. What lessons did Customs learn from the initial industry partnerships? What can be done to expand such cooperative programs? Would legislative action be required or can Customs expand such programs under existing statutory authority?

2. Asset Forfeiture

Justice and Treasury--in similar but separate programs--manage a reported $1.8 billion in seized and forfeited property. Customs is responsible for managing Treasury’s asset forfeiture program. GAO and Treasury’s Inspector General have in the past reported, among other things, material weaknesses in the accountability and reporting over seized and forfeited property. As a result, asset forfeiture remains a "high risk" issue for GAO in 1999.

(1) What steps has Customs or Treasury taken to address the weaknesses identified by GAO and Treasury? What has Customs and/or the Treasury sought to achieve and what have been the results of these steps?

(2) What have Customs or Treasury found to be the principal impediments in implementing corrective steps?

(3) GAO has reported that Customs has recently lacked the funding to undertake or complete some of its key corrective actions, such as upgrading existing storage facilities and constructing new ones and installing security devices. What is the reason for the shortfall? Were funds requested by Customs and the Treasury as part of the Treasury's budget requests? Is the program a priority for Customs and the Treasury?

(4) At the time the Finance Committee proposed the Treasury Asset Forfeiture Fund in 1992, Treasury and the Justice Department agreed to establish a high-level interdepartmental working group to identify and resolve any inconsistencies that may exist in the forfeiture activities of any Federal law enforcement agencies. The Committee indicated, in report language accompanying the establishment of the Treasury fund, that it expected periodic reports on the actions of the working group. To date, no reports have been provided. What actions has the working group taken in response to the request of the Committee?

3. Air and Marine Interdiction

The Customs Air and Marine Interdiction Program has three principal missions: (1) the interdiction of illegal drugs being smuggled by plane or boat into the United States (2) support for other Customs offices and federal, state and local law enforcement agencies and (3) the conduct of foreign counternarcotics operations. The source and transit zone missions are conducted in conjunction with the Coast Guard and the Department of Defense as part of the ONDCP counterdrug strategy. The program has experienced decreased funding from fiscal years 1992 to 1997, which resulted in less aircraft, pilots and takeoffs. In fiscal year 1999, Customs received emergency supplemental funding of $176.6 million which included the acquisition of 6 P-3 aircraft and the return of 3 Black Hawk helicopters into service.

(1) What effect does the large increase in funding have on the interdiction program? How are funds provided allocated between the acquisition of new equipment (e.g., capital costs) and the continuing costs of maintenance and repair of existing air and marine assets?

(2) GAO has concluded that the performance measures in place are not providing an adequate assessment of whether the program was producing desired results. How is Customs responding to this issue?

(3) Has there been a commensurate increase in funding for the salaries and expenses for pilots to fly the additional aircraft?

(4) How does Customs’ "source and transit zone" effectiveness compare with the Coast Guard’s and Department of Defense’s? Is there any overlap and/or duplication of effort between the Customs' air and marine interdiction efforts and the programs of other agencies?

(5) Will there be changes in objectives or strategy due to the increased funding?

(6) What would be accomplished with consolidated maintenance and operations sites?

(7) Has Customs conducted an assessment of its air and marine assets and any need for additional resources in the Caribbean and the Southwestern and Northern borders? If so, what were the results of that assessment? How flexible are Customs’ assets in responding to smugglers moving their operations from the Southwest Border to the Gulf of Mexico? What flexibility does Customs have in moving assets between the Northern and Southwestern borders?

(8) What were the causes behind the funding decreases during fiscal years 1992 to 1997? What effect did they have on the interdiction mission? What are the effects of inconsistent levels of funding on the effectiveness of the program?

3. Textile Transshipment

Under the Uruguay Round Agreement on Textiles and Clothing, the United States will, until 2005, continue to maintain quotas on imports of textile and apparel products. A significant share of the responsibility for enforcing those restraints falls on the Customs Service. The quotas have led to pressure to evade the restraints by transshipping products manufactured in one country subject to quota through a country not currently subject to quota or with sufficient quota available and then passing the goods off as if they had originated in the second country for quota purposes.

The textile and apparel industry is likely to face significant pressure for adjustment as a result of the phased-in elimination of quantitative restraints called for by the Uruguay Round agreement. Strong enforcement of the existing restrictions is necessary to afford the industry the opportunity for adjustment provided for in the agreement. Accordingly, the Committee wants to ensure that Customs has the tools needed to enforce the existing restraints and eliminate the opportunity or avenues for transshipment.

(1) Has Customs or any other agency done a recent assessment of the level of transshipment? Has Customs identified particular locations as problems in transshipment?

