S. HHG. 105-189

THE VISA WAIVER PILOT PROGRAM

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HEARING

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BEFORE THE

SUBCOMMITTEE ON IMMIGRATION

OF THE

COMMITTEE ON THE JUDICIAKY

UNITED STATES SENATE

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ONE HUNDRED FIFTH CONGRESS

FIRST SESSION

ON

S. 290

A BILL TO ESTABLISH A VISA WAIVER PILOT PROGRAM FOR NATIONALS OF KOREA WHO ARE TRAVELING IN TOUR GROUPS TO THE

UNITED STATES

JULY 17, 1997

Serial No. J-105-33

Printed for the use of the Committee on the Judiciary

U.S. GOVERNMENT PRINTING OFFICE

44-272 CC WASHINGTON : 1997

For sale by the U.S. Government Printing Office

Superintendent of Documents, Congressional Sales Office, Washington, DC 20402

ISBN 0-16-055689-9
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SENATE COMMITTEE ON THE JUDICIARY

ORRIN G. HATCH, Utah, Chairman

STROM THURMOND, South Carolina

CHARLES E. GRASSLEY, Iowa

ARLEN SPECTER, Pennsylvania

FRED THOMPSON, Tennessee

JON KYL, Arizona

MIKE DEWINE, Ohio

JOHN ASHCROFT, Missouri

SPENCER ABRAHAM, Michigan

JEFF SESSIONS, Alabama

PATRICK J. LEAHY, Vermont

EDWARD M. KENNEDY, Massachusetts

JOSEPH R. BIDEN, JR., Delaware

HERBERT KOHL, Wisconsin

DIANNE FEINSTEIN, California

RUSSELL D. FEINGOLD, Wisconsin

RICHARD J. DURBIN, Illinois

ROBERT G. TORRICELLI, New Jersey

MANUS COONEY, Chief Counsel and Staff Director

BRUCE A. COHEN, Minority Chief Counsel

SUBCOMMITTEE ON IMMIGRATION

SPENCER ABRAHAM, Michigan, Chairman

CHARLES E. GRASSLEY, Iowa EDWARD M. KENNEDY, Massachusetts

JON KYL, Arizona DIANNE FEINSTEIN, California

ARLEN SPECTER, Pennsylvania RICHARD J. DURBIN, Illinois

LEE LIBERMAN Ons, Chief Counsel

MICHAEL MYERS, Minority Staff Director

(II)
CONTENTS

STATEMENTS OF COMMITTEE MEMBERS

Page

Spencer, Hon. Abraham, U.S. Senator from the State of Michigan 1

Kennedy, Hon. Edward M., U.S. Senator from the State of Massachusetts 81

Feinstem, Hon. Dianne, U.S. Senator from the State of California 91

PROPOSED LEGISLATION

S. 290, a bill to establish a visa waiver program for nationals of Korea

who are traveling in tour groups to the United States 2

CHRONOLOGICAL LIST OF WITNESSES

Panel consisting of Hon. Frank H. Murkowski, U.S. Senator from the State

of Alaska; Hon. Daniel K. Inouye, U.S. Senator from the State of Hawaii;

Hon. Jay Kim, Representative in Congress from the State of California;

Hon. George Allen, Governor, Commonwealth of Virginia, Richmond,

VA; and Hon. Mazie K. Hirono, Lieutenant Governor, State of Hawaii,

Honolulu, HI 38

Panel consisting of Mary A Ryan, Assistant Secretary for Consular Affairs,

Bureau of Consular Affairs, Department of State, Washington, DC; Michael

D. Cronin, Assistant Commissioner for Inspections, Immigration and Naturalization Service, Washington, DC; and Janet Thomas, director of facilitation, Air Transport Association of America, Washington, DC 64

ALPHABETICAL LIST AND MATERIAL SUBMITTED

Abraham, Hon. Spencer:

Prepared statement of Bob Miller, Governor, State of Nevada and chair,

National Governors' Association 14

Letter to Senators Abraham and Kennedy from Tony Knowles, Governor,

State of Alaska, dated June 23, 1997 16

Prepared statement of Donald P. Gregg, former U.S. Ambassador to

South Korea 16

Prepared statement of Tami Overby, executive director, the American

Chamber of Commerce in Korea 18

Various tables and charts 21

Prepared statement of William S. Norman, president and CEO, Travel

Industry Association of America 27

The Economic Impact of Travel and Tourism on Various States 30

Letter to Senators Abraham and Kennedy from Thomas G. Tait, the

Western States Tourism Policy Council, dated June 21, 1997 37

Prepared statement of the Airports Council International•North America and the American Association of Airports Executives 37

Allen, Hon. George:

Testimony 48

Prepared statement 50

Southern Governors' Association resolution 51

Western Governors' Association resolution 52

Letter to Senators Abraham and Kennedy from the National Governors'

Association, dated June 19, 1997 53

NGA policy 53

Cronin, Michael D.:

Testimony 68

Prepared statement 70

(III)
IV

Cronin, Michael D.•Continued

Prepared statement•Continued

Chart 1. Nonimmigrants Admitted by Selected Class of Admission

for Countries in the VWPP: Fiscal Years 1988-95 74

Chart 2. Enforcement Statistics for Countries in the VWPP: Fiscal

Years 1985-96 75

Chart 3. Enforcement Statistics (per million admitted) for Countries

in the VWPP: Fiscal Years 1988-95 76

Hirono, Hon. Mazie K.:

Testimony 55

Prepared statement of Hon. Benjamin J. Cayetano, Governor, State of

Hawaii 57

Inouye, Daniel K.:

Testimony 42

Prepared statement 43

Prepared statement of Hon. Neil Abercrombie, U.S. Representative in

Congress from the State of Hawaii 44

Kim, Hon. Jay:

Testimony 46

Prepared statement 47

Murkowski, Hon. Frank H:

Testimony 38

Prepared statement 40

Ryan, Mary A:

Testimony 64

Prepared statement 66

Responses to questions from Senator Abraham 90

Thomas, Janet:

Testimony 77

Prepared statement 79
THE VISA WAIVER PILOT PROGRAM

THURSDAY, JULY 17, 1997

U.S. SENATE,

SUBCOMMITTEE ON IMMIGRATION,

COMMITTEE ON THE JUDICIARY,

Washington, DC.

The subcommittee met, pursuant to notice, at 3 p.m., in room

SD-226, Dirksen Senate Office Building, Hon. Spencer Abraham

(chairman of the subcommittee), presiding.

Also present: Senator Kennedy.

OPENING STATEMENT OF HON. SPENCER ABRAHAM, A U.S.

SENATOR FROM THE STATE OF MICHIGAN

Senator ABRAHAM. This hearing will come to order. We are delighted to have everybody here today. This is a hearing with respect to the Visa Waiver Pilot Program [VWPP]. We have a number of important issues to consider in relation to the reauthorization of that very popular program, and I am pleased that we have

excellent witnesses to bring us up to date both on what has happened during the program's current establishment and also to talk

about where we go from here. I am going to make a few opening

remarks and set the stage as to where things are, and then we will

turn to the witnesses, since we have no other members here. I believe Senator Kennedy may be joining us after the vote at 3:30, and

it is possible that other members will be here as well.

I am going to, as I say, do my opening statement quickly and

then we will go to the first panel. We also may be joined by one

more panelist, Congressman Kim, who I believe is currently voting

on the House floor, and I think he is on his way over after that.

The Visa Waiver Program essentially is a system by which aliens

from designated countries may enter the United States as temporary visitors without the visa that would normally be required to

enter our country in addition to a passport. Because this very popular program expires at the end of the current fiscal year, on September 30, 1997, the subcommittee will have to consider its reauthorization, along with any changes or modifications that we find

should be made to the program.

Also before the subcommittee is Senate bill 290, a MurkowskiInouye bill to provide special visa waiver treatment for South Korean tour groups entering the country for limited stays of less than

15 days. This hearing presents us with an opportunity to educate

ourselves on issues related to the reauthorization of the Visa Waiver Program, as well as the South Korean issue in particular.

[The above-referenced bill, S. 290 follows]:

(l)
105TH CONGRESS

1ST SESSION S.290

To establish a visa waiver pilot program for nationals of Korea who are

traveling in tour groups to the United States.

IN THE SENATE OP THE UNITED STATES

FEBRUARY 6, 1997

Mr. MURKOWSKI (for himself, Mr. INOUYE, Mr. AKAKA, Mr. STEVENS, and

Mr. THOMAS) introduced the following bill; which was read twice and referred to the Committee on the Judiciary

A BILL

To establish a visa waiver pilot program for nationals of

Korea who are traveling in tour groups to the United States.

1 Be it enacted by the Senate and House of Representa2 tives of the United States ofAmerica in Congress assembled,

3 SECTION 1. KOREA VISA WAIVER PILOT PROGRAM.

4 (a) CONGRESSIONAL FINDINGS.•The Congress finds

5 that•

6 (1) travel and tourism play a major role in re7 ducing the United States unfavorable balance of

8 trade;
3

2

1 (2) the characteristics of the Korean travel

2 market do not permit long-term planning for longer

3 trips;

4 (3) applications for United States visas cannot

5 now be processed in a reasonable period of time;

6 (4) the Secretary of State has attempted to

7 solve the problem by adding additional staff to the

8 consular section at the United States Embassy in

9 Seoul;

10 (5) unfortunately, these additions have not re11 suited in any discernible improvement in reducing

12 visa processing delays;

13 (6) further, it is unlikely, given the current fis14 cal environment, to expect funding to be available

15 for further staff additions in sufficient numbers to

16 effect any significant improvement in the time re17 quired to process visa applications;

18 (7) most of the nations of the South Pacific,

19 Europe, and Canada do not currently require Kore20 ans entering their countries to have a visa, thus pro21 viding them with a serious competitive advantage in

22 the tourism industry;

23 (8) the United States territory of Guam has

24 been permitted by the United States Government to

25 eliminate visa requirements for Koreans visiting

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1 Guam, with resultant impressive increases in travel

2 and tourism from citizens of the Republic of Korea;

3 (9) any application under existing procedures to

4 add the Republic of Korea, or any other nation to

5 the group of favored nations exempted from United

6 States visa regulations, would require many years

7 during which time the United States could well lose

8 its competitive advantages in attracting travel and

9 tourism from the Republic of Korea;

10 (10) the Republic of Korea, as a gesture of

11 goodwill, has already unilaterally exempted United

12 States tourists who seek to enter the Republic of

13 Korea from the requirement of obtaining a visa; and

14 (11) growth in Korean travel to the United

15 States has not kept pace with growth in travel to

16 non-United States destinations, and cumbersome

17 and time-consuming visa processing procedures are

18 widely recognized as the cause of this loss of market

19 share and competitiveness with alternative destina20 tions.

21 (b) PILOT PROGRAM.•The Secretary of State and

22 the Attorney General jointly shall establish a pilot project

23 (in this section referred to as the "pilot program") within

24 six months of the date of the enactment of this Act under

•S 290 is
4

1 which the requirement of paragraph (7)(B)(i)(II) of sec2 tion 212(a) of the Immigration and Nationality Act (8

3 U.S.C. 1182(a)(7)(B)(i)(II)) is waived during the pilot

4 program period in the case of any alien who meets the

5 following requirements:

6 (1) NATIONAL OF PILOT PROGRAM COUNTRY.•

7 The alien is a national of, and presents a passport

8 issued by, the Republic of Korea. The Republic of

9 Korea is urged to provide machine readable pass10 ports to its citizens in the near future.

11 (2) SEEKING ENTRY AS TOURIST.•The alien is

12 applying for admission to the United States during

13 the pilot program period as a nonimmigrant visitor

14 for pleasure (as described in section 101(a)(15)(B)

15 of the Immigration and Nationality Act (8 U.S.C.

16 1101(a)(15)(B))), as part of a group tour to the

17 United States.

18 . (3) PERIOD OP STAY.•The alien seeks to stay

19 in the United States for a period of not more than

20 15 days.

21 (4) EXECUTES IMMIGRATION PORMS.•The

22 alien before the time of such admission completes

23 such immigration form as the Attorney General shall

24 establish.

•S 290 IS
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5

1 (5) ENTRY INTO THE UNITED STATES.•If ar2 riving by sea or air, the alien arrives at the port of

3 entry into the United States on a carrier which has

4 entered into an agreement with the Immigration and

5 Naturalization Service to guarantee transport of the

6 alien out of the United States if the alien is found

7 inadmissible or deportable by an immigration officer.

8 (6) NOT A SAFETY THREAT.•The alien has

9 been determined not to represent a threat to the

10 welfare, health, safety, or security of the United

11 States.

12 (7) No PREVIOUS VIOLATION.•Ifthe alien pre13 viously was admitted without a visa under this sec14 tion, the alien must not have failed to comply with

15 the conditions of any previous admission as such a

16 nonimmigrant.

17 (8) ROUND-TRIP TICKET.•The alien is in pos18 session of a round-trip transportation ticket (unless

19 this requirement is waived by the Attorney General

20 under regulations).

21 (c) WAIVER OP RIGHTS.•An alien may not be pro22 vided a waiver under the pilot program unless the alien

23 has waived any right•

•S 290 IS
6

1 (1) to review or appeal under this Act of an im2 migration officer's determination as to the admissi3 bility of the alien at the port of entry into the

4 United States, or

5 (2) to contest, other than on the basis of an ap6 plication for asylum, any action for deportation

7 against the alien.

8 (d) TERMINATION OF AUTHORITY.•Notwithstanding

9 any other provision of this section, the Attorney General

10 and the Secretary of State, acting jointly, may terminate

11 the pilot program under this section on or after a date

12 which is one year after the date of the establishment of

13 the pilot program if•

14 (1) during the preceding fiscal year, the over15 stay rate for nationals of the Republic of Korea en16 tering the United States under the pilot program ex17 ceeds the overstay rate of such nationals entering

18 the United States with valid visas; and

19 (2) the Attorney General and the Secretary of

20 State have jointly determined that the pilot program

21 is leading to a significant increase in the number of

22 overstays by such nationals.

23 (e) SPECIAL BOND AND NOTIFICATION REQUIRE24 MENTS FOR TOUR OPERATORS.•

•S 290 IS
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7

1 (1) IN GENERAL.•Nationals of the Republic of

2 Korea may not enter the United States under the

3 terms of this section unless they are accompanied

4 for the duration of their authorized admission period

5 by a tour operator who has fulfilled the following re6 quirements:

7 (A) The tour operator has posted a bond

8 of $200,000 with the Secretary of State.

9 (B) The Secretary of State, under such

10 regulations as the Secretary may prescribe, has

11 approved an application by the tour operator to

12 escort tour groups to the United States.

13 (C) The tour operator provides the name,

14 address, birthdate, passport number, and citi15 zenship of all prospective tour group members

16 to the Secretary of State no less than one busi17 ness day prior to the departure date of the

18 group, under such regulations as he may pre19 scribe, in order to determine that the prospec20 tive travelers do not represent a threat to the

21 welfare, health, safety, and security of the

22 United States.

23 (D) The tour operator excludes from the

24 tour group any person whom the Secretary of

•S 290 IS
9

8

1 State denies permission to travel to the United

2 States.

3 (E) The tour operator provides written cer4 tification or other such evidence prescribed by

5 the Secretary of State and Attorney General

6 which documents the return to Korea of each

7 tour group member.

8 (2) FORFEITURE OP BONDS.•Bonds posted in

9 accordance with this subsection shall be forfeited in

10 whole or in part and a tour operator's authorization

11 to escort tours to the United States may be sus12 pended or revoked if the Secretary of State finds

13 that the tour operator•

14 (A) has failed to disclose a material fact in

15 connection with the application required under

16 paragraph (1)(B);

17 (B) fails to comply with the advance notifi18 cation and refusal requirements of paragraphs

19 (1)(C) and (1)(D);

20 (C) has failed to take adequate steps to en21 sure that visitors who are being escorted to the

22 United States under the terms of an approved

23 application return to their country of residence;

24 or

•S 290 IS
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9

1 (D) is found at any time to have commit2 ted a felony or any offense under the immigra3 tion laws of the United States.

