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Washington Outlook Archive

Senators Seek Customs Reforms

James A. Morrissey, Washington Correspondent

The Chairman of the Senate Finance Committee and Ranking Republican member have introduced Customs reform legislation designed to curb illegal imports and facilitate legitimate trade. In introducing the legislation, Chairman Max Baucus, D-Mont., and Chuck Grassley, R-Iowa, said Customs officials have not focused sufficient resources on their dual mission of trade promotion and enforcement of US trade laws. "Our bill will give the agencies the resources and tools they need to better enforce our customs and trade laws so legitimate goods enter our country quickly and harmful goods say out," Baucus said.

The senators were echoing sentiments of textile and apparel manufacturers and importers who feel current practices are falling far short of what needs to be done.

The Customs Facilitation and Trade Enforcement Reauthorization Act of 2009 fully authorizes the US Customs and Border Protection agency (CBP) and the Immigration and Customs Enforcement agency (ICE) - which currently exist only as a function of the Homeland Security Act - and requires each agency to "prioritize" customs enforcement and trade enforcement missions. It creates two new high-level positions whose responsibilities will be to upgrade enforcement and trade facilitation.

The bill requires CBP and ICE to prepare a biennial, joint strategic plan outlining the agencies' plans to improve customs-related trade enforcement. It also  directs CBP to develop new technologies to better target cargo that may violate US trade laws and improve customs facilitation at US ports. It expands existing law to prohibit the importation of goods made with forced, convict or indentured labor.

On the trade promotion side, the bill requires Customs to identify concrete trade benefits, and it establishes a new Customs Facilitation Partnership Program that provides trade facilitation benefits for entities that have a history of complying with US Customs and trade laws. It also authorizes additional funding to modernize Customs date collection and evaluation.

As the legislation moves through the hearing process, importers and manufacturers will be pressing their own agendas for improvement.

At a recent congressional hearing, Cass Johnson, president of the National Council of Textile Organizations, called for stronger enforcement, saying the textile sector attracts more fraudulent activity that any other industrial sector. He said the problem is particularly acute with respect to the preferential trade agreements in which non-participating countries are undercutting the benefits of those programs. Calling this a "new type of fraud," Johnson said, "this type of trade involves using Chinese and Pakistani yarns and fabrics instead of US or regional yarns and fabrics (which are mandates under such agreements) and then exporting the final apparel products duty-free to the United States."

Johnson called on Congress to provide more funding for additional staffing, better training of Customs officials and a sharper focus on textile and apparel trade problems. He also urged Congress to provide Customs with more tools, including an electronic product verification system and more authority to seize goods that are imported falsely.

Importers, pleased with the legislation's increased emphasis on promoting legitimate trade, will be suggesting ways to facilitate a freer flow of trade.

August 25, 2009