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Improved Planning Needed to Strengthen Customs Trade Enforcement Says GAO Report

Posted June 14, 2017

Chronic staffing shortfalls and a lack of adequate performance targets at U.S. Customs and Border Protection are hampering the agency’s ability to effectively enforce the nation’s trade laws, according to a report from the Government Accountability Office published earlier this week. The findings come as the Trump administration aims to significantly bolster trade enforcement activities at both CBP and the Department of Commerce.

The report notes that in fiscal year 2015, CBP processed more than $2.4 trillion in imports through more than 300 ports of entry, collecting around $46 billion in revenue. As part of its sweeping mandate, the agency is not only tasked with facilitating legitimate trade coming into the U.S., but also rigorously enforcing the country’s trade laws and identifying harmful and noncompliant imports, such as counterfeit merchandise and goods that evade duties.

In February 2016, Congress passed the Trade Facilitation and Trade Enforcement Act that included a provision for GAO to review the effectiveness of CBP’s trade enforcement activities. In its report, the GAO examined:  CBP’s structure for carrying out trade enforcement; how CBP conducts trade enforcement across its high-risk issue areas and ensures that its enforcement activities are effective; and the extent to which CBP meets its staffing needs for trade enforcement.

GAO reviewed agency documents, interviewed agency officials, and conducted field work at ports in Baltimore, Maryland; Los Angeles/Long Beach, California; and New York, New York. GAO selected ports to visit based on factors including volume of imports and number of trade enforcement units at each port.

Following a number of organizational changes in recent years that moved the agency away from a port-centric approach, CBP now conducts trade enforcement across seven high-risk issue areas using a risk-based approach.  However, the GAO indicates that CBP’s plans generally lack performance targets that would enable the agency to assess the effectiveness of its enforcement activities.

Violations in the high-risk issue areas can cause significant revenue loss, harm the U.S. economy, or threaten the health and safety of the American people. CBP’s trade enforcement activities reduce risk of noncompliance and focus efforts on high-risk imports, according to CBP. For example, CBP conducts targeting of goods as well as audits and verifications of importers, seizes prohibited goods, collects duties, and assesses penalties. However, the GAO states, CBP cannot assess the effectiveness of its activities without developing performance targets as suggested by leading practices for managing for results.

Over the past five fiscal years, CBP generally has not met the minimum staffing levels set by Congress for four of nine positions that perform customs revenue functions, the GAO found, and it generally has not met the optimal staffing level targets identified by the agency for these positions. These staffing shortfalls can negatively impact CBP’s enforcement ability, for example, by leading to reduced compliance audits and decreased cargo inspections, according to CBP officials. CBP has cited several challenges to filling staffing gaps, including that hiring for trade positions is not an agency-wide priority. Contrary to leading practices in human capital management, CBP has not articulated how it plans to reach its staffing targets for trade positions over the long term, generally conducting its hiring on an ad hoc basis.

To strengthen its trade enforcement effort the GAO recommends that: (1) CBP’s Office of Trade should include performance targets, when applicable, in addition to performance measures in its priority trade issue strategic and annual plans; and (2) CBP’s Office of Trade and the Office of Field Operations should develop a long-term hiring plan that articulates how CBP will reach its staffing targets for trade positions set in the Homeland Security Act and the agency’s resource optimization model.

The GAO states that CBP has concurred with both recommendations, including by working to identify applicable performance measures with performance targets to include in the fiscal year 2018 annual and strategic plans for its priority trade issues, and identifying stakeholders and defining challenges that have resulted in hiring gaps in trade-related positions and developing a long-term hiring and resource plan.