4 (f) PARTICIPATION BY TOUR AGENTS.•The Sec5 retary of State shall periodically review the overstay rate

6 of nationals of the Republic of Korea that corresponds to

7 each tour agent participating in the program under this

8 section. The Secretary may terminate the participation in

9 the program of any tour agent if the Secretary determines

10 that the corresponding overstay rate is excessive.

11 (g) DEFINITIONS.•For purposes of this section•

12 (1) GROUP TOUR.•The term "group tour"

13 means travelers who take advantage of group-pur14 chased hotel or airfare packages, as guided, super15 vised, and arranged by a tour agent in the Republic

16 of Korea approved or licensed by the Department of

17 State.

18 (2) OVERSTAY RATE.•The term "overstay

19 rate" means, during a specified period of time, the

20 proportion that the number of aliens remaining in

21 the United States after the expiration of their visas

22 bears to the total number of aliens entering the

23 United States during that period of time.

24 (3) PILOT PROGRAM PERIOD.•The term "pilot

25 program period" means the three-year period im-

•s tao IS
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10

1 mediately following the establishment of the pilot

2 program.

O

•S WO IS
12

Senator ABRAHAM. The history of the Visa Waiver Program is

straightforward. Congress created it in 1986 in the immigration bill

that was passed that year. It became effective in 1988 and was

originally limited to eight countries and for a duration of 3 years.

Now 25 countries participate in the program and its authorizing

statute has been amended and extended five times, which is, I

think, a tribute to the program's success.

The program has typically been extended for 2- or 3-year periods,

with some modifications to the program being included from time

to time, but last year's immigration reform law, the Illegal Immigration bill of 1996, extended the Visa Waiver Program for only 1

year, through September 30, 1997. This was done so that we could

consider issues related to the program in more detail and apart

from the multitude of immigration issues that Congress was considering last year as part of the broader bill.

Most of our witnesses here today will be familiar with the general operation of the program. Under it, the Attorney General, in

consultation with the Secretary of State, may waive the visa requirements for aliens traveling to the United States from certain

countries as temporary visitors. Visits can be for up to 90 days and

for either business or pleasure. Those aliens would otherwise require a so-called B visa in order to enter the United States, but for

aliens from countries under this program that requirement is

waived.

Aliens who enter the United States under the Visa Waiver Program do face certain restrictions. Unlike other B visitors, they may

not petition while within the United States to change their immigration status, and they may petition to extend their stay for only

emergency reasons. Also, those aliens remaining in the United

States in violation of the provisions of the waiver program become

deportable with no judicial review, and Visa Waiver Program aliens

may not seek review of an immigration officer's determination

made at the time of entry that they are inadmissible.

In terms of country eligibility, the program countries are now selected by the Attorney General, in consultation with the Secretary

of State, a change that was instituted through last year's immigration reform law. In order to be eligible, countries must meet a number of statutory requirements which aim to ensure that aliens admitted under the program are generally low-risk and will not overstay their authorized period of stay in the United States.

To be admitted into the program, countries must have a low nonimmigrant visa refusal rate of 2 percent on average over the previous 2 fiscal years, and must show that the refusal rate did not

exceed 2.5 percent in either year. They must have or be developing

a machine-readable passport program, must offer reciprocal visafree travel to U.S. citizens, and must be found by the Attorney

General not to be compromising U.S. law enforcement interests.

Once designated as a program participant, a country may be

placed on probation if it does not maintain a low disqualification

rate. The disqualification rate represents the percentage of nationals from a country who applied for admission to the United States

at a port of entry as nonimmigrants and who either violated the

terms of their nonimmigrant visa, were excluded from admission

upon trying to enter, or withdrew their applications for admission.
13

While the program has certainly furthered international travel

and tourism and has generally been heralded as a great success,

we do have a number of significant issues to consider in conjunction with the operation of the program, and I look forward to hearing today's testimony on those matters.

The first and most important question is simply whether the program should be reauthorized. While I do not expect to hear any of

our witnesses testify that the program should not be reauthorized,

we will receive some insights on whether the program should be reauthorized on a permanent or on a temporary basis. I look forward

to hearing the views of our witnesses as to what length reauthorization should be for U.S. security and for other similar issues.

A second more serious issue involved in the reauthorization is

how we can improve the current record of tracking and even counting visa overstayers. Recent estimates by the INS earlier this year

not only put the number of illegal aliens in the U.S. at 5 million,

a shocking figure in itself, but also estimated that 41 percent of

that illegal alien population entered legally, but overstayed their

authorized period of stay.

In order to address illegal immigration in this country, we simply

have got to do a better job of tracking overstayers and enforcing

the terms under which aliens are permitted to enter. The statutory

provisions of the waiver program that I just mentioned, such as an

alien who overstays his or her 90-day period of stay will be deportable without judicial review, are certainly laudable in theory. But

the reality in practice is that we have no way of tracking those who

overstay, and the INS, in fact, has found it virtually impossible to

do so.

We recently learned that the INS cannot accurately assess overall numbers of those who enter legally and overstay, despite the

current use of an entry-exit matching system through the so-called

1-94 cards. I hope today we will hear from the INS as to how this

has occurred, how we have gotten into this position, whether it can

be fixed, and what we can better do to improve the tracking process.

We also need to look further into ways in which we can track individual visa overstayers. Frankly, this should not be a herculean

task, given that we already collect information from those who are

entering the country legally. We welcome the views from the Government witnesses. Later on we will be hearing from the airlines'

representatives on this important matter.

We would also welcome hearing about the INS' progress in establishing an automated entry-exit control system, which was mandated in last year's illegal immigration reform bill. That law requires the INS to establish, by September 30, 1998, an automated

entry-exit control system that will both match arrival and departure records for aliens and that will permit the Attorney General

to identify individual overstayers through on-line screening. An update on the INS' progress will be very informative.

Finally, we will also address the related issue of South Korea. As

I mentioned, Senators Murkowski and Inouye, along with Senators

Stevens, Akaka, and Thomas, have introduced a bill that would

permit South Koreans traveling in tour groups to the United States

to participate in a special visa waiver program, which is modeled

44-272 - 97
14

on the Visa Waiver Program that we currently have, but which includes particular safeguards and limitations. We may be joined, as

I said, by Congressman Kim, who has introduced legislation in the

House that would grant full visa waiver status to South Korea.

I believe that if the current trend continues, South Korea will be

admitted into the Visa Waiver Program as a fully participating

country in a short period of time, based on the success record to

date. Some argue that in the meantime, there should be a special

temporary visa program to facilitate tour group travel in the United States, and so we look forward today to hearing from our witnesses on their views in terms of the need for this sort of program.

In addition to the witnesses we will hear from today, we also

have some submissions to be placed in the record. At the outset I

would like to place in the record a statement by Governor Bob Miller of the State of Nevada. He is also the chairman of the National

Governors' Association. Governor Miller had been scheduled to testify today, but unfortunately cannot be here due to a last-minute

scheduling conflict. So I am pleased that we have his statement to

include in the record today.

I understand, also, that Senator Murkowski has statements to

place in the record from Governor Knowles of Alaska and from

Donald Gregg, the former U.S. Ambassador to South Korea, and so

we will include those in the record as well.

[The prepared statements of Governors Miller and Knowles and

Ambassador Gregg follow:]

PREPARED STATEMENT OF BOB MILLER, GOVERNOR OF NEVADA AND CHAIR,

NATIONAL GOVERNORS' ASSOCIATION

Mr. Chairman and members of the subcommittee.

I am pleased and honored to be allowed this opportunity to give testimony on the

nonimmigrant visa waiver program.

There are few, I think, who would argue with the assertion that since its inception in 1988, the visa waiver pilot program has proven to be a phenomenal success.

Approximately half of the international visitors who arrive in the United States do

so under the auspices of the visa waiver pilot program. It has made the machinery

of our federal government run more efficiently, freeing officials from much superfluous visa processing work and allowed them to focus on curbing more serious

threats to our immigration policies. It also has saved U.S. taxpayers an estimated

$175 million in visa processing costs.

But it has been the economic benefits we have realized from this program that

provide the most compelling argument for making the visa waiver program permanent and for immediately expanding it to include South Korea.

Korea is currently the world's 11th largest economy, and is projected to be the

7th largest by 2020, with a GNP of some $4 trillion. With a mean annual household

income of $59,800, the South Koreans are a people with large amounts of discretionary income. (And, I might add, little economic motivation to immigrate to the

United States, legally or otherwise.)

It is important to note that approximately 8 percent of the Korean population

traveled overseas in 1995. They spent about $1 trillion in the United States, over

$2,000 per trip, excluding airfare. To get some idea of how rapidly the South Korean

economy is growing, consider that in 1988, 3.4 million of its citizens traveled abroad.

By 1994, that number had increased by five times.

But, as I learned firsthand on a recent visit to Seoul, those who make the trip

to our shores face some serious obstacles. Those impediments are due primarily to

the fact that their nation is not part of the visa waiver program. Despite the efficiency and hard work of the staff of the U.S. consulate, waits of two weeks or longer

for visa processing are not unheard of. The huge volume of work has resulted in

some unfortunate incidents. The recent refusal of a visa to the sister of the Korean

president and the daughter of the prime minister was an embarrassment, and an

affront to a nation with great economic and political importance.
15

These difficulties have a significant and direct bearing upon the outbound South

Korean travel market. For example, it is a fact that some 12-15 percent of all international visitors to the U.S. come as part of an organized tour group. However, as

I observed during my visit, South Korean tour operators are less than enthusiastic

about selling tours to the United States. Why? Because of the excessive paperwork

involved in processing visas, and the possibility that individual members of their

group may be denied. Since tour operators must reserve and guarantee lodging and

transportation well in advance from American suppliers, a few unexpected visa denials can make the difference between a profitable trip and a loss. Many tour operators, then, prefer to avoid the risk by simply avoiding the United States.

This unfortunate consequence results in lost opportunity for America's $467 billion per year tourism industry, $84 billion of which is international.

It is estimated that lowering the existing barriers to Korean visitation would increase arrivals by about 200,000 the first year, generate $400 million in new spending and create 10,000 new jobs. Currently, the United States is losing large snares

of the South Korean tourism market to some 44 other nations, which have already

relaxed restrictions on admitting Korean citizens•countries such as Canada,

France, Germany, Great Britain and Australia, the latter of which registered an astonishing 45 percent increase in the volume of South Korean visitors between 1995

and 1996. The United States is the third leading country in terms of its share of

the international tourism market. Removing onerous travel restrictions on citizens

of friendly countries such as South Korea would go far to move the United States

into the first place, which it should rightly hold.

With regard to specific pending legislation, I would offer qualified support for Representative Jay Kim's HR 203, which would grant visa waivers to South Korean

tourists and business people for a one-year trial period. I regard this bill as a positive step in the correct direction. However, I must concur with the position of the

Travel Industry Association of America, which has quite correctly pointed out that

allowing only one year to develop and implement a new visa waiver program•employing sophisticated and largely untested electronic devices and software•is wholly inadequate. A three- to five-year test period would be much more realistic.

I caution against the passage of HR 627 and S 290, which would waive visa requirements only for South Koreans traveling with a group tour operator. This legislation would exclude business travelers, and we must agree with Representative

Kim, who termed such a discriminatory measure "an insult" to the South Korean

people. In purely economic terms, we believe that excluding business travelers is a

serious mistake, given the fact that many western cities are currently attempting

to expand their share of the business, convention and incentive travel markets, and

others are seeking to increase business with the nations of the Pacific Rim, where

South Korea is a significant economic force.

Mr. Chairman, I believe that the issue at hand is one that will have a profound

economic impact on the economy of our nation for several decades to come. While

domestic tourism continues to grow slowly and steadily, the greatest potential for

growth in what will eventually become our nation's largest industry must come from

overseas•from new industrial powers such as South Korea.

When many people think of the tourism industry, they think of large airlines,

towering luxury hotels and exciting amusement parks. But those are just the industry's most visible trappings. It is an industry of small businesses; a small antique

store run by a retired couple; a service station owner whose business picks up

enough from the passing tour buses that he is able to purchase and restore a historic old hotel. For many of the small towns across America that lost the one big

factory that had sustained their community, tourism has been their salvation; a

means to stabilize their lives.

For the Western United States, travelers from the Pacific Rim and other overseas

destinations will be an important part of the strategy for rebuilding the deteriorating infrastructure in our national parks, forests and other public recreational lands.

It is visitor dollars that will fund the needed road and bridge repairs, visitor facilities and wildlife and land conservation projects.

The National Governors Association joins the Western Governors Association, the

Southern Governors Association, the Western States Tourism Policy Council and numerous other governmental and business organizations in urging you to make the

visa waiver program a permanent one•or, at the very least, to reauthorize the visa

waiver pilot program for another 3-5 years•and to include South Korea as a participant.

In conclusion, I thank you Mr. Chairman, and the distinguished members of the

subcommittee for the opportunity to be heard today.
16

STATE OF ALASKA,

OFFICE OF THE GOVEKNOR,

Washington, DC, June 23, 1997.

Hon. SPENCER ABRAHAM,

Chairman, Subcommittee on Immigration,

Committee on the Judiciary, U.S. Senate,

Washington, DC.

Hon. EDWARD M. KENNEDY,

Ranking Member, Subcommittee on Immigration,

Committee on the Judiciary, U.S. Senate,

Washington, DC.

DEAR CHAIRMAN ABRAHAM AND SENATOR KENNEDY: I am writing to support permanent reauthorization of the Visa Waiver Pilot Program (VWPP), and extension

of the VWPP program to the Republic of Korea as proposed in S. 290.

The VWPP, implemented in 1988, has enjoyed tremendous success. Twenty-five

nations have qualified under the program. This has resulted in significant visitation

increases to the United States, as well as major cost savings to the federal government. In fact, more than 50 percent of all foreign travelers to the U.S. come under

the VWPP.

The State of Alaska also seeks your support for expediting extension of the VWPP

to the Republic of Korea (ROK). South Korea's visa refusal rate is rapidly dropping

to the 2 percent level at which point the country would automatically qualify for

the program. Despite the increased number of nonimmigrant visas processed•from

65,000 to 550,000 visas in the last 10 years•the ROIvs refusal rate has dropped

sharply from 6.3 percent in Fiscal Year 1995 to 2.87 percent in Fiscal Year 1996.

However, it will take at least another three years, at best, because of reporting

delays and statutory requirements, for the ROK to be eligible for visa-free status.

Legislative action to expedite extension of the VWPP to the ROK would prevent

Alaska and other states from continuing to lose tourism and investment market

share from that country.

The ROK is the eleventh largest economy in the world, in terms of gross national

product and trade volume. South Korea is Alaska's second largest trading partner,

importing $463 million worth of Alaska goods last year including oil ana gas, seafood and minerals. With its population of 46 million, some 5,000 tourists visit Alaska annually, many on the direct air route between Anchorage and Seoul operated

by Korean Air Lines. Koreans living in Alaska are incredibly productive citizens

who contribute in a major way to Alaska's cultural diversity.

Studies show easing the visa requirements would increase visitor rates to Alaska

nearly tenfold. Korean travel rates are skyrocketing, but the complicated U.S. visa

application process causes significant delays for South Korean visitors and has led

them to choose the many other countries with friendlier entry requirements as their

destinations. Presently, there are 48 nations•such as Canada, Germany and the

United Kingdom•that have no visa requirement for South Korean visitors. Consequently, data shows that many Koreans instead choose to travel to and invest in

those destinations rather than in the United States. While total outbound travel

from Korea has grown 246 percent since 1988, outbound travel to the U.S. during

the same time period grew at a much slower rate of 178 percent.

The visa requirement is not an immigration issue but an economic barrier that

restricts trade and tourism between Korea and the United States. It is for this reason that the National Governors' Association, the Southern Governors' Association,

and the Western Governors' Association have adopted resolutions to extend visa-free

status to the Republic of Korea, and to approve permanent reauthorization of the

overall Visa Waiver Pilot Program. I was honored to have played a part in two of

these resolutions and to learn more about this issue firsthand during my trade mission to Korea last fall.

Thank you very much for your consideration of my views.

Sincerely,

TONY KNOWLES,

Governor.

