INDUSTRY PRESSURES CONGRESS FOR ACE FUNDS AND IMPORT REFORM

INDUSTRY PRESSURES CONGRESS FOR ACE FUNDS AND IMPORT REFORM    Representatives from some of the country’s largest import industry groups have asked leaders of the House Ways and Means Trade Subcommittee to throw their full support behind increasing funds to develop Customs’ future computer system and reforming the U.S. import process.
   So far, President Bush’s proposed fiscal 2002 budget includes $130 million for development of the agency’s Automated Commercial Environment. The same amount was allocated to ACE last year.
   “Although $130 million is a start, at this funding level it will take over 14 years to fund the $1.3 billion Customs estimates will be needed to build a fully operational and efficient system,” said Ronald Schoof, customs and export regulation administrator for Caterpillar and chairman of the Joint Industry Group.
   Last week, the House Appropriations Subcommittee on Treasury, Postal Service and General Government increased the proposed ACE budget to $300 million for fiscal 2002. “This level of funding now puts ACE development back on its original four-year development plan,” Schoof said.
   But the executives warned lawmakers that ACE would not be efficient without changing the import clearance process the system supports.
   “Our first concern is that we not make the mistake of automating obsolete business process,” said Michael B. Laden, president of Target Customs Brokers, a subsidiary of Target Corp., and chairman of the American Association of Exporters and Importers. “We now find that inefficient and redundant border clearance processes employed by U.S. Customs and other government agencies that regulate trade at the border impose a significantly greater cost on U.S. companies than do direct customs duties and other border taxes.”
   For the past two years, Customs and the industry have studied ways to simplify the import entry process, and more work in this area needs to be done while ACE is in development.
   “We customs brokers and our importer customers want to be assured of stability, consistency and predictability first and foremost,” said Federico “Kiko” Zuniga, president of F. Zuniga Inc., and vice president of the National Customs Brokers and Forwarders Association of America. “Improvements can and must come, but risk must be prudent.”
   Zuniga pointed out to the subcommittee that several issues of the entry reform process will remain unresolved without support from Congress. They include the importers’ right to protest a Customs decision, interest applied to periodic payments on invoices for consolidated transactions, and possible consideration of entry errors not corrected within a specified timeframe as subject to punitive action by Congress.
   Other industry groups submitting written testimony related to ACE funding and the entry reform effort were the U.S. Business Alliance for Customs Modernization and the International Mass Retail Association.
   However, at end of the hearing, industry officials were disappointed that most of the subcommittee’s follow-up questions were focused on inspector staffing and overtime pay issues.