U.S. GAO: CUSTOMS’ IMPORT INDUSTRY COMPLIANCE GOAL FALL SHORT

U.S. GAO: CUSTOMS’ IMPORT INDUSTRY COMPLIANCE GOAL FALL SHORT    A recent report by the U.S. General Accounting Office said Customs’ efforts to bring importers into compliance with its rules fall short.
   The report, “Customs Service Modernization: Impact of New Trade Compliance Strategy Needs to Be Assessed,” was issued to the House Ways and Means Subcommittee on Trade.
   The GAO found that industry compliance rates with Customs’ import rules averaged 81 percent, compared to the agency’s goal of 90 percent.
   GAO also noted that Customs’ revenue collection rate has decreased from 99.37 percent in fiscal year 1995 to 98.35 percent in fiscal 1998. This caused projected net revenue underpayment to increase from $135 million in fiscal 1995 to $343 million in fiscal 1998.
   Customs changed the way it handles import compliance in the 1993 Customs Modernization and Informed Compliance Act. Importers now have the legal responsibility to declare the value, classification and rate of duty applicable to merchandise imported into the United States.
   To implement these new rules Customs had to initiate an    “informed compliance” strategy with importers. This was done mostly through seminars and audits of the largest importers’ records. From 1995 to 1999 Customs assigned account managers to only 604 importers out of a potential pool of 7,405.
   Customs blamed lack of sufficient resources and manpower for meeting its compliance goals. GAO recommend that Customs reevaluate its compliance efforts and set more realistic goals.