PREPARED STATEMENT OF DONALD P. GREGG, FORMER U.S. AMBASSADOR TO SOUTH

KOREA

I am delighted to be given this opportunity to testify on behalf of Senator Murkowski's bill, S. 290, to establish a visa waiver pilot program for South Koreans who

are traveling with tour groups to the United States.
17

As background, I bring the following experience to the issue. I served as American

Ambassador to Korea from September 1989 until the end of February 1993. During

that period, I did all that I could to make it easier for Koreans to receive visas to

travel to the United States. I had the full support of the Consul General at that

time, Edward Wilkinson, and we accomplished a good deal, given the resource restraints that were placed upon the Embassy by the Department of State.

Visa issuance had been a highly contentious issue well prior to my arrival in

Korea. Long lines of Koreans were wrapped around the Embassy everyday, and the

overall question of visa issuance was looming as a difficult issue between our two

countries. I soon came to understand that this situation would only get worse since

the Korean Government•reflecting the new levels of prosperity achieved in Korea

during the 1980s•was in the process of relaxing the previously stringent restrictions it had placed on those citizens wanting to travel abroad.

In my view, this enlightened step by the Korean Government made it appropriate

for the Embassy to do all that it could to reciprocate, by streamlining our visa-issuance procedures. This we attempted to do. Consul General Wilkinson, working with

his staff, devised many ingenious methods which kept the essential screening requirements in place, but streamlined the processes. Embassy officers on the visa

line worked very hard, under difficult circumstances, to improve the system.

A major substantive, as well as public relations, issue confronting us was the fact

that the vast majority of American visas were issued only in Seoul. This made it

necessary for the citizens of Pusan, Korea's second city, (and every other city in

Korea, for that matter) to travel to Seoul to get a visa. The Japanese were issuing

visas in Pusan, and it was said that thousands of Koreans, who wanted to travel

to the United States for tourism, chose to go to Japan instead primarily because it

was so much easier, and cheaper, to get a visa for Japan. It could take three days

or more for a Pusan citizen to get a U.S. visa in Seoul, and the costs involved were

considerable, involving transportation, meals and lodging.

I raised this issue with the appropriate office in the Department of State, and was

fiven no encouragement, or funds, to establish visa issuing procedures in Pusan. We

ecided to see what we could do, even within these restrictions. With strong assistance from U.S. Forces Korea, who gave us free access to key equipment and communications lines, and through the cooperation of Consular personnel, both in Seoul

and Pusan who were willing to do "the extra thing," we began to issue tourists visas

in Pusan. The volume increased to the point that for the first time direct commercial air flights were scheduled from Pusan to Honolulu. This was in direct response

to the large numbers of Pusan citizens who decided to fly to Hawaii, and many of

them went on to Mainland USA, simply because they were able to get a U.S. visa

easily in their hometown.

We calculated at the time that each Korean citizen traveling to the United States

spent approximately $2,000 in America, in addition to airfare. The Pusan flights

alone were thus making a considerable contribution to strengthening our economy.

When I finished my tour as Ambassador, I was as proud of what we had done to

increase visa issuance as I was of anything else I had accomplished during my tour.

All this came to an end after I left. An "inspection team from the Department

of State was critical of what we had done. Visa issuance in Pusan ended, procedures

in Seoul were made more arduous and the visa lines winding around the Embassy

building in Seoul once again began to grow longer.

The Consular employees in Seoul, those "on the firing line" issuing visas, have

done their best to cope. My quarrel is not with them. It is with those in Washington,

who for reasons best known to themselves, chose to undo what we had done.

"Visa fraud" is the main reason cited for the re-imposition of more restrictive procedures. In this case, facts and figures on so-called non-returnee and rejection rates

provide only murky evidence at best. What is crystal clear, however, is that the vast

majority of Koreans today do not wish to stay in the U.S. "at any cost" since there

are more attractive opportunities for them at home. In fact, many who had emigrated to this country in earlier decades are deciding to return home in response

to the enhanced level of affluence and the strengthened democratic procedures enjoyed in Korea today.

"Fear of terrorism" was another reason cited. South Korea poses no threat whatsoever to the United States in this area. It is one of our closest and most trusted

allies, and its anti-terrorist screening procedures are among the best in Asia.

The time has come to recognize realities in Korea. Koreans want to come to America. They enjoy their visits, they buy American goods, and they return home. We

should do all we can to aid and support this healthy, friendly process. Senator Murkowski's bill is a step in the right direction, and I fully support it. In so doing, I

am confident that once S. 290 proves itself as a valid piece of legislation, it will be

easier to broaden the pilot programs so that it applies to all Koreans desiring to
18

come to the United States for tourism, business, education, medical treatment, or

whatever.

In closing I want to say that I have been very surprised to learn that at least

one senior Embassy officer, who recently served in Seoul in the Consular Section,

is against a visa waiver program. I am told that he came back to Washington angry

and fed up with what he had to contend with in Seoul. I know this man, and respect

him. I believe that he is suffering from a sort of "combat fatigue" resulting from

having to administer and enforce an outdated system, that puts everyone under

great pressure•those seeking visas as well as those issuing them. The number of

anguished calls I receive in my current capacity as Chairman of The Korea Society

on visa matters that clearly should have been resolved with no problem is a clear

indication of a cumbersome system that serves neither country's interest. Waiting

in long lines for a visa does not bring out the best in anyone, including Koreans.

And those Consular Officers having to deal with endless lines of often irate Koreans

have my deepest sympathy. They do their best, and deserve credit. Beyond that,

they deserve relief.

We have a chance to move along a process that cries out for reform. Let us not

miss this opportunity.

Thank you very much.

Senator ABRAHAM. Finally, we will also place in the record statements submitted to the subcommittee from the American Chamber

of Commerce in Korea, the Travel Industry Association of America,

the Western States Tourism Policy Council, and the Airports Council International, all of which have been requested, and we are

more than happy to include.

[The prepared statements referred to follow:]

PREPARED STATEMENT OF TAMI OVERBY, EXECUTIVE DIRECTOR, THE AMERICAN

CHAMBER OF COMMERCE IN KOREA

Mr. Chairman and Members of the Committee:

Thank you very much for the opportunity to share the views of our members on

this important issue. The American Chamber of Commerce in Korea represents over

800 companies and 1,800 members. These companies range in size from very large

like General Motors, Hewlett Packard, and Intel to small independent firms.

I am pleased to tell you that American business is doing very well in Korea. I'm

sure you are all aware that Korea is the United States' fifth largest export market

and seventh largest overall trade partner. Last year, we did in excess of $50 billion

of two-way trade between our countries. That represents a lot of American jobs as

a result of this dynamic trading relationship.

Korea's success is also represented in the fact their economy is now the eleventh

largest in the world. Many experts predict Korea will be among the top seven economies of the world by the year 2010. They recently joined the Organization for Economic Cooperation and Development (the so called "Rich Country's Club") and are

active participants in the World Trade Organization and the Asia Pacific Economic

Cooperation.

I nave been an active member of the Chamber for over nine years and during that

time the Early Entry Into the Visa Waiver Pilot Program has been the largest single

U.S. issue facing our members. Although our Embassy staff are doing an incredible

job, and please let me emphasize that point again, the staff at the U.S. Embassy

in Seoul are the among the very best in the world. They work long hours under very

difficult conditions to help promote U.S. trade. They continue to process more nonimmigrant visas in Seoul than any other consulate in the world. Last year they

processed over 550,000 non-immigrant applications and they expect to do over

750,000 this year; all this with no appreciable increase in resources. I would also

be remiss if I did not mention how responsive the consular affairs people have been

at the Department of State over the last four years. They have worked very hard

to find additional resources and most important; creative, new ways to process more

applications with little additional resources.

The reality of the situation is that no matter how many applications they process,

there are more and more Koreans choosing other destinations simply because our

process is too onerous and time consuming. Consider the fact that sixty two countries around the world have already given Korea visa waiver status and other countries like Australia actually have the airlines issuing the visas in less than twenty

four hours. Even though the U.S. is still the destination of choice, many Koreans

are choosing other destinations because of the ease of travel.
19

Many people were surprised when the American Chamber started actively promoting early entry for Korea in the VWPP four years ago. But when you look at

the facts, it is very clear that the U.S. visa process is an impediment to U.S. trade.

Chamber members who live and work in Korea strongly believe it would be in the

best interests of the United States for Korea to be awarded early entry into the

VWPP.

Every American businessperson in Korea has heard visa nightmare stories about

companies losing a big deal because they were not able to get the Korean buyer a

visa fast enough. Today's business environment is extremely competitive ana Korea's other trade partners are aggressively taking advantage of our visa difficulties.

Koreans have the highest rate of giving up their U.S. citizenship among foreigners

who have immigrated to the U.S. The number of Koreans applying to immigrate to

the U.S. has also dropped significantly. The American Chamber of Commerce in

Korea believes it would be in the best interests of the United States for Korea to

be admitted to the VWPP as soon as possible. We believe it is bad business to ask

your seventh largest trading partner to wait.

Thank you very much for your consideration and I would be happy to answer any

questions.

TAM OVERBY, HILLSIDE VILLAGE, C-6, ITAEWON-DONG, YONGSAN-KU, SEOUL, KOREA

PROFESSIONAL EXPERIENCE

American Chamber of Commerce in Korea, Seoul, Korea 1995-Present, Executive

Director

• Manage day to day activities of the organization, which is 3rd largest Chamber

in Asia

• Increased membership of over 800 companies and 1,900 individuals by 17 percent

• Supervise staff of 10 employees in a dynamic multinational environment

• Responsible for annual budget in excess of $1.5 million

• Liaison with the US Embassy, military and other organizations on issues on

common interest

• Coordinate annual Trade Issues publication as well as annual Washington

Doorknock trip

• Primary spokesperson for organization

William M. Mercer Limited, Seoul, Korea 1991-1995, Director of Marketing

• Networking with senior expatriate and Korean executives of foreign and leading

Korean companies to introduce Mercer services

• Managed all marketing activities in Korea; including the preparation and controlling the annual budget

• Established and maintained relationships with key Korean and US government

officials to facilitate the flow of reliable market data

• Developed and managed an extensive database of clients and prospects of companies doing business in Korea

• Produced quarterly newsletter informing clients and prospects about current issues in the Korean labor environment

• Since joining Mercer, increased office revenue by 570 percent, number of new

clients by 425 percent and number of projects by almost 300 percent

American International Group, Seoul, Korea 1988-1991, Group Manager

• Managed the Group Benefits department of ALICO with staff of 8 Korean employees

• Developed and introduced new group products into the Korean market place

• Conducted extensive market research on the Korean market for the home office

• Provided services to AIG worldwide clients in Korea

EDUCATION

University of Arkansas, Bachelor of Business Administration, 1981

ORGANIZATIONS

The American Chamber of Commerce in Korea
Positions Held:

Vice President, 1994-1995

Governor, 1991-1994

Human Resources Committee Co-Chair, 1991-1994

Membership Committee Co-Chairman, 1989-1991

J\ctiuitlP'*? ' Washington Doorknocks, 1990-1997

AMCHAM-ROK Government Conferences, 1989-1993

SUMMARY OF STATEMENT

TOURISM

• Tourism is the 2nd largest employer in the U.S.

• International tourists visiting the U.S. bring jobs to Americans

• According to INS 1995 Statistical Yearbook 22.6 million visitors entered the

U.S. & Koreans were the fastest growing segment

• Last year, Korean travelers spent over $1.3 billion in the U.S.

KOREA'S CURRENT ECONOMIC SITUATION

• Korea is the 11th largest economy in the world

• World Bank estimates their economy will be in the top 7 by 2010

• Korea is the U.S.'s 5th largest export market & 7th overall trading partner

• Korean economy has average 8 percent growth per year over tine last 3 decades•unprecedented growth

• Korea is one of the few countries in the world where the U.S. enjoys a surplus

• Unemployment remains stable around 3 percent

• As Korean economy grows, Korean outbound travel will continue to rapidly increase

• KNTO estimates over 4.5 million Koreans will travel abroad this year and they

predict 8.5 million to travel abroad by 2004

• According to KNTO estimates, the average Korean visiting the U.S. had a mean

annual household income of $59,800 and mean expenditures, excluding airfare

were $2,014

CURRENT SITUATION IN U.S. EMBASSY IN KOREA

• The U.S. Embassy in Seoul continues to process more non-immigrant visas than

anywhere else in the world; in 1996 they processed over 550,000 and they estimate 750,000 this year. All this is with no appreciable increase in resources!

• The U.S. remains the destination of choice and Korean travel to the U.S. continues to grow at over 20 percent per year in spite of the visa difficulties

• Other countries have seen a much higher increase in Korean travel (50-2400

percent)

• Demand for U.S. visas in Korea will continue to explode while consular resources are expected to remain flat

• The U.S. consular staff in Seoul should be commended for their heroic efforts

to issue as many legitimate visas as possible with creative efforts to streamline

efforts (appointment by fax, referral programs, batch processing, delivery by

courier to name a few)

• In spite of their best efforts, other countries are aggressively attracting Korean

travelers; 47 countries offer Koreans visa free travel

• U.S. business is being hurt by not being able to obtain visas fast enough for

our employees and customers

• U.S. airlines report a high percentage of last minute cancellations due to inability to obtain a visa

RECOMMENDATIONS

• Start treating Our Major Trade Partners as Valued Friends

• Support Legislation Giving Korea Early Entry into the VWPP Based on Strong

Economic Ties

• Make the VWPP Permanent
21

Exports to Korea by State (Thousand J)

tut. Exports Rank 1M3 Exports 1t»4 Exports 1MS Exports 1M1-K % Changs 1M3-I5 S Change

CaMoma 3 3.749.2>1 4,557.545 6.406.608 70 9 2657.337

New rock 1 1.226.555 1.344.736 1954.820 59 1 726.254

Washington 3 1.369.521 1.408.268 1.851.638 33 3 462.117

Yexas 6 >50.229 923.574 1.473.961 965 723.732

New Jersey 3 918.214 1.260.852 1.359.592 48 1 441,378

Ihnois 6 533.155 696.100 1.266 163 137 5 733.008

Virginia 4 524.489 656.415 971.576 85 2 447.087

Oregon 4 426.478 550.931 936.467 1186 507.990

Connecticut 3 678.488 577.526 763.287 12 5 84,795

Pennsylvania 7 482.398 641,067 694.907 44 1 212.509

Ohio 7 315.341 374.221 537.984 706 222.644

Minnesota 8 188550 261.158 435.433 130 9 246.883

Massachusetts 9 319.958 348.357 432.455 35 2 112.497

Georga 4 105,502 174,055 429.058 306 7 323.556

Michigan 11 175.862 243.046 367.219 108 8 191.358

Florida 16 182.317 179.183 357.783 96.2 175.466

Kansas 4 67.304 107.716 341.460 407 3 274.155

Tennessee 8 '81.846 230,385 284.448 564 102.601

Colorado 13 154.242 174,829 250.387 62 3 96.145

Arizona 12 177.455 206.249 230.186 29 7 52.733

North Carolina 12 114.589 132.208 183.194 59 9 68.605

Indiana 9 116.101 158.728 182.989 576 66.889

Delaware 7 136.938 155.869 172.484 26 35.547

Wisconsin 12 106.536 123.411 167.440 57.2 60.904

Nebraska 3 105.012 146.108 160.762 53.1 55.750

Utah 4 59.516 89,578 159.447 167.9 99.931

Alabama 6 104.862 125.219 140.922 344 36.060

Mtssoun S 93.061 104.876 131.026 40.8 37.966

South Carolina 1 115.506 112.389 115.241 -02 -267

Kentucky 7 50.758 72.225 106.956 1107 56.200

Louisiana 10 57.29. 61.075 98.886 72.6 41.593

Alaska 3 92.649 75.568 93.700 09 851

Iowa S 56.669 82.974 87.293 54 30.624

Oklahoma 10 30.234 45.767 66.846 121 1 36.612

Puerto Rico 16 49.468 43.099 61 719 247 12.230

Maryland 19 44.218 48.138 60.820 ttS 16.602

New Mexico 2 56.059 68.693 59.146 55 3.088

New Hampshire 7 24.715 40.721 52.521 112.5 27,806

Maine 6 18.145 18.240 49.241 1714 31,097

Arkansas 9 31.739 33.786 3?.239 17.3 5.501

Idaho 14 26.644 29.248 35.465 331 8.821

Mississippi 10 13.833 15.967 29.319 112 15.486

Rhode Island 6 14.918 24.780 28.570 915 13,652

Hawaii 3 18.968 26.187 24.766 306 5.798

Wast Virginia 10 18.121 16.737 21.165 168 3.044

District ol Columbia 30 47.779 39,915 19.182 -599 -28,597

Virgin Islands 2 427 18.253 17.337 over 1.000 16.910

Nevada 1 7.384 11.039 13.273 79 7 5.889

Vermont 9 14.523 5.397 5.748 -604 -6.774

North Dakota l} 502 1.074 2.852 4665 2.350

South Dakota 20 1.532 2.629 1.043 31.9 J89

Wyoming 16 1.137 1.105 876 •23 -261

Unallocated na 591.916 975.267 1.675.644 183.1 1.683,728

US Total na 14,776,170 18,028,362 25,413,201 72 10,637,031

Page 1
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PREPARED STATEMENT OF WILLIAM S. NORMAN, PRESIDENT AND CEO, TRAVEL

INDUSTRY ASSOCIATION OF AMERICA

Mr. Chairman, on behalf of the nation's travel and tourism industry, I appreciate

the opportunity to testify before you today.

