CBP Issues its Performance and Annual Report for FY 2003

CBP states that the report meets the objectives of the Reports Consolidation Act of 2000 to streamline and consolidate statutory financial management and performance reporting requirements into a single report.

The following are selected highlights of CBP's report:

Compliance Measurement program. The Compliance Measurement (CM) program, initiated in FY 1995, collects objective statistical data to determine the compliance level of commercial imports with U.S. trade laws, regulations and agreements, and estimates the revenue gap. According to CBP, the CM program was disrupted following the September 11, 2001 terrorist attacks. The program was resumed near the end of FY 2002, and fully restored for FY 2003.

Drawback controls. CBP states that a resident statistician, working with Customs Drawback staff, proposed a new sampling methodology for drawback testing. The Drawback staff briefed the new methodology to its auditors, who, according to the report, were still reviewing the proposal and intended to have their own statistician meet with the Customs statistician to discuss the proposal. In addition, CBP reports that drawback specialists were trained in January 2003 and October 2003 on the new procedures being used for drawback.

Critical system recovery issues. Since 1994, CBP has reported a weakness in planning and preparing for disaster recovery at its National Data Center. In FY 2002, CBP received funding to establish a backup capability by contracting for a Commercial Recovery Facility (CRF), which later proved capable of recovering files and data except with regard to one particular system, the Automated Targeting System (ATS). Also, network connectivity had to be established for all CBP sites, as well as for participating trade partners and other government agencies.

CBP reports that tests in June 2003 showed that remaining issues had been resolved and the desired backup capability had been demonstrated by additional testing.

System security controls. In FY 2002, it was found that network and host-based system configuration vulnerabilities exist, which could potentially be used to compromise CBP's system security. CBP reports that seven of nine recommendations to correct these deficiencies have been completed, and further corrective actions are proceeding.

Textile and apparel verification visits, etc. In 2003, Textile Production Verification Teams visited 12 high-risk countries where 425 factories were visited. Of these, 54 were refused admission, 51 were permanently or temporarily closed, and eight had evidence of transshipment of goods. In addition, in 2003 more than $195 million worth of goods were seized that were smuggled using the in-bond system. Counterfeit documents were also found involving seven countries.

Swisher-type Harbor Maintenance Tax claims, administrative refunds. In FY 2003, CBP processed 192 Swisher-type Harbor Maintenance Tax claims totaling $145.9 million and processed 2,230 administrative refunds totaling $339.7 million.

Intellectual property rights. CBP reports that during the first six months of FY 2003, there were 3,117 intellectual property rights (IPR) seizures valued at $37.9 million.

Carrier Initiative Program. The Carrier Initiative Program (CIP), established in 1984, is a joint effort among air, sea, truck, and rail carriers and CBP. According to CBP, there are over 4,100 carriers currently participating in the CIP, which encourages the carriers to improve their security practices in striving to prevent narcotics or other illicit commodities from getting onboard their conveyances.

Business Anti-Smuggling Coalition. CBP has continued to support the Business Anti-Smuggling Coalition (BASC), which is a business-led alliance initiated in March 1996 to combat narcotics smuggling and complement and enhance CIP by examining the entire process of manufacturing and shipping merchandise from foreign countries to the U.S. Membership in BASC as of September 2003 included over 4,500 companies in Mexico, Panama, Ecuador, Peru, Jamaica, Costa Rica, Colombia, and Venezuela.

Americas Counter Smuggling Initiative. CBP reports that the Americas Counter Smuggling Initiative (ACSI) builds upon CIP and BASC by strengthening and expanding U.S. anti-narcotics security programs with industry and governments throughout Central and South America to safeguard legitimate shipments from being used to smuggle narcotics. Target countries include Colombia, Costa Rica, Ecuador, Mexico, Panama, Peru, Venezuela, and Jamaica.

CBP Performance and Annual Report Fiscal Year 2003 available at http://www.cbp.gov/ImageCache/cgov/content/publications/cbpannualreportmarch04_2epdf/v1/cbpannualreportmarch04.pdf