(2) What efforts has Customs undertaken to address the problem of illegal transshipment of textile and apparel products? Has Customs sought and received the cooperation of other U.S. government agencies and/or foreign governments in combating transshipment? What has been the results of Customs efforts?

(3) Is any further legislative action necessary to augment Customs efforts and improve the prospects for vigorous enforcement of existing transshipment rules?

4. Child Labor

In successive appropriations to Customs, Congress has underscored that forced and indentured child labor falls within the scope of section 307 of the Tariff Act of 1930. Section 307 authorizes Customs to investigate claims that goods imported into the United States have been made with forced labor. In the most recent appropriations for fiscal year 1999, Congress included an appropriation of $2 million to Customs specifically for the investigation of allegations regarding the use of child labor in the manufacture of goods sold for import into the United States.

(1) Has Customs conducted an assessment of its efforts to date in investigating claims of imports manufactured with child labor? If so, what were the results of that assessment?

(2) Based on its recent experience investigating claims of the use of child labor in the manufacture of goods imported into the United States, how frequently were the claims verified? Did the Customs Service identify particular obstacles to their verification?

(3) In conducting its investigations, did Customs receive the cooperation of other U.S. government agencies and/or foreign governments? What role did the importing community play in facilitating Customs' investigations? What further role could the importing community play in the future in assisting Customs' efforts to investigate claims regarding child labor and ensure adequate enforcement of the provisions of section 307?

(4) How does Customs intend to make use of the $2 million appropriated for in the fiscal year 1999 budget for expanding the Customs Service's investigations of child labor claims? Has Customs developed a strategic plan for addressing the problem of child labor and the role that the additional appropriations might play in that process?

(5) What other legislative action might improve Customs' ability to enforce the provisions of section 307?

C. Management

The Customs Modernization Act not only altered the responsibilities Congress asked Customs to assume, it also implied significant changes in how Customs managed its own affairs. The following questions are, as a consequence, designed in part to explore the extent to which Customs has followed through on its commitments to change the way it operates and manages its own affairs. The questions are also designed to address concerns that have been raised as a part of the Committee's initial inquiry into Customs management practices and those that have been raised publicly with respect to certain personnel and management issues.

1. Management Practices

Concerns have been consistently raised in past reviews of Customs management practices that the culture that exists at Customs frustrates the agency's ability to effectuate meaningful reform and meet performance goals. The following questions will help the committee to identify the barriers that have prevented Customs effective functioning and implementing needed changes.

(1) In its most recent effort Customs has proposed extensive agency-wide change, detailed in the 1999 Action Plan. Are there any links between the Action Plan and Customs' Strategic and Annual Performance plans? What steps are planned to ensure the sustainability of Action Plan "solutions" in the long term? For example, will there be follow-ups to address action areas where success was not achieved to the extent sought? Will the actions be evaluated to determine their success, and how? Are there any benchmarks and time frames to measure success? Will there be a report or some other forum through which to discuss Action Plan results?

(2) Has Customs identified any barriers to implementation, both internal and external (i.e. NTEU, MSPB, Treasury Department-wide policy and budgetary constraints)?

(3) What additional management tools does Customs envision it will need to accomplish full implementation of reforms, such as those detailed in the Action Plan? Will that step require legislative action by Congress to provide or allow for the use of such management tools or practices?

(4) Who is in charge of overseeing the Action Plan's implementation within Customs? Is there an "Implementation Committee," like the one overseeing the OPR report?"

(5) Are the areas or practices slated for reform prioritized in any manner with commensurate commitment of resources? How were the action areas identified? What is the estimated cost of the proposed actions?

(6) To what extent would giving the Commissioner a fixed tenure contribute to Customs' ability to implement needed reforms? Are there other potential structural changes that would reinforce the Commissioner's ability to make needed reforms?

(7) Are there other changes in the agency's structure that would help reconcile Customs' dual roles of trade facilitation and enforcement?

2. Internal Controls

Customs has consistently faced challenges in the area of internal controls. These challenges primarily involve strengthening controls related to (1) the assessment and collection of revenues (see also "user fee" issue), (2) the access to sensitive automated financial and law enforcement data, (3) the completeness and reliability of core financial information, and (4) the programs--such as "Line Release" -- used to process "low-risk" cargo shipments. Strong internal controls can serve as facilitators for improved and reciprocal compliance by Customs and the business/trade community it serves.

(1) What weaknesses has Customs or other agencies such as GAO identified with respect to existing internal control programs? What actions has Customs taken to address the internal control weaknesses identified?