I am William S. Norman, President and Chief Executive Officer of the Travel Industry Association of America (TLA), the national, non-profit organization representing all components of the $467 billion U.S. travel industry. TIA's mission is to promote and facilitate increased travel to and within the United States. It is on behalf

of TLA and the entire travel and tourism industry that I testify today on the Visa

Waiver Pilot Program (VWPP), and its positive impact upon tourism in the United

States. TLA, and the travel and tourism industry it represents, fully support the

highly successful VWPP program, and believe its extension, expansion and nopefully

permanency would serve the best interest of our nation.

As this committee well knows, travel and tourism is an enormous business in the

U.S.; it generated $467 billion in expenditures and over 6.6 million direct jobs in

1996. International travel is a huge component of this business. The number of

international visitors to the U.S. in 1996 increased 7 percent to a record 46.3 million, generating $84 billion in expenditures and over one million direct jobs. Our

trade surplus, attributable to international visitors continuing to spend more here

than American travelers do abroad, increased to $21.6 billion, constituting a 8 percent increase over 1995. I cannot emphasize enough that any increase in inbound

international tourism means a proportional increase in revenue generation in the

U.S. However, I must note that the U.S. ranking as a tourism destination is still

a distinct second. We as an industry are committed to increasing our nation's market share•with corresponding benefits to our economy•and remaining competitive

with other countries. In asking for extension, expansion and hopefully permanence

for the VWPP, we are in effect asking for your help in meeting this goal for our

nation and industry. The VWPP, created by your Committee's action, which took effect on July 1, 1988, currently has 25 countries participating, and this nation would

benefit if more countries were added. Burgeoning markets such as Brazil and South

Korea, for example, our 7th and 8th largest international tourism markets respectively, would be welcome additions to this program, as will other worthy countries

which fall within the construct of the VWPP rules presently outlined.

Let me give you an example of one way we are working to increase our market.

Earlier this month, I had the opportunity to see the business of international tourism in action. From June 2nd to June 4th, TLA convened its 29th Annual Discover

America International PowWow. Held this year in Nashville, TN, the purpose of

International PowWow is to provide a forum in which foreign tour operators and

other international travel and tourism purchasers can meet with U.S. tourism product providers. This extraordinary conference and marketplace gathers together over

1400 international travel and tourism buyers and close to 4000 U.S. suppliers to negotiate rates and quantities of future Visit USA business, and what transpires in

the course of three days is nothing short of miraculous. When these people meet in

prescheduled appointments, they establish and renew valuable face-to-face contact,

making business arrangements and negotiating contracts, which translates into billions of dollars of business. Prior surveys have estimated that between $2.5 to $3

billion worth of future business is contracted or negotiated in a mere three days at

TIA's Discover America International PowWow.

How does this relate to promoting and facilitating increased travel, by international visitors, to the United States? International delegates at TIA's International PowWow account for more than 85 percent of the organized tour business

to the U.S. Since between 12•15 percent of all international visitors to the U.S. use

an organized tour, that is a significant percentage of our visitors.

Clearly, international tour and travel producers are able to more easily sell an

organized tour package to the U.S. by also stressing the ease of travel and the absence of a need for a visa. Potential customers are more likely to select a U.S. travel

destination or tour product if they do not have to wait in long lines to receive visas.

In countries where hooking a tour must be done far in advance of securing a visa,

tour sales, which often require deposits, are less certain. It is this simple•easier

travel to the U.S. means bigger business for the thousands of small businesses that

comprise the majority of the travel and tourism industry.

Overall, 1996 was a banner year for travel and tourism, as it was first time in

three years that the U.S. has had an increase in international visitors. While this

is due to many factors, the influence of the addition of certain countries to the Visa

Waiver Program is an undeniable factor. For example, let us look at Argentina,

which was added to the VWPP list in July, 1996. In that year, Argentina ranked

14th in the number of visitors it sent to the U.S., sending 426,000 tourists to our
28

nation. Impressive, but Argentina was not always ranked so high. In the year preceding inclusion in the VWPP, Argentinean tourists numbered 382,000. In the year

of their inclusion in the VWPP, there was an increase of 44,000 visitors, up 11.5

percent. As stated before, an increase of this magnitude means a proportional increase in revenue generation in the U.S. There is a domino effect at work here•

travelers from abroad translate into big profits for small businesses in cities and

towns across our nation. The domino effect can be seen in other ways also, for when

foreign travelers visit the U.S., they affect not only the travel industry segment, but

also a wide variety of other businesses within the community. And their travels do

not only benefit our communities' economy•it also generates employment. International travel to the U.S. supported nearly one million jobs in 1996.

But let's bring this a little closer to home. As you well know, travel and tourism

plays a huge role in the economy of many of your states; such as Michigan, Massachusetts, Iowa, California, and Arizona, which all contain attractive and desirable

destinations. However, for today Mr. Chairman, lets look to Michigan specifically as

an example. Nearly 13,000 jobs were created in that state from international tourism, and 122,700 jobs were created by domestic travelers.

These jobs are not only in the traditional hospitality•related industries such as

hotels and restaurants, but also in areas such as the retail industry which is flourishing through trade. As foreign visitors use their purchasing power in Michigan,

totaling $7.9 billion annually, they are also supporting small businesses.

Looking nationally, allow me to restate that the Visa Waiver Program is vital to

the health of our industry and our nation. To illustrate this, imagine what would

occur if the Program were allowed to expire. First, we as a nation would no doubt

lose valuable business. Trade is in reality a two way street, and while we must treat

our trading partners with respect, we have also learned to keep a wary eye open

to the competition. If we were to burden the overseas travelers by demanding that

they fill out yet more paperwork, spend more time waiting for clearance, and subject

themselves to unwarranted inspections, they may seek seemingly more attractive alternatives. Our overseas visitors are sensitive to the way they are treated, and

make no mistake that if they feel unwelcome they may take their business elsewhere. The travel and tourism business is a highly competitive one, and the U.S.

competes with hundreds of other countries for the same business. So, if another

country welcomes certain overseas visitors with open arms, while the U.S. requires

form alter form, the other country will have a competitive advantage. Prior to the

enactment of the Visa Waiver Program, national surveys indicated that the lack of

visa waiver was a major complaint of international visitors to the U.S.

Second, if the VWPP were allowed to expire, it would place an enormous burden

on our consulates overseas. If such a demand were placed on the State Department,

it may have to respond by adding more employees to posts overseas and thereby

draining ite existing budget, and adding to perceived government waste of taxpayer

dollars. While the number of employees needed can only be imagined, it has previously been estimated that the cost of posting each American to the field now tops

$100,000 in addition to salary. It should also be noted that this program has played

a vital role in urging countries to implement technological advances such as machine readable passports, providing increased efficiency in regards to passenger

data. In the spirit of improving government efficiency that this Congress has embraced, we should not allow the scenario of expiration to play out.

Finally, as this program is reciprocal, the removal of certain countries from our

visa waiver list could conceivably translate into a greater travel burden for our

American citizens traveling abroad. In fact, when visa waiver was first enacted it

became an inducement for Japan to offer reciprocal privileges to U.S. citizens traveling to their country. Presently, Japan is one of our most lucrative tourism markets,

ranking third in annual arrivals behind Canada and Mexico. In fact, outside of Canada and Mexico, 10 of the 14 remaining top U.S. tourism generating countries are

VWPP members. We must continue to grow this market by extending to other nations the same respect and welcoming attitude that they extend to us. From a economic and business generating standpoint, the aforementioned non-VWPP countries•Brazil, South Korea, Venezuela, and Taiwan•would make excellent candidates for inclusion, and should be subject to standardized, objective qualification

criteria.

While extremely popular and beneficial, the travel and tourism industry recognizes that this program is not perfect, and that legitimate national interest questions remain. We are aware of the substantive concerns which several Members of

Congress have regarding this Program, specifically in the area of the recording of

overstay rates. It is our understanding that, hopefully, this particular problem is

being addressed. The INS has announced that a more effective method of border exit

calculation should be operational in early 1998. On that note, I believe that one
29

point must be made crystal clear, and that is that we at TIA, and the industry we

represent, wish to be of service in addressing any concerns you may have, and are

dedicated to making the Program work for all concerned. Yet if we are to seriously

examine such problems and reach meaningful and realistic solutions, we need sufficient time to develop creative answers without the threat of expiration every year.

With all due respect, one year may be barely enough time to strategize improvement

methods for an existing government program, let alone implement them. Make no

mistake that this program has proven itself a viable and valuable program for almost 10 years, and as such is a worthy candidate for permanency. At minimum, an

approval of a significant, multi-year extension and expansion seems reasonable if

this would allow sufficient time to implement, as one example, an efficient successor

method of overstay calculation. Last year's bill allowed for significant improvement

in this program by including provisions for removal of those countries who no longer

meet the criteria required of them; we look forward to adding additional improvements to this year's legislation.

In closing, I would like to stress again that ease of travel to this country is directly proportional to the travel and tourism revenue generated here. TIA and the

travel ana tourism industry are therefore dedicated to making the VWPP a success,

and we will do everything in our power to ensure its permanence and expansion.

Thank you for allowing me this opportunity to stress to you the important role that

VWPP plays in international tourism, and therefore our U.S. economy. I would be

happy to answer any questions you may have.

44-272 - 97
30

THE ECONOMIC IMPACT OF

TRAVEL AND TOURISM ON

-ARIZONASource Travel Industry Association; Tourism Industries/International Trade Administration

In 1994, the travel and tourism industry

was a powerhouse of economic activity for

Arizona. Billions of dollars in expenditures

were generated and thousands ofjobs were

supported by domestic and international

travelers.

JRAYJEL EXPENDITURES IN

ARIZONA:

Domestic:

International:

$5.9 billion

$1.3 billion

TOTAL EXPENDITURES: $72 billion

JOBS SUPPORTED RV;

Domestic Travelers: 104,200

International Travelers: 23,500

TOTAL JOBS: 127,700

TAX REVENUE GENERATED BY

TRAVEL AND TOURISM:

Domestic

Travelers

International

Travelers:

LOCAL: $117.8 mil. $11.3 mil.

STATE: $309.2 mil. $72.8 mil.

FEDERAL: $483.7 mil. $80.3 mil.

TOTAL TAX REVENUE: $1,075 billion

*TRA VEL AND TOURISMISARIZONA'S

SECOND-LARGESTEMPLOYER.

Nationally, travel and tourism is a powerful

engine of economic growth in the United

States.

• In 1995, travel and tourism generated

an estimated $467 billion in

expenditures.

• Travel and tourism was the nation's

leading export in 1995. More than

$80 billion in expenditures was

generated by 43.4 million international

visitors, creating a $19.5 billion

surplus.

• Travel and tourism directly supports

6.6 million jobs, including 684,000

executive-level positions. The

industry indirectly supports an

additional 8.9 million jobs.

• Travel and tourism generates more

than $64 billion in tax revenue a year

for federal, state, and local

governments.

• International visitors spent an

estimated $218 million a day on their

trips to the U.S., while Americans

spent $987 million a day on domestic

trips.

• Travel and tourism generated $116

billion in payroll in 1995.
31

THE ECONOMIC IMPACT OF

TRAVEL AND TOURISM ON

-CALIFORNIASource: Travel Industry Association; Tourism Industries/International Trade Administration

In 1994, the travel and tourism industry

was a powerhouse of economic activity for

California. Billions of dollars in

expenditures were generated and

thousands of jobs were supported by

domestic and international travelers.

IRAYEL EXPENDITURES IN

CALIFORNIA;

Domestic:

International:

$44 billion

$11.5 billion

TOTAL EXPENDITURES: $55.5 billion

JOBS SUPPORTED BY:

Domestic Travelers: 604,000

International Travelers: 187,200

TOTAL JOBS: 791,200

TAX REVENUE GENERATED BY

TRAVEL AND TOURISM:

Domestic

Travelers

International

Travelers:

LOCAL: $1.08 bil. $284 mil.

STATE: $1.7 bil. $394.1 mil.

FEDERAL: $4 bil. $890.6 mil.

TOTAL TAX REVENUE: $83 billion

*IN 1994, CALIFORNIA WAS THE

NUMBER ONE TRA VEL AND TOURISM

STATEIN THE US.

Nationally, travel and tourism is a powerful

engine of economic growth in the United

States.

• In 1995, travel and tourism generated

an estimated $467 billion in

expenditures.

• Travel and tourism was the nation's

leading export in 1995. More than

S80 billion in expenditures was

generated by 43.4 million international

visitors, creating a $19.5 billion

surplus.

• Travel and tourism directly supports

6.6 million jobs, including 684,000

executive-level positions. The

industry indirectly supports an

additional 8.9 million jobs.

• Travel and tourism generates more

than S64 billion in tax revenue a year

for federal, state, and local

governments.

• International visitors spent an

estimated S218 million a day on their

trips to the U.S., while Americans

spent S987 million a day on domestic

trips.

• Travel and tourism generated $116

billion in payroll in 1995.
32

THE ECONOMIC IMPACT OF

TRAVEL AND TOURISM ON

-ILLINOISSource: Travel Industry Association; Tourism Industries/International Trade Administration

In 1994, the travel and tourism industry Nationally, travel and tourism is a powerful

was a powerhouse of economic activity for engine of economic growth in the United

Illinois. Billions of dollars in expenditures States.

were generated and thousands ofjobs were

supported by domestic and international • In 1995, travel and tourism generated

travelers. an estimated $467 billion in

expenditures.

TRAVEL EXPENDITURES IN

ILLINOIS: • Travel and tourism was the nation's

leading export in 1995. More than

Domestic: $14.9 billion S80 billion in expenditures was

International: SI.4 billion generated by 43.4 million international

visitors, creating a $193 billion

TOTAL EXPENDITURES: $163 billion surplus.

• Travel and tourism directly supports

6.6 million jobs, including 684,000

JOBS SUPPORTED BY: executive-level positions. The

industry indirectly supports an

Domestic Travelers: 227,300 additional 8.9 million jobs.

International Travelers: 23,200

• Travel and tourism generates more

TOTAL JOBS: 250,500 than $64 billion in tax revenue a year

for federal, state, and local

TAX REVENUE GENERATED BY governments.

TRAVEL AND TOURISM:

• International visitors spent an

Domestic International estimated $218 million a day on their

Travelers Travelers: trips to the U.S., while Americans

spent $987 million a day on domestic

LOCAL: $336.9 mil. $14.1 mil. trips.

STATE: $592.6 mil. $68.6 mil.

FEDERAL: $1.64 Ml. $128.6 mil. • Travel and tourism generated $116

billion in payroll in 1995.

