BUSINESS ALLIANCE RESPONDS TO LANE

BUSINESS ALLIANCE RESPONDS TO LANE

5In the June 5-11 edition of JoC Week, former Deputy Customs Commissioner Michael Lane weighs in on the current discussion over entry requirements. He says industry should give Customs what it needs in the form of information. He goes on in a manner that has elements of all the historical polarization between Customs and the importers. This is a disservice to all those who are actively seeking common ground on requirements for developing a modernized, cost-effective customs entry process.

Mr. Lane refers to a ''current industry action'' that seeks to block Customs from obtaining information as ''counterproductive and destructive.'' He probably refers to HR 4337, a bill initiated by the companies that make up the ad hoc U.S. Business Alliance for Customs Modernization (BACM). He also describes the industry input as ''knee-jerk opposition,'' and says they are ''not credible.''

As individual companies, and as members of BACM and other trade associations (who support HR 4337), we are deeply disappointed in Mr. Lane's comments. He has not participated in any of our councils and has never worked in industry, but draws conclusions about our intent, challenges our credibility, and further polarizes issues we are trying to resolve through consultation with Customs and other agencies. In the interest of clarifying the industry perspective, and in the hope of moving forward with constructive discussion, we note that the industry:

* Agrees completely with the importance of trade data.

* Agrees completely with the concepts of risk management.

* Appreciates the confidence of Mr. Lane (and, apparently, the Customs Service) that they should be able to provide rich and accurate detail at the time of entry, and only wishes it were true.

Mr. Lane alludes to the benefits of risk management and informed compliance, principles with which the industry agrees wholeheartedly. Customs has made a laudable effort to direct its efforts to managing exponential trade growth through informed compliance, compliance measurement, and, most recently, enforced compliance. The last has been necessary because compliance measurement suggests that informed compliance is not achieving Customs' goals for entry accuracy. If Mr. Lane's incredulity over business' ability to provide this information is correct, the obvious implication is that business makes no effort to do so. In fact, companies are spending millions of dollars on compliance programs, but the desired compliance level is not being met in any industry. There are a number of reasons, not the least of which is that even large companies find it virtually impossible to manage to the fine detail level Customs expects at the time of entry.

Unfortunately, Customs treats minor discrepancies in quantity and description - the most common errors found in entries and compliance measurement examinations - as evidence of non-compliance.

Customs recognizes the need to allow industry to correct import data post-entry. Its first effort to provide that capability, the Reconciliation Program, never reflected the needs of certain segments of industry and was unwieldy even for the industries that worked with Customs on its design.

HR 4337 was produced in response to a request from U.S. Customs: It asked industry to develop legislation to correct certain areas of the statute that are inconsistent with modern capabilities and business practices. BACM responded to the request. In addition to examining the specific areas Customs had identified, the members included an authority already promised in the Customs Modernization Act of 1993 and never implemented: the ability to enter merchandise and submit full data after release when that information is not necessary to safeguard the health, safety, or legal requirements of the U.S. and its citizens.

Release against minimum data is not a revolutionary concept. It is already an established practice in other developed countries including Canada and the United Kingdom. It is not a request for release against no data, and would not affect the reporting required for release of trade-sensitive products such as textiles and steel. An additional byproduct of this would be that the Bureau of the Census would receive not only timely trade statistics, but also improved trade statistics.

BACM, in concert with industry trade associations, continues to meet with Customs and the Census Bureau to try to clarify our goals and seek a common understanding on a modernized customs entry process. When we agree on so much, we should be optimistic about our ability to find a compromise on this issue. We ask Mr. Lane and all those who have brought the transformation of trade activity so far to work with us in this effort.

Business Alliance for CustomsModernization

(Members: American Honda, General Motors, Sara Lee, Archer Daniels & Midland, Hewlett Packard, Sears, BP-Amoco, JCPenney, Sony Electronics, Compaq, Mattel, Target Corp., Daimler Chrysler, Nissan, Toyota, DuPont, Nortel Networks, The Limited, Ford, Pillsbury, Wal-Mart, General Electric.)