(2) What has Customs sought to achieve (e.g., measurable objectives) with these actions and to what extent have they been successful?

(3) What impediments has Customs encountered in its efforts to strengthen internal controls? How has Customs sought to overcome these impediments?

(4) Are there "lessons learned" or "best practices" for Customs to implement from the business/trade community’s experiences in its attempts to comply with Customs’ mandates?

(5) Has Customs, in the process of its Compliance Assessment Team ("CAT") reviews of importers, developed any assessment of how the strengths it found among private sector internal control programs might prove relevant to the reform of Customs own internal control programs? For example, does the Customs Service develop annual performance benchmarks that might serve as the basis for an annual compliance audit? Is there an existing audit function (the equivalent of a corporate controller) capable of assessing Customs compliance and performance against those benchmarks? Does the Customs Service conduct an internal compliance audit done on an annual basis as is common in the private sector?

(6) Does Customs require additional legislative authorization to improve Customs' performance with respect to developing and implementing effective internal controls?

3. Personnel Management and Disciplinary Process

In December 1998, a Miami Herald newspaper article detailed alleged extensive misconduct and disciplinary problems within Customs. The information reported in the Miami Herald article related to misconduct dates back to the 1980s. Specifically, the article alleges misconduct in the form of sexual harassment, drinking alcohol while on duty, and improper relationships with informants and potential defendants. The disciplinary issues include sanctions issued, which allegedly often (1) discriminate between higher- and lower-level employees and (2) fall short of prescribed agency guidelines.

Concerns have been raised about the manner in which Internal Affairs conducts its investigations, namely their thoroughness and timeliness, and staffing and rotation policies. Customs is currently compiling Internal Affairs documentation related to allegations, investigations and ultimate disposition. The Treasury OIG is in the process of reviewing the Internal Affairs operating procedures and determining if proper actions were taken in the Miami allegations. The Treasury OPR has conducted a review of Internal Affairs which is currently in draft form.

(1) Does the Customs Service maintain data on trends in the number and type of allegations, whether of integrity issues, EEO complaints, or complaints regarding sexual harassment? If so, what trends has the Customs Service seen in such cases and what steps has the Customs Service taken to address those trends as they were identified?

(2) Is there a particular office that is responsible for assessing Customs’ own internal compliance with integrity standards, legals standards governing employment, and allegations of harassment? If so, what has been its role in addressing concerns in these areas as they have arisen?

(3) Does Customs provide any form of mandatory training for integrity, EEO, and sexual harassment? If so, who performs such training and is the training integrated into personnel management systems in order to ensure that augmented training is an essential precondition to promotion of Customs' personnel to progressively higher pay grades and levels of management responsibility?

(4) Is there a disparity between different offices within the agency and between grade levels concerning the administration of disciplinary action?

(5) To what extent is Customs tracking, managing, and investigating allegations of misconduct against employees?

(6) If it is found that Customs Internal Affairs has inadequate control over misconduct, discipline and similar issues, has Customs conducted any assessment of the impact of recurring instances of such misconduct on its personnel and their workplace environment? If so, what were the results of that review?

(7) What external factors, such as civil service provisions which regulate disciplinary action, impact Customs management’s ability to effectively manage the agency? Would the necessary changes require legislative action, or could they be accomplished administratively?

(8) How does Customs compare to other Treasury law enforcement agencies in terms of the number of EEO complaints? What accounts for any disparities, particularly if Customs faces a significantly higher number of EEO charges?

(9) What processes are in place and what changes are anticipated related to Internal Affairs personnel management (recruitment, retention and rotation) which could enhance its effectiveness?

(10) Are there areas other than integrity, EEO complaints, or allegations of sexual harassment that Customs has identified as particular management problems? If so, has Customs developed a strategy for dealing with those problem areas as well as the areas of integrity, EEO, and sexual harassment?

4. Overtime Pay/Work Rules

(1) During Congress' deliberation in the 105th Congress over legislation authorizing additional appropriations for the Customs Service, concerns were raised regarding the existing policies for overtime pay. At that time, Customs indicated it would attempt to address those concerns with its employees within the framework of the current collective bargaining agreement. What progress has been made in reforming the system of overtime pay to ensure that it reflects the actual overtime hours worked? Is legislative action necessary to reform the existing rules governing overtime pay?

(2) Concerns were also raised regarding the extent to which existing work rules might hinder Customs accomplishment of its enforcement goals or its proposals for reinforcing integrity standards within the agency. To what extent, if at all, do current work rules hinder Customs' achievement of its enforcement objectives? What improvements might improve Customs ability to maintain the highest standards of integrity? Would legislative action be required?