TOTAL TAX REVENUE: $2.8 billion

•TRAVEL AND TOURISM THE THIRD

LARGESTEMPLOYER INILLINOIS.
33

THE ECONOMIC IMPACT OF

TRAVEL AND TOURISM ON

-IOWASource: Travel Industry Association; Tourism Industries/International Trade Administration

In 1994, the travel and tourism industry

was a powerhouse of economic activity for

Iowa. Billions of dollars in expenditures

were generated and thousands ofjobs were

supported by domestic and international

travelers.

TRAVEL EXPENDITURES IN IOWA:

Domestic:

International:

S3 billion

$77.8 million

TOTAL EXPENDITURES: S3.04 billion

JOBS SUPPORTED BY:

Domestic Travelers: 47,300

International Travelers: 1,600

TOTAL JOBS: 48,900

TAX REVENUE GENERATED BY

TRAVEL AND TOURISM:

Domestic International

Travelers Travelers:

LOCAL: $35.7 mil. $.6 mil.

STATE: $180.4 mil. $3.7 mil.

FEDERAL: $274 4 mil. $4.7 mil.

TOTAL TAX REVENUE: $499.6 million

Nationally, travel and tourism is a powerful

engine of economic growth in the United

States.

• In 1995, travel and tourism generated

an estimated $467 billion in

expenditures.

• Travel and tourism was the nation's

leading export in 1995. More than

$80 billion in expenditures was

generated by 43.4 million international

visitors, creating a $19.5 billion

surplus.

• Travel and tourism directly supports

6.6 million jobs, including 684,000

executive-level positions. The

industry indirectly supports an

additional 8.9 million jobs.

• Travel and tourism generates more

than S64 billion in tax revenue a year

for federal, state, and local

governments.

• International visitors spent an

estimated S218 million a day on their

trips to the U.S., while Americans

spent $987 million a day on domestic

trips.

• Travel and tourism generated $116

billion in payroll in 1995.
34

THE ECONOMIC IMPACT OF

TRAVEL AND TOURISM ON

-MASSACHUSETTSSource. Travel Industry Association; Tourism Industries/International Trade Administration

In 1994, the travel and tourism industry

was a powerhouse of economic activity for

Massachusetts. Billions of dollars in

expenditures were generated and

thousands of jobs were supported by

domestic and international travelers.

TRAVEL EXPENDITURES IN

MASSACHUSETTS:

DomesticInternational:

$7.7 billion

$1.52 billion

TOTAL EXPENDITURES: $9.2 billion

JOBS SUPPORTED RV:

Domestic Travelers:

International Travelers:

94,900

23,200

TOTAL JOBS: 118,100

TAX REVENUE GENERATED BY

TRAVEL AND TOURISM:

Domestic

Travelers

International

Travelers:

LOCAL:

STATE:

FEDERAL:

$125.6 rail.

$233.1 mil.

$1.1 bil.

$11.8 mil.

$66.9 mil.

$111.7 mil.

TOTAL TAX REVENUE: S!.26 billion

TRAVEL & TOURISMIS THEFOURTHLARGEST EMPLOYER IN

MASSASCHUSETTS.

Nationally, travel and tourism is a powerful

engine of economic growth in the United

States.

• In 1995, travel and tourism generated

an estimated $467 billion in

expenditures.

• Travel and tourism was the nation's

leading export in 1995. More than

$80 billion in expenditures was

generated by 43.4 million international

visitors, creating a $19.5 billion

surplus.

• Travel and tourism directly supports

6.6 million jobs, including 684,000

executive-level positions. The

industry indirectly supports an

additional 8.9 million jobs.

• Travel and tourism generates more

than S64 billion in tax revenue a year

for federal, state, and local

governments.

• International visitors spent an

estimated S218 million a day on their

trips to the U.S., while Americans

spent $987 million a day on domestic

trips.

• Travel and tourism generated $116

billion in payroll in 1995.
[

35

THE ECONOMIC IMPACT OF

TRAVEL AND TOURISM ON

-MICHIGANSource: Travel Industry Association; Tourism Industries/International Trade Administration

In 1994, the travel and tourism industry

was a powerhouse of economic activity for

Michigan. Billions of dollars in

expenditures were generated and

thousands of jobs were supported by

domestic and international travelers.

TRAVEL EXPENDITURES IK

MICHIGAN:

Domestic:

International:

$7.9 billion

$586.6 million

TOTAL EXPENDITURES: $8.5 billion

JOBS SUPPORTED BY;

Domestic Travelers: 122,700

International Travelers: 12,700

TOTAL JOBS: 135,400

TAX REVENUE GENERATED BY

TRAVEL AND TOURISM:

Domestic

Travelers

International

Travelers:

LOCAL: $116.7 mil. $.6 mil.

STATE: $781.5 mil. $26.4 mil.

FEDERAL: $1.2 bil. $54.6 mil.

TOTAL TAX REVENUE: $13 billion

Nationally, travel and tourism is a powerful

engine of economic growth in the United

States.

• In 1995, travel and tourism generated

an estimated $467 billion in

expenditures.

• Travel and tourism was the nation's

leading export in 1995. More than

$80 billion in expenditures was

generated by 43.4 million international

visitors, creating a $19.5 billion

surplus.

• Travel and tourism directly supports

6.6 million jobs, including 684,000

executive-level positions. The

industry indirectly supports an

additional 8.9 million jobs.

• Travel and tourism generates more

than $64 billion in tax revenue a year

for federal, state, and local

governments.

• International visitors spent an

estimated $218 million a day on their

trips to the U.S., while Americans

spent $987 million a day on domestic

trips.

• Travel and tourism generated $116

billion in payroll in 1995
36

THE ECONOMIC IMPACT OF

TRAVEL AND TOURISM ON

-PENNSYL VANIASource: Travel Industry Association; Tourism Industries/International Trade Administration

In 1994, the travel and tourism industry

was a powerhouse of economic activity for

Pennsylvania. Billions of dollars in

expenditures were generated and

thousands of jobs were supported by

domestic and international travelers.

IRAYEL EXPENDITURES IK

PENNSYLVANIA:

Domestic:

International:

$10.6 billion

$768.7 million

TOTAL EXPENDITURES: $11.4 bUlion

JOBS SUPPORTED BY:

Domestic Travelers:

International Travelers:

TOTAL JOBS:

169,600

14,400

184,000

TAX

TRAVEL AND TOURISM:

REVENUE GENERATED BY

Domestic

Travelers

International

Travelers:

LOCAL: $156 mil. $2.3 mil.

STATE: $420.9 mil. $40.4 mil.

FEDERAL: $ 1.07 bil. $64.6 mil.

TOTAL TAX REVENUE: $1.75 billion

*TRAVEL A TOURISM IS

PENNSYLVANIA'S FOURTH-LARGEST

EMPLOYER.

Nationally, travel and tourism is a powerful

engine of economic growth in the United

States.

• In 1995, travel and tourism generated

an estimated $467 billion in

expenditures.

• Travel and tourism was the nation's

leading export in 199S. More than

$80 billion in expenditures was

generated by 43.4 million international

visitors, creating a $19.5 billion

surplus.

• Travel and tourism directly supports

6.6 million jobs, including 684,000

executive-level positions. The

industry indirectly supports an

additional 8.9 million jobs.

• Travel and tourism generates more

than $64 billion in tax revenue a year

for federal, state, and local

governments.

• International visitors spent an

estimated $218 million a day on their

trips to the U.S., while Americans

spent $987 million a day on domestic

trips.

• Travel and tourism generated $116

billion in payroll in 1995.
37

WESTERN STATES TOURISM POLICY COUNCIL,

Carson City, NV, June 21, 1997.

Hon. SPENCER ABRAHAM,

Chair, Immigration Subcommittee,

Judiciary Committee, U.S. Senate,

Washington, DC.

Hon. EDWARD M. KENNEDY,

Ranking Democratic Member, Immigration Subcommittee,

Judiciary Committee, U.S. Senate,

Washington, DC.

DEAR CHAIRMAN ABRAHAM AND SENATOR KENNEDY: I am writing on behalf of the

Western States Tourism Policy Council, which is comprised of the tourism office directors of the 8 Western United States.

The WSTPC would like to express strong support for the permanent reauthorization of the U.S. Department of State's Visa Waiver Program, and qualified support

for Representative Jay Kim's H.R. 203, which would grant fee waivers to South Korean tourists and business people for a one-year trial period. Although this bill falls

short of our goal of immediate and permanent inclusion of South Korea in a permanent program, we regard it as a positive first step in the correct direction.

This is a crucial issue for the tourism industry of the Western United States.

Korea is currently the world's 11th largest economy, and is projected to be the 7th

largest by 2020, with a GNP of some $4 trillion. With a mean annual household

income of $59,800, the South Koreans are a people with large amounts of discretionary income. In fact, about 8 percent of the Korean population traveled overseas

in 1995, and spent over $2,000 per trip. And they love the Western States, with

California, Nevada, and Hawaii being their favorites.

It is estimated that lowering the existing barriers to Korean visitation would increase arrivals by about 200,000 the first year, generate $400 million in new spending and create 100,000 new jobs.

We are also opposed to any legislation, such as H.R. 627 and S. 290, which would

waive visa requirements only for South Koreans traveling with a group tour operator. This legislation would appear to exclude business travelers, and we must agree

with Representative Kim, who termed such a discriminatory measure as "an insult"

to the South Korean people. In purely economic terms, we believe that excluding

business travelers is a serious mistake, given the fact that many western cities are

currently attempting to expand their share of the business, convention, and incentive travel market, and others are seeking to increase business with the nations of

the Pacific Rim, where South Korea is a significant economic force.

Please include this letter in the hearing record. And thank you for your consideration.

Sincerely,

THOMAS G. TAIT,

Tourism Policy Council.

PREPARED STATEMENT OF THE AIRPORTS COUNCIL INTERNATIONAL•NORTH AMERICA

AND THE AMERICAN ASSOCIATION OF AIRPORT EXECUTIVES

Mr. Chairman and Members of the Subcommittee: The Airports Council International•North America (ACI-NA) and the American Association of Airport Executives (AAAE) appreciate the opportunity to submit written comments for the record

of the hearing held July 17, 1997.

ACI-NA's Members are the local, state and regional governmental entities that

own and operate commercial service airports in the United States and Canada.

ACI-NA member airports serve more than 90 percent of the U.S. domestic scheduled air passenger and cargo traffic and virtually all U.S. scheduled international

travel. AAAE is tile professional organization representing the men and women who

manage the primary, commercial service, reliever and general aviation airports

which enplane 99 percent ofthe passengers in the United States.

ACI-NA and AAAE have been in support of the Visa Waiver Pilot Program since

its inception in 1988. This program offers international travelers the opportunity to

visit the United States with minimal inconvenience and cost. Member countries

offer these same privileges to U.S. citizens through reciprocal agreements. The benefits of the program are clear. Government costs are significantly reduced as the Department of State is no longer required to staff many consular positions in Visa

Waiver countries. The Immigration and Naturalization Service (INS) is not required
38

to process visas or retain records for passengers arriving from these countries. Other

economic benefits are derived from the increase in tourism the program supports.

While we understand the need to fine tune certain aspects of the program to make

it as effective an enforcement tool as it is a facilitation tool, we believe that Congress could, through the introduction of technical legislative language, make adjustments to the program to achieve this goal. Following Congressional action the INS

and the Department of State, through the federal rulemaking process, could make

the necessary corrections to ensure that enforcement is not diminished should the

program become a permanent one.

Individual participants in the program are "otherwise eligible" for entrance into

the United States and pose little to no risk of overstaying their allotted time in this

country. Prior to being granted Visa Waiver privileges, applicant countries must

prove through historical performance that they meet the standards of the program,

one of which is "over-stay rates." Considering the criteria used to assess new entrants into the program, ACI-NA and AAAE believe that we should not risk losing

the considerable benefits gained from this program due to concerns, however valid,

related to other aspects of our immigration policy.

Again, thank you for the opportunity to present our support for the Visa Waiver

Pilot Program. Considering the program is set to expire, again, September 30 of this

year, we encourage you and your colleagues serving on this subcommittee to take

the necessary steps to make this a permanent program.

Senator ABRAHAM. At this point, we will turn to our first panel

and we will begin with Senator Frank Murkowski from the State

of Alaska.

Senator thank you for being here, and please proceed.

PANEL CONSISTING OF HON. FRANK H. MURKOWSKI, A U.S.

SENATOR FROM THE STATE OF ALASKA; HON. DANIEL K.

INOUYE, A U.S. SENATOR FROM THE STATE OF HAWAII; HON.

JAY KIM, A REPRESENTATIVE IN CONGRESS FROM THE

STATE OF CALIFORNIA; HON. GEORGE ALLEN, GOVERNOR,

COMMONWEALTH OF VIRGINIA, RICHMOND, VA; AND HON.

MAZD3 K, fflRONO, LD3UTENANT GOVERNOR, STATE OF HAWAH, HONOLULU, HI

STATEMENT OF HON. FRANK H. MURKOWSKI

Senator MURKOWSKI. Thank you very much, Mr. Chairman, and

I am particularly pleased at your note of optimism relative to some

degree of relief on the Korean visa waiver issue. I am very pleased

to be here with Governor Allen of Virginia; my good friend, Senator

Inouye from Hawaii; and especially let me acknowledge my good

friend, Lieutenant Governor Hirono. We had an opportunity to

meet very early in the morning at the Honolulu airport. I was

there overnight, all night, and she was bright and fresh, and we

had a very significant and meaningful discussion about the merits

of this particular legislation.

You have noted that our Governor has a statement for the

record. Unfortunately, he cannot be here. You noted that Donald

Gregg, former Ambassador to South Korea, had a statement for the

record, and he, regrettably, cannot be here to testify. I am pleased

that you have accepted their testimony in lieu.

This bill, S. 290, I think, really strengthens the relationship with

a close ally and an important trading partner of the United States.

It expands along the lines of the existing Travel Agent Referral

Program, also known as the TARP, that is currently in place in

South Korea. The bill, as you know, allows free travel, visa-free, for

Koreans traveling with approved tour operators. It includes safeguards to prevent illegal immigration, including, one, visitors must
39

be part of an approved tour group. The tour operator would be subject to a $200,000 bond requirement. The visitors must have a

round-trip ticket purchased up to 2 weeks in advance, and arrive

by a carrier that agrees to return them if they are deemed inadmissible. So I think most of the exposures are covered. On-time return

must be certified by the travel agent, and the travel agent must

submit sufficient information on travelers to allow U.S. authorities

to conduct national security checks.

The bill was introduced jointly because I think we feel that South

Koreans have been forced to wait an unduly unreasonable time,

long lines, for visas. They have been required to produce detailed

family and financial background material. I know the overburdened

consular offices in the U.S. Embassies are doing the best they can,

but I think a few examples stand out that are unique to South

Korea and probably don't have a parallel anywhere else.

President Kim Young Sam's sister was rejected the first time she

applied for a tourist visa to the United States. The daughter of the

chairman of the multi-billion-dollar Hyundai Corp., was rejected for

a student visa because of insufficient financial resources. I don't

know whether the chairman•perhaps he should try to get a higher-paying job, but in any event that wasn't satisfactory. The son of

the president of IBM in Korea was rejected because the consular

office did not believe the son would be a good student, even though

the son had already been accepted to a U.S. school.

Those are isolated cases, obviously, but I think they represent a

fair segment of the problems we have here in the inability to be

sensitive to reasonable visa requests and an opportunity to change

that dramatically. I wouldn't be here today, however, if we had a

process that seemed to be working and that the consular offices

could supply subjective criteria for refusing the visas. I believe the

standard for entry into the Visa Waiver Pilot Program should be

objective criteria, such as overstay rate, rather than an arbitrary

refusal rate standard, which is what is in effect now.

I think Korea deserves to be treated like many of our other close

allies. They are our fifth largest export market, home to some

37,000 American troops. They have an economy larger than all but

five countries currently in the Visa Waiver Program.

Now, the chart is over here on my left. If you will refer to it very

briefly, the Korea GDP growth for 1996 was 7 percent, substantially higher than the average for visa waiver countries. The 1996

unemployment rate is dramatically lower, 2 percent for Korea, and

8.8 for the average of the other visa waiver countries. So I think

there is an application there. Of the G-9 nations, only Japan and

the United States impose visa requirements on Korea. The State

Department has opposed efforts to seek relief for our Korean

friends. So, as a consequence, we are imploring your committee,

Mr. Chairman.

I would like to address some of the points that probably will be

covered in other testimony as well. But, briefly, recognizing that

time is limited, the State Department suggests that the Koreans

have no economic incentive to return to Korea. Well, I think the

Director of the State Department Office of Public and Diplomatic

Liaison suggested in a letter to me that the refusal rate in Korea
40

correlates to their unemployment rate. Well, you see the figures

there.

Is the officer suggesting that a country needs an unemployment

rate under 2 percent to qualify? I don't think so. Compared to other

countries, France is at 11.7; Germany, 12; Spain, 22. So Korea

more than qualifies under that criterion. The fact is that Korea has

a vibrant and expanding economy with a very low unemployment

rate, and Korea represents no more of a risk of mass migration

than most other visa waiver countries.

Mr. Chairman, recognizing the limitations on time, let me just

ask that the balance of my statement be entered into the record

which simply stipulates and substantiates the points I have made

for justification of a Visa Waiver Program criteria being applied to

Korean visitors to the United States. I think Senate bill 209 gives

Korea that chance. Without it, under current criteria, Korea is

probably at least 2, maybe 3 years away from qualifying for the

Visa Waiver Pilot Program, and I hope you will agree with me that

that is unacceptable. I think this legislation provides an important

interim step while we address whether the Visa Waiver Program's

criteria is being objectively applied to Korean travelers.

I thank the Chair.

Senator ABRAHAM. I thank you and, Senator, your full statement

will be included in the record. I also thank you for having brought

this issue to our attention. I think the first time that I was aware

of these issues pertaining to South Korea was when you raised the

questions with me, and I appreciate that.

[The prepared statement of Senator Murkowski follows:]

PREPARED STATEMENT OF SENATOR FRANK H. MURKOWSKI

Mr. Chairman, I first want to thank you for holding this hearing. In our increasingly global economy, travel and tourism play an increasingly important role in our

economy. The Visa Waiver Pilot Program (VWPP) is critical to the continued growth

of this sector.

I also want to thank you for inviting me to testify on S. 290, the Korea Visa Waiver Pilot Program. Joining me in cosponsoring this legislation are Senators Inouye,

Akaka, Thomas, and Senator Stevens and I am delighted to be joined by my colleague Senator Inouye today, along with the Governor of Hawaii. As the Chairman

is aware, Alaska's Governor is unable to be here today, but he has submitted testimony that I recommend to the Committee for review. I would also like to submit

for the record testimony from Ambassador Donald Gregg•the former United States

Ambassador to South Korea.

S. 290, simply expands along the lines of the existing Travel Agent Referral Program (TARP). S. 290 allows Koreans who are traveling with approved tour operators

to travel to the United States visa free. The bill also contains several safeguards

to prevent illegal immigration including provisions requiring that:

• Visitors must be part of an approved tour group. The Tour Operator will be subject to a bonding requirement;

• Visitors must have a round-trip ticket for up to 2 weeks, and arrive by a carrier

that agrees to return them if they are deemed inadmissible;

• On-time return be certified by the travel agent; and

• The travel agent must submit sufficient information on travelers to allow U.S.

authorities to conduct national security checks.

Before I continue, I would like to say a few words about the Visa Waiver Pilot

Program (VWPP) in general. Allowing visa free travel for eligible countries that are

close allies to the United States is an excellent concept that should be expanded.

Visa free travel encourages both tourism and trade and fosters closer ties between

the United States and the Visa Waiver countries. As the Chairman is aware, that

program now covers 25 countries. I support reauthorizing the program.
41

While I support the concept of the VWPP program, I do have reservations about

the subjective nature of the eligibility requirements. I find it ironic that the only

Asian country represented in the Pilot Program is Japan. I believe that our treatment of South Korean citizens applying for U.S. visas is fundamentally, inequitable

considering the realities of Soutn Korea today, and that is why I have introduced

legislation to allow Koreans who are traveling with approved tour operators to travel to the U.S. visa free.

South Korea has changed dramatically in the last several years, and is one of the

Asian miracles. It has a vibrant economy, an attractive job market, and rising living

standards. South Korea's unemployment rate for April 97 was 2.8 percent,•70 percent lower than the U.S. and 400 percent lower than Germany ana Prance. In fact,

the Korean Trade Minister informed me last month that they are actually experiencing significant reverse migration from the U.S. back to Korea.

South Korea is our 5th largest export market, the home of 37,000 American soldiers, a strong ally whose troops fought and died alongside our troops in war, and

that played a pivotal role in both the Cold War and in maintaining the peace today.

That is why I am concerned that South Koreans are treated like a poor Third World

country when it comes to applying for an American visa rather than a country that

has an economy that is larger than all but five of the countries currently participating in the Visa Waiver Pilot Program. Of the G-7 nations only Japan and the United States still impose visa requirements on Koreans.

I have heard many stories of Koreans forced to wait in long lines, produce detailed

family and financial background material, and hope that one of the overburdened

consular officers at the US. Embassy in Seoul can process the application before

their plane leaves. A few examples stand out:

• President Kim Young Sam's sister was rejected the first time she applied for

a tourist visa.

• The daughter of the Chairman of the multi-billion dollar Hyundai conglomerate

was rejected for a student visa based on insufficient financial resources.

• The son of the President of IBM Korea was rejected because he would not be

a good student, in the eyes of consular officer, even though he was already accepted at a school in the United States.

If these were just isolated incidents, I would not be here today. But these are not

isolated incidents and that is because the consular officers are applying subjective

criteria to determine who is refused a visa. And as the committee is aware, it is

only the refusal rate, and not the more important overstay rate, that matters for

purposes of entry into the VWPP.

Even with the problems evident in South Korea, I would like to recognize the fact

that the consular officers in Korea have made progress in addressing my concerns

about the long wait at the Embassy. Many of these reforms started under the able

guidance of our former Ambassador to South Korea, Donald Gregg, who has submitted testimony in support of S. 290. Some of this can be attributed to the Travel

Agent Referral Program (TARP) where travel agents do most of the leg work. Nevertheless, because Koreans tend to travel on short notice and during particular times

of the year, Koreans still must wait during the peak seasons to attain a visa. Regardless of how streamlined the process becomes, a traveler will prefer the path

that does not require dealing with a bureaucracy.

The State Department has opposed my efforts to seek relief for our Korean

friends. I would like to address some of their objections, because I think they fundamentally miss the point.

First, the State Department has simply tried to ignore that there is a problem.

Most recently, in an April 28, 1997 letter, Barbara Jones of the visa services section

of the State Department claimed that the difficulties faced by the U.S. Embassy in

Seoul have "never discouraged Korean tourism to the U.S. The number of Korean

visitors rose more than 20 percent in each of the last 6 years." An increase in visitors by 20 percent is certainly welcome, but if you compare this figure with the percentage increase in Korean visitors to countries that nave waived a visa requirement, it is obvious that Koreans are choosing other destinations.

New Zealand adopted a visa-free policy in 1993 and Canada followed in 1994.

New Zealand experienced a staggering 900 percent increase and Canada, starting

from a higher level, saw the number of Korean visitors double.

The State Department also argues that my legislation shifts the enforcement of

U.S. immigration laws onto foreign travel agents and creates a conflict of interest

for travel agents to adequately screen applicants. I disagree.

Tour operators, who are chosen by the United States, must provide U.S. authorities with information on all travelers before departure so that U.S. officials can conduct security checks before the Koreans travel to our country. Moreover, these tour-
42

ists would still present passports at the port of entry, where U.S. Customs would

catch fraudulent documents.

My legislation, would, in fact, provide more incentive for the tour operator to

screen applicants carefully than currently under TARP. Tour operators would guarantee the on-time return of everyone with a $200,000 bond. I do not believe a tour

operator is going to risk this amount of money on risky travelers.

The State Department has raised allegations of Koreans illegally crossing the U.S.

border from Canada, or attempting to enter the U.S. with fraudulent documents.

Both of these allegations, if true, are of great concern to me. But I have yet to receive any proof that these are anything other than sporadic anecdotal stories. In

fact, in testimony to a House subcommittee, Assistant Secretary of State Mary Ryan

said that Korea is in the lowest risk category for visa fraud.

Finally, the State Department seems to hold South Korea to unreachable goals.

Just last week, the Director of the State Department Office of Public and Diplomatic

Liaison observed that "the 1996 visitor refusal rate of 2.87 percent for Koreans correlates closely with the 2.8 percent Korean unemployment rate * * *." Is this officer

suggesting that Korea must have an unemployment rate below 2 percent before consular officials will believe that Koreans will not choose to stay in the U.S.? If that

is the criteria, we would have to kick out 23 of 25 of the current participating visa

waiver countries, including Germany (12 percent unemployment), Prance (11.7 percent unemployment) and Spain (22.8 percent unemployment).

More than anything else, Mr. Chairman, my legislation is intended to give the

South Korean people the respect they richly deserve. A close ally, an economic miracle, and an important trading partner, South Korea deserves a chance. S. 290 gives

Korea that chance. Without it, under the current criteria, Korea is at least 2 or 3

years away from qualifying for VWPP. This is unacceptable. I believe my legislation

provides an important interim step while we address whether the VWPP criteria is

being objectively applied to Korean travelers.

Senator ABRAHAM. Senator Inouye.

STATEMENT OF HON. DANIEL K. INOUYE

Senator INOUYE. Mr. Chairman, I thank you very much for placing S. 290 on your agenda. Before I proceed, may I request that my

full statement be made part of the record?

Senator ABRAHAM. It will be made part of the record.

Senator INOUYE. If I may just summarize•before I do, I am very

pleased to be in the company of my distinguished Lieutenant Governor from the State of Hawaii, Mazie Hirono. She is one of the national leaders in the move to support S. 290, so you will hear much

from her.

I am certain that many members of this panel and others will

speak most adequately on the economic advantages and business

importance of this measure. I am certain they will discuss with you

most convincingly those provisions that have been included in the

proposed program that would appropriately address the shortcomings that have been suggested by the administration.

Senator Murkowski has done a good job in setting forth the additional restrictions that we have placed in the measure that should

deter the possibility of illegal immigration, such as a short-term

pilot program of 3 years, a stay of no more than 15 days, a bonding

requirement, and the authority to cancel the program if such is

necessary.

I would like to, Mr. Chairman, however, spend the time to speak

of the proposed program from another vantage point. With the

demolition of the Berlin Wall and the demise of the Soviet Union,

we heralded the end of the Cold War, and as such I am certain we

agree that most Americans contend and believe that the dangers

that once existed during the Cold War period are no longer part of

the American lifestyle.
43

But I am certain that we all realize that at the 38th parallel of

the Korean peninsula, there are still massive military forces on

both sides. The general belief is that two-thirds of the North Korean forces are near or on the border. North Korea has 923,000 officers and men in the army, and it may be interesting to us to

know that 10,000 artillery pieces are aimed directly at one target,

the city of Seoul. In addition, North Korea has 85,000 men and

women in the air force and 40,000 in the navy. This military force

is second only to the People's Republic of China.

The South Korean Government from the beginning of its establishment soon after World War II has gone through a lot of turbulence politically, economically, and security-wise, but they have

been consistent in one area. They have been our good friends.

South Korea and the United States have served to maintain stability in the Korean peninsula, and thereby throughout the Asian

mainland.

As Senator Murkowski stated, South Korea ranks fifth in the

world as a market for U.S. exports, eighth as a source of imports

from the United States, and one of our best trading partners. They

have a free, capitalistic economy which we helped to establish, and

therefore we can be proud of what they have accomplished. I am

certain the government and the people of South Korea are watching these proceedings with much interest. Some feel that their integrity, their credibility, and their dignity are on the line.

On our recent trip to Korea, many of them told me that they

have noted that Japan was one of the first eight countries to receive visa waiver status. They also note that several European

countries also received visa waiver status, including Germany, a

former World War II enemy. So, understandably, they are asking

themselves, how long do we have to wait?

I believe it serves our best interest to grant this special recognition of South Korea, and I so most respectfully urge this committee

to give favorable consideration to S. 290 because, like Senator Murkowski, I believe that the time has come for us to tell our friends

that we trust them and we value their friendship.

Mr. Chairman, once again, I thank you for the opportunity to ap-

£ear before you. May I ask that the statement of my Congressman,

feil Abercrombie, be made part of the record?

Senator ABRAHAM. It will be made part of the record.

Senator INOUYE. Thank you very much, sir.

Senator ABRAHAM. Thank you, Senator, for your leadership on

this.

[The prepared statements of Senator Inouye and Representative

Abercrombie follow:]

PREPARED STATEMENT OF SENATOR DAN INOUYE

Washington, D.C.•Thank you for the opportunity to appear before your committee to discuss matters relating to the Visa Waiver Pilot Program (VWPP) which will

expire on September 19, 1997. I strongly support the reauthorization of the Visa

Waiver Pilot Program. Should the Program be allowed to expire, prospective travelers who do not need United States visas will be required to obtain one. American

Embassies in visa-waiver countries are no longer staffed or equipped to handle this

workload. Delays due to visa processing will result in canceled travel plans and loss

of significant tourism-related revenue in the United States.

The Visa Waiver Pilot Program has played a significant role in Hawaii's tourism

and economy. I have always Supported a permanent extension of the Visa Waiver
44

Pilot Program. However, the committee continues to provide extensions only on a

yearly basis. Accordingly, I urge the Committee to consider a multi-year extension

lor planning purposes should a permanent extension not be feasible at this point

in tune.

I am certain our friends and colleagues before you today will most adequately relate to the committee the economic advantages and business importance of S. 290,

a Visa Waiver Pilot Program for Korean nationals. I am certain they will discuss

with you most convincingly those provisions that have been included in the proposed

Program that would appropriately address the shortcomings suggested by the Administration. Additional restrictions were placed to help deter the possibility of illegal immigration, including a short-term pilot program of three-years; a short-term

stay of no more than 15 days; a bonding requirement; and the authority to cancel

the Program, if necessary.

However, I wish to spend the time allotted to speak of the proposed Program from

a different vantage point. With the demolition of the Berlin Wall and the demise

of the Soviet Union, we heralded the end of the Cold War. As such, most Americans

do contend and believe that the dangers that once existed during the Cold War period are no longer a part of the American lifestyle.

I am certain that we all realize that at the 38th Parallel of the Korean Peninsula

there are still massive military forces on both sides. The general belief is that twothirds of the North Korean forces are near or on the border. North Korea has

923,000 officers and men in the Army, with 10,000 artillery pieces aimed at the City

of Seoul. In addition, North Korea has 85,000 men and women in the Air Force and

46,000 in the Navy. This military force is second only to the People's Republic of

China in the Asian continent.

The South Korean government from the beginning of its establishment after

World War II has gone through much turbulence politically, economically, and security wise, but have been consistent in one area•they have been our good friends.

South Korea and the United States have served to maintain stability in the Korean

Peninsula and thereby throughout the Asian mainland.

South Korea ranks fifth in the world as a market for United States exports,

eighth as a source of imports for the United States, and seventh overall as a United

States trade partner. They have a free capitalistic economy which we helped to establish and therefore we can be proud of what they have accomplished.

I am certain the government and the people of South Korea are watching these

proceedings with much interest. Some feel that their integrity, credibility, and dignity are on the line. They have noted that Japan was one of the first eight countries

to receive visa waiver status. They also note that several European countries also

received visa waiver status including Germany, a former World War II enemy. So

understandably, they are asking themselves, "how long do we have to wait?"

I believe it serves our best interest to grant special recognition of South Korea.

I urge this committee to give favorable consideration to S. 290. I believe time has

come to tell our friends that we trust them and value their friendship.

PREPARED STATEMENT OF CONGRESSMAN NEIL ABERCROMBIE, A U.S.

REPRESENTATIVE FROM THE STATE OF HAWAII

Mr. Chairman and members of the Subcommittee, I appreciate the opportunity to

present testimony in regard to the visa waiver pilot program. Specifically, I would

like to focus my comments on South Korea and the Visa Waiver Pilot Program

(VWPP).

In 1995, South Korean visitors entering the United States spent nearly $2 billion.

This meant economic growth and jobs for Americans particularly those in states

most visited by South Korean tourists. At the top of Korean visitor destinations in

the United States is California, visited by 56 percent of Korean visitors, followed

by New York at 21 percent and Hawaii at 18 percent.

Travel and tourism is an area where the United States has a favorable balance

of trade with the rest of the world. We must continue to foster and encourage this

industry.

For these reasons I cannot accept the State Department's position which continues to restrict Korean travelers by not allowing Republic of Korea to participate in

the VWPP. While the VWPP has proven to be successful in the past, it is time to

reexamine the standards used to determine which nations are designated VWPP.

For example, while the designation of countries such as Liechtenstein and San

Marino as VWPP participants facilitate administrative procedures, such action does

nothing to substantially boost the U.S. travel and tourism industry. Since 1987, the

United States has seen a steady growth in Korean visitors but with our cumbersome
45

visa process we are needlessly sacrificing our market share to countries like Australia and Canada which have found it possible to accommodate an expanding Korean visitor base without compromising their immigration and security interests.

The argument against tourist visa waivers revolves around overstays under current policies. My contention is tourism resulting from a VWPP would result in a decrease in this phenomenon, particularly with the increase in package tours which

would follow implementation of a VWPP. Even stiff visa standards will not prevent

individuals determined to overstay from doing so. The average tourist in a VWPP

has no such intention. To deprive our economy of the obvious benefits associated

with increased tourism runs counter to our interests.

No where is this more evident than in Hawaii. Unfortunately, Hawaii's economy

is not experiencing the same recovery as the rest of the nation. Maybe more than

any other state, our economy is dependent on tourism. You must allow us to open

our doors to new markets and new visitors. Our economy will benefit by welcoming

Korean visitors.

This is the primary reason that I have introduced legislation, H.R. 627, on this

issue. H.R. 627 is a companion measure to legislation, S. 290, introduced in the

United States Senate by Senator Frank Murkowski from Alaska. It is a good faith

effort to acknowledge and be responsive to concerns on this issue.

Major provisions of the bill include:

• The Secretary of State and the Attorney General shall establish a pilot program

within six months of the date enactment.

• The program period will last for three years upon establishment.

• The program is only open to Koreans seeking admission to the United States

as a visitor for pleasure, as part of a group tour.

• The period of stay by visitors to the United States shall not last more than 15

days.

• Visitors must have a round-trip ticket.

• The alien has been determined not to represent a threat to the welfare, health,

safety, or security of the United States.

Under the pilot project small Korean tour groups could bring Korean visitors to

the United States without visas subject to the following restrictions:

• Tour operators must post a $200,000 bond with the Secretary of State.

• Tour operators must meet the standards set by the Secretary of State.

• Tour operators must provide personal information on each prospective tour

group member to the Secretary of State for the purposes of security screening.

• Tour operators must provide certification which documents the return of each

Korean visitor.

Failure to meet the specified requirements will result in financial penalties for the

individual Korean tour operator.

The Secretary of State may terminate tour agent participation in the program

based on periodic reviews on the over stay rate.

The Attorney General and Secretary of State may terminate the program one year

after the establishment of the program dependent on overstay rates.

I want H.R. 627 to build upon the Travel Agent Referral Program (TARP). Just

like TARP, H.R. 627 is limited to tourist visas. As you know, TARP was put into

place at the discretion of our post in Seoul. Under TARP, Korean travel agents designated the U.S. Embassy in Seoul must obtain specific information and are given

specific guidelines which they must follow to submit visa applications on behalf of

their clients. The applications are still reviewed by consular officers, but the front

end work in the application process is all done by Korean travel agents. Already,

35 percent of the visa applications processed are initiated through TARP.

During the last couple of years our embassy in Seoul has worked out a system

whereby Korean travel agents participating in TARP can enter the data electronically. While the State Department cannot give me exact figures, it is my understanding that the approval rate for applications initiated under the TARP is very

near to 100 percent. TARP gives us the infrastructure to make H.R. 627 work.

Under H.R. 627 Korean travel agents have a vested interest in sticking to the

rules. H.R. 627 contains strict criteria. H.R. 627 does not shift enforcement or responsibility to foreign agents. H.R. 627 does not compromise the security interests

of the United States. H.R. 627 provides adequate time for federal officials to check

prospective visitors against law enforcement data bases.

The United States needs to move forward on this issue. We cannot stand still

while the rest of the world takes the initiative on the travel and tourism.
46

Senator ABRAHAM. We have been joined by Congressman Jay

Kim from California, and we appreciate your being here and we

will turn to you now for your testimony, Congressman.

STATEMENT OF HON. JAY KIM

Representative KIM. Well, thank you, Chairman Abraham and

members of the committee. I would like to thank you again for inviting me today to testify this afternoon on behalf of providing a

visa exemption for Koreans visiting the United States similar to

that enjoyed by 27 other nations.

Like our colleagues from Hawaii and Alaska, I am here today to

endorse the business visa inclusion of South Korea in the Visa

Waiver Pilot Program. As Senator Murkowski explained, this current legislation only grants an exemption for Koreans who come in

large, prearranged tour groups. I appreciate the concept. Tourism

is very important to Alaska and Hawaii, and even California, for

that matter. However, I believe that business travel is equally important.

Korea is a rapidly growing economic power. As you know, Korean

businesses are looking to invest their money worldwide, including

in the United States. Business deals often require last-minute arrangements and visits. It is not feasible for the businessman to

travel to the United States as part of a group tour. Likewise, it is

not feasible for businessmen and women to have to wait up to

months to get their visa applications approved. By then, the deal

is going to be lost.

Therefore, I believe that the business visa inclusion of Korea in

this Visa Waiver Program is the best solution. We should provide

Korea with the same exemptions we provide to the other 27 nations

in the Visa Waiver Program•an exemption for all short-term visits, travel and business.

This is an American issue just as much as it is a Korean one.

United States businesses desperately want Korea to become a

member of the Visa Waiver Program. This is the American Chamber of Commerce in Korea's No. 1 issue. They are the ones who initiated this whole issue. In fact, I was in Korea 2 weeks ago and

the first question U.S. businessmen that I met with asked is,

"when are we going to have this Korea visa waiver program?"

I have met with many U.S. business people who feel that they

have lost golden opportunities to enter into business relationships

and attract investment to the United States from Korea because

the Koreans don't want to have to deal with this hassle. I understand that they want to send Korean scientists to the United

States for an urgent assignment and couldn't do it because it takes

months to get a visa. Instead, the Koreans are turning to Canada

and Australia, both countries that have either removed or relaxed

visa restrictions to Korean business people.

I want to skip a few of them here.

I understand the concern is this may increase some illegal immigration situation. That is not true. Look at the other countries,

such as New Zealand, Canada, Mexico, Australia that have removed all the visa restrictions. They are not complaining about the

misuse of the Visa Waiver Program by Korean business people.
47

Again, I want to revise and extend my remarks and submit this

for the official record.

You can ask Canada or New Zealand and they have reported•

I have got a copy in my office•that there is no dramatic increase

since they waived their visa requirements for Korean business people whatsoever.

I would like to thank you again for inviting me today, and I do

have some more, a couple of pages, but

Senator ABRAHAM. We appreciate it, and we will include your full

statement, as you edited it or would like it submitted, in the

record.

[The prepared statement of Representative Kim follows:]

PREPARED STATEMENT OF HON. JAY KIM

Chairman Abraham and Members of the Committee, thank you for inviting me

to testify this afternoon on behalf of providing a visa exemption for Koreans visiting

the United States, similar to that enjoyed by 27 other countries. I appreciate the

opportunity and look forward to a healthy exchange of ideas with you ail.

Unlike our colleagues from Alaska and Hawaii, I am here today to endorse the

full inclusion of South Korea in the Visa Waiver Pilot Program. As Senator Murkowski explained, his current legislation only grants an exemption for Koreans who

come in large, pre-arranged tour groups. I appreciate the concept: tourism is very

important to Alaska and Hawaii. Even to California, for that matter.

However, I believe that business travel is equally important, if not more so. Korea

is a rapidly growing economic power, and Korean businesses are looking to invest

their money worldwide, including in the United States. Business deals often require

last minute arrangements and visits. It is not feasible for a businessman to travel

to the U.S. as part of a group tour. Likewise, it is not feasible for businessmen to

have to wait up to a month to get their visa application approved. By then, the deal

is lost.

Therefore, I believe that the full inclusion of Korea in the VWPP is the best solution. We should provide Korea with the same exemption we provide to the other 27

countries in the VWPP: an exemption for all short term visitors: travel and business.

This is an American issue just as much as it is a Korean one. U.S. businesses

desperately want Korea to become a member of the VWPP. This is the American

Chamber of Commerce in Korea's number one issue. In fact, I was just in Korea

two weeks ago, and the first question the U.S. businessmen that I met with asked

was, "When are we going to give Korea the visa exemption"?

I have met with many U.S. businesses who feel that they have lost golden opportunities to enter into business relationships and attract investment to the U.S. from

Korean companies because the Koreans don't want to have to deal with our visa

hassle. Instead, these Koreans are turning to Canada and Australia, both countries

that have either removed or relaxed visa restrictions on Koreans.

Korea, an OECD member, is a major U.S. trade partner, currently cur sixth largest. Last year, U.S.-Korea bilateral trade amounted to $54.4 billion•greater than

our trade with 23 of the 27 VWPP countries. In 1995 the U.S. held a $6 billion trade

surplus with Seoul. That surplus is expected to grow to be nearly $10 billion by the

end of this year. If we expect to continue to have this strong trade relationship with

Seoul, I believe we must cultivate a more business-friendly environment.

Including Korea in the VWPP will also have a tremendous direct effect on our

local economies. Studies show that each Korean visitor spends an average of just

over $2,000 during a visit to the U.S., not including airfare. Last year 700,000 Korean visitors spent nearly $1 billion in the U.S. This is money spent in each of our

communities: dollars to local hotels, restaurants and other businesses. We can expect this economic impact to dramatically increase if Korea were allowed into the

Regardless of what we do, Koreans will still take vacations and make business

deals. Thus, if we do not relax our visa requirement for Korea, Korean money is

going to stop flowing into our communities and will move to more friendly countries

like Canada, Mexico, Australia or New Zealand•all countries that have visa agreements with Korea. We lose.

Some have raised the concern that including Korea in the VWPP would lead to

a dramatic increase in illegal immigration from Korea. This argument overlooks the
48

fact that Korea currently has the world's 11th largest economy and has growth and

wage rates among the highest in Asia. The fact is, recent trends indicate that more

Koreans and Korean-Americans than ever are returning to Korea in order to take

advantage of the economic boom there. By the way, neither Canada nor New Zealand has reported a dramatic increase since they waived their visa requirements for

Koreans.

Mr. Chairman, the Visa Waiver Pilot Program is a good program, and it serves

the United States well by easing visa requirements for people in countries with

which we have had close ties and whom we can trust not to abuse the system. I

support the reauthorization of the VWPP, and simply ask that we update the program to reflect new changes and include one of our most important strategic, business and cultural allies: South Korea.

Thank you Mr. Chairman, and I welcome the opportunity to answer the committee's questions.

Senator ABRAHAM. I believe a vote may have just started, so we

will have Governor Allen testify. And I don't know, Governor

Hirono, if you can be patient with us while we run to vote, after

his testimony, I would appreciate it. I will at least pledge to come

right back, and we won't hold the other members, necessarily, to

that standard.

Governor Allen, thank you for being here and we welcome you

now in your new capacity. I know you have testified here both as

a member as well as a Governor before, but thanks for being with

us today.

STATEMENT OF HON. GEORGE ALLEN

Governor ALLEN. Thank you, Mr. Chairman, and I appreciate the

opportunity to speak on behalf of the reauthorization of the Visa

Waiver Pilot Program and voice my support for including the Republic of Korea in the VWPP. It is a pleasure for me to join such

a distinguished panel as Senator Murkowski, Senator Inouye, Congressman Kim, and Lieutenant Governor Hirono.

I am wearing a tie from the Governor of Kyongju in Korea. We

have a sister state relationship with Governor Li and the people of

Kyongju Do and Virginia.

The Visa Waiver Pilot Program has been a valuable asset as far

as travel, tourism, and business opportunities in the Commonwealth of Virginia and across the Nation, and I am speaking as the

Governor of Virginia as well as chairman of the Southern Governors in giving you the States' perspective of this issue.

Obviously, the Visa Waiver Program plays a large role in ensuring that the United States, each and every one of our States, and

our country as a whole remain competitive with other international

travel and business markets. In fact, roughly 50 percent of the visitors who come to the United States each year travel under the Visa

Waiver Program. In 1993 alone, this program•the fact that it is

in place•this program saved the taxpayers an estimated $175 million in visa processing costs, which is good for the taxpayers and

to help balance the budget as well.

We can improve, I think, the visa waiver process by including the

Republic of Korea. They are a military, economic, and diplomatic

ally. Others have testified as to how strong they are and growing

as a nation. We also, I might add, have a trade surplus of $3.9 billion with the Republic of Korea. They are a valued trading partner

for the Commonwealth of Virginia as well. They rank fourth among

our export destinations, nearly $1 billion of exports in 1995.
49

They are also very generous. We have a MacArthur Memorial,

and the biggest contributors to the MacArthur Memorial in Norfolk, VA, are companies and individuals from the Republic of

Korea, who very much appreciate what General MacArthur and the

troops did in the Korean War.

Unfortunately, the current visa requirements dictate that many

potential visitors from South Korea have to face delays and obstacles. This is especially significant considering that the largest

group of travelers visiting the United States from Korea are here

on business. I went to Korea in 1996, in the spring of 1996, on a

trade mission to Korea. Business leaders there brought this visa

issue to my attention as one of their highest and most pressing

concerns. They looked at it as an impediment to business. They

looked at it as an impediment of building relationships between the

people of Korea and the United States.

I listened to them and then when I got back home, I acted on

it and I asked the Southern Governors' Association to pass a resolution extending the Visa Waiver Program to our friends from

Korea. On September 10, 1996, the Southern Governors' Association unanimously approved extending the Visa Waiver Program to

our friends from South Korea.

Then, a few months later, in December 1996, the Western Governors' Association adopted a similar resolution in relation to extension, of course, of the Visa Waiver Pilot Program and including

South Korea. Just last month, on June 4, 1997, the National Governors' Association [NGA] finally also passed such a resolution. I

would like to enter the letter from the NGA to you and Senator

Kennedy.

Senator ABRAHAM. We will include it in the record.

Governor ALLEN. Thank you.

Now, the reality is that the Embassy in Seoul processes more

nonimmigrant visa applications than any other consulate in the

world, over 550,000, and they are estimated to have to go through

750,000 in the upcoming year. The result is•and you hear it from

so many people, and we heard it from the Senators•that folks

have to wait sometimes up to 2 days, queued up in a line around

the Embassy, just to get their visa. Now, that is hardly conducive

to building relationships and making it easier for people to be in

contact, whether for travel, tourism, or for business.

There are many occasions where business deals have been lost

because of this situation, and clearly it must be improved. Other

nations are exploiting our competitive disadvantage. We are in a

war of competition with other nations. We have to do everything

we can to make sure what we are doing here in the United States

is helping us. Forty-eight countries provide visa waivers to South

Korea and there is significant evidence to indicate that the U.S. is

losing Korean visitors to other countries with friendlier visa programs, whether that is business or tourism. In today's internationally competitive marketplace, we cannot afford to have this disadvantage in our race to attract new jobs, new investment, and

more tourism dollars. The Chamber of Commerce of Korea, of

course, has endorsed this as well.

There are 27 countries that are participating in the Visa Waiver

Program. Yet, South Korea is our only large trading partner not to
50

be included. South Korea reciprocates. They allow our folks to come

in there on business trips, up to 15 days. They extend important

visa waivers to business efforts, and the readability, and so forth.

All of that is already in place.

As far as these two bills, I think that S. 290 is a good one, in

that it has a 3-year pilot. Congressman Kim's is a good bill, also,

in that it doesn't apply just to tourism, also to business, but it only

lasts 1 year. I would encourage you to take the best of both. I think

the 3-year provision and the tourism•put it in and make sure that

business is included, as well, and I think you would have a fine

bill. What you would be doing is making sure that we get more

jobs, more tourism, and more economic vitality for us in the United

States, as well as building our relations with our allies and good

friends from the Republic of Korea.

Senator ABRAHAM. Governor Allen, thank you very much.

[The prepared statement of Governor Allen and the letter referred to follow:]

PREPARED STATEMENT OF HON. GEORGE ALLEN

Thank you, Senator Abraham. I appreciate the opportunity to speak on behalf of

the reautnorization of the Visa Waiver Pilot Program (VWPP), and to voice my support for including the Republic of Korea in the VWPP. It is certainly a pleasure to

join this distinguished panel.

The Visa Waiver Pilot Program has been a valuable asset in promoting travel,

tourism, and business opportunities in Virginia and across the nation. It plays a

large role in ensuring that the United States remains competitive with other travel

and business markets abroad.

In fact, roughly 50 percent of the visitors who come to the U.S. each year travel

under the VWPP. In 1993 alone, this program saved taxpayers an estimated $175

million on visa processing costs. Renewing the VWPP certainly makes good sense

as we try to balance the federal budget.

One way we can improve the VWPP is by including South Korea:

• The Republic of Korea is an important military, diplomatic, and economic ally.

• South Korea is the eleventh largest economy in the world•and predicted to be

among the top seven by 2010.

• It is the United States' fifth largest export market ($26.5 billion in '96) and the

seventh largest overall trading partner (more than $50 billion in '96).

• In 1996, the U.S. posted a trade surplus of $3.9 billion with South Korea.

The Republic of Korea is certainly a valued trading partner with the Commonwealth of Virginia as well. It ranks fourth among Virginia's export destinations•

with $971 million in exports in 1995.

Unfortunately, the current visa requirements dictate that many potential visitors

from South Korea face numerous delays and obstacles. This is especially significant

considering the largest group of travelers visiting the U.S. from Korea are here on

business.

During my 1996 trade mission to Korea, business leaders there brought the visa

issue to my attention as one of their specific concerns. As a result, I submitted a

resolution to the Southern Governors' Association (SGA)•cosponsored by Governor

Mel Carnahan of Missouri•supporting the extension of the VWPP to include the

Republic of Korea.

The SGA unanimously endorsed this measure, and our position was subsequently

adopted by the Western Governors' Association (WGA) and the National Governors'

Association (NGA). Mr. Chairman, I would like to submit a copy of the SGA, WGA,

and NGA resolutions for the record.

The U.S. Embassy in Seoul processes more non-immigrant visa applications than

any other consulate in the world•over 550,000 last year alone. They expect to process more than 750,000 this year.

As a result, many South Koreans must stand in line for up to two days in order

to obtain a visa for travel in the U.S. According to the American Chamber of Commerce in Korea, there are many instances where U.S. companies lost business deals

because their Korean partner could not secure a U.S. visa fast enough.
51

Other nations are exploiting our cumbersome visa requirements. Forty-eight countries already provide visa waivers to South Korea, and there is significant evidence

to indicate that the U.S. is losing Korean visitors to other countries with friendlier

visa programs.

In today's increasingly competitive international marketplace, we cannot afford to

be at a disadvantage in the race to attract new jobs, investments and tourism dollars. For this reason, the American Chamber of Commerce in Korea has joined with

other business organizations in support of expanding visa waiver status to South

Korea.

Korea has made remarkable progress in working towards the requirements laid

out for inclusion in the VWPP. For example, they nave decreased their visa refusal

rate from 6.3 percent to 2.8 percent in only one year, and already have reciprocal

treatment for our citizens and electronically readable passports.

Currently, there are twenty-seven countries participating in the VWPP. In fact,

South Korea is our only large trading partner not included. At the same time, South

Korea does grant visa waivers to our citizens for tourism or business trips lasting

up to fifteen days. Extending the VWPP to Korea will help ensure that Americans

continue to receive these important visa waivers•and that business ties between

our countries will grow stronger in the days ahead.

Including South Korea in the Visa Waiver Pilot Program will produce positive economic results for our citizens and our taxpayers. I join the other members of this

panel in urging the Committee to reauthorize the VWPP and extend those same

benefits to our friends and allies in South Korea.

Thank you very much.

SOUTHERN GOVERNORS' ASSOCIATION

RESOLUTION REGARDING NON-IMMIGRANT VISAS FOR SOUTH KOREANS

Sponsored by Governor George Allen of Virginia and Governor Mel Carnahan ofMissouri, Approved September 10, 1996, Southern Governors' Association's 62nd Annual Meeting, Kansas City, Missouri

Whereas, The Republic of Korea•better known as South Korea•is the sixth largest trading partner of the United States;

Whereas, In 1995, total U.S. exports to the Republic of Korea totaled nearly $30

billion;

Whereas, U.S. businesses have a cumulative direct investment of more than $3

billion in the Republic of Korea;

Whereas, The United States continues to have a special and strong relationship

with the Republic of Korea;

Whereas, The nations of the Pacific Rim, including the Republic of Korea, are important trading partners for southern States;

Whereas, The Southern Governors' Association recognizes the importance of trade

in supporting economic development in the region;

Whereas, Travel between the Republic of Korea and the southern States, whether

for business or vacation, is critical to strengthening this trade;

Whereas, The largest group of South Koreans visiting the United States are business travelers;

Whereas, some 3,000 Republic of Korea residents apply for non-immigrant U.S.

visas daily;

Whereas, South Koreans must often stand in line at the U.S. Embassy in Seoul

for up to two days in order to obtain a visa for travel to the United States;

Whereas, The Visa Waiver Pilot Program is designed under U.S. law to provide

citizens of foreign countries•primarily business executives and tourists•the ability

to travel to the U.S. for short stays without visas;

Whereas, The Republic of Korea is one of our only large trading partners that is

not allowed to participate in the Visa Waiver Pilot Program;

Whereas, Exceptions to the Visa Waiver Pilot Program have been legislated by

Congress in the past; and

Whereas, Extending this pilot program to South Korean citizens would help business executives traveling from the Republic of Korea to southern States and: assist

economic development in the region; now, therefore, be it

Resolved, That the Southern Governors' Association recognizes the importance of

the Pacific Rim countries in the world economy and the need to encourage companies from these countries to trade and invest with the States in the South;

Resolved, That the Southern Governors' Association supports making it easier for

business executives and tourists from the Republic of Korea to visit the southern
52

States by supporting the Republic of Korea's inclusion in the Visa Waiver Pilot Program through regulatory or legislative means; and

Ordered, That this resolution shall be dispatched to the President of the United

States, Vice President of the United States, the U.S. Department of State, and appropriate Members of Congress and congressional committees, including the southern delegation.

WESTERN GOVERNORS' ASSOCIATION

RESOLUTION 96-023

December 20, 1996

Sponsors: Governors Cayetano and Knowles

Subject: Visa Waiver Program for South Korea

A. Background

1. The Republic of Korea (South Korea) is a strategic military ally of the United

States and it allows the stationing of 38,000 U.S. troops on its soil. South Korea

is also the world's eleventh largest economy. 1995 bilateral trade between South

Korea and the United States totaled $54.5 billion. In 1995, South Korea was the

fifth largest export market for the United States. These military and economic ties

are complemented by historic cultural ties between the people of South Korea and

the people of the United States.

2. In 1995, travel and tourism was the largest service export of the United States

in that it generated $78 billion in expenditures from 45 million international visitors. As a result of its healthy economy, South Korea's outbound travel market is

surging and it is estimated that 8.5 million South Koreans will travel abroad in

2004. The federal visa waiver pilot program has been a boom to international travel

by providing citizens of 24 countries with the ability to travel to the United States

for short stays without visas.

3. The visa waiver program does not presently extend to South Korea. South Koreans are therefore required to obtain a visa to enter the United States. The U.S.

Embassy in Seoul issued more non-immigrant visas (400,000) in 1995 than any U.S.

embassy in die world. During peak travel seasons, the U.S. Embassy in Seoul processes 3,500 to 4,500 non-immigrant visa applications each day, and an average of

1,500 non-immigrant visa applications per work day at non-peak times.

4. Visas are intended to prevent illegal immigration into the United States. However, the South Korean economy is rapidly expanding and citizens have little incentive to immigrate to the United States illegally. Moreover, South Koreans often

faced significant delays and adverse conditions in applying for visas and this

hinders their travel to western states. For South Korea and the United States, the

visa barrier is not an immigration issue, but rather an economic issue that acts to

restrict economic development in the West and limit western exports to South

Korea.

B. Governors'policy statement

1. The Western Governors' Association (WGA) urges the U.S. Congress to enact

legislation that would allow South Korean citizens to travel to the United States

under a visa waiver program. In doing so, the WGA recognizes the special relationship between the United States and South Korea. The WGA also recognizes the

growing importance of travel and tourism to the United States economy. Travel and

tourism play a significant role in expanding western U.S. exports of goods and services and in increasing foreign investment in the region.

2. The WGA believes that incorporation of programs such as the Travel Agent Referral Program could assist in achieving acceptable levels for key criteria necessary

to participate in a visa waiver program. In 1995, over 35 percent of the visa applications were received through the Travel Agent Referral Program. This program permits South Koreans 25 years of age and older to apply for visas through their travel

agents. Participants of this program have a 1 percent refusal rate as their travel

agents provide an initial screening.

C. Governors' management directive

1. The WGA shall convey this resolution to the President and Vice-President of

the United States, the Secretary of State, the Secretary of Commerce, to the Chairman and Ranking Member of the Senate Commerce, Science and Transportation

Committee, the Senate Foreign Relations Committee, the Senate Judiciary Committee, the House Commerce Committee, the House International Relations Committee,
53

and the House Judiciary Committee, as well as the Western Congressional Delegation.

NATIONAL GOVERNORS' ASSOCIATION,

Washington, DC, June 19, 1997.

Hon. SPENCER ABRAHAM,

Chair, Immigration Subcommittee,

Judiciary Committee, U.S. Senate,

Washington, DC.

Hon. EDWARD M. KENNEDY,

Ranking Democratic Member, Immigration Subcommittee,

Judiciary Committee, U.S. Senate,

Washington, DC.

DEAR CHAIRMAN ABRAHAM AND SENATOR KENNEDY: On behalf of the National

Governors' Association (NGA), we commend you for holding a hearing on the status

of the Visa Waiver Pilot Program (VWPP) and the extension of visa waivers to the

Republic of Korea (South Korea). Based on recently adopted NGA policy, the Governors urge you to establish a permanent visa waiver program in the United States

and extend visa waiver status to South Korea.

Travel and tourism is a critical industry for states, and the Governors consistently

have promoted actions to help ease the obstacles to U.S. travel for foreign

businesspeople and tourists. Currently, twenty-five countries, including Australia,

France, Germany, and the United Kingdom, participate in the highly successful

VWPP. Without congressional action, this program will expire October 1, 1997. Expiration of VWPP would create a backlog of visa applications that would be impossible to manage efficiently under the U.S. State Department's current staff and

budget restrictions.

In line with the objective of streamlining U.S. travel for foreigners, the Governors

endorse the extension of visa waivers to South Korea•the world's eleventh largest

economy and our country's seventh largest trading partner. Despite a significant increase in foreign travel by South Korean citizens for both business and leisure purposes, the rate of their travel to the United States has risen only marginally. States

have seen indications that the complicated U.S. visa application procedure means

fewer Korean tourists, who are more likely to visit competing countries with "friendlier" entry requirements.

The Governors look forward to working with you to establish a permanent visa

waiver program and extend visa waivers to South Korea as soon as possible. Thank

you for your consideration of our positions on these issues. A copy of NGA policy

and of a brief background paper are attached. Please include our letter and attachments in the hearing record.

Sincerely,

GOVERNOR PAUL E. PATTON,

Chair, Committee on Economic Development and Commerce.

GOVERNOR EDWARD T. SCHAFER,

Vice Chair, Committee on Economic

Development and Commerce.

NATIONAL GOVERNORS' ASSOCIATION•NGA POLICY

EDC-12. ESTABLISHING A PERMANENT VISA WAIVER PROGRAM AND EXTENDING VISA

WAIVERS TO THE REPUBLIC OF KOREA(SOUTH KOREA)

12.1 Preamble

A key objective of tourism-related efforts by the United States must be to keep

delays at ports of entry from becoming a deterrent to ongoing and increased international travel to our country. Federal agencies should aggressively cut red tape

and ease obstacles to travel in the United States in areas such as visas, passports,

currency exchange requirements, and customs congestion. The Governors endorse

the expansion of efforts in these areas, consistent with security and drug enforcement considerations. The federal government should work with states and private

industry to facilitate the travel of tourists whose language and cultural differences

are barriers to safe or enjoyable travel. The Governors recommend that the federal

government utilize technology, where affordable and practical, to speed the entry of

frequent international business travelers through points of entry.
54

12.2 Permanent Visa Waiver Program

In order to facilitate expansion of the tourism industry, the Governors urge Congress to enact a permanent visa waiver program. The Visa Waiver Pilot Program

(VWPP), limited to three years when first implemented in 1988, has been reauthorized several times. Twenty-five countries currently participate in the program, and

states have benefited economically from the program's success. Last year, Congress

extended the VWPP for only one year. It will expire on October I, 1997, unless Congress takes timely action.

12.3 Visa Waivers for the Republic of Korea

The Governors support the inclusion of the Republic of Korea (South Korea) in

the visa waiver program. Rising incomes have allowed Koreans to spend more

money on travel, with the United States becoming an increasingly popular destination. However, the complicated visa application procedure in the United States

means fewer Korean tourists, who are more likely to visit competing countries with

"friendlier" entry requirements. Currently, South Korea is experiencing a "reverse

immigration'' trend, meaning South Korean immigrants living in the United States

are returning to South Korea. More importantly, the visa refusal rate has dropped

from 6.3 percent in fiscal 1995 to 2.87 percent in fiscal 1996. The Governors believe

that extending visa waivers to South Korea will produce substantial economic benefits to the United States.

Interim Policy approved by the NGA Committee on Economic Development and

Commerce, June 4, 1997.

BACKGROUND ON THE VISA WAIVER PROGRAM

The purpose of this paper is to provide background on the issue of establishing

a permanent visa waiver program and on the issue of extending visa waivers to the

Republic of Korea (South Korea).

Visa Waiver Pilot Program (VWPP)

The VWPP allows international travelers, tourists, and business people to enter

the United States for a limited period of time without a visa. Citizens from countries

that do not qualify for the program must apply for a visa in order to enter the United States for any period of time. U.S. Embassy officials process these visa applications for numerous tourists, business travelers, and students who wish to travel to

the United States. Currently, the following twenty-five countries participate in the

VWPP: Andorra, Argentina, Australia, Austria, Belgium, Brunei, Denmark, Finland,

France, Germany, Iceland, Ireland, Italy, Japan, Liechtenstein, Luxembourg,

Monaco, the Netherlands, New Zealand, Norway, San Marino, Spain, Sweden, Switzerland, and the United Kingdom.

Roughly fifty percent of the foreign visitors to the United States travel here under

the VWPP. In 1993 alone, forty-four million foreign visitors came to the United

States, and the VWPP saved U.S. taxpayers an estimated $175 million on visa processing costs. The VWPP was first implemented in 1988 and has been renewed since

that time by Congress for limited intervals. It is now scheduled to expire unless

Congress acts to renew it.

In order to qualify for the VWPP, a country must meet the following four requirements:

• The average visa refusal rate (for tourism and temporary visas not student

visas) must be less than 2.0 percent for two consecutive years and in neither

of those two years may the refusal rate be above 2.5 percent;

• The country must provide reciprocal treatment for U.S. citizens;

• The country must have developed or be in the process of developing an electronically readable passport; and

• The U.S. attorney general, in consultation with the U.S. Department of State,

must conclude that extending visa waivers to the county will not compromise

U.S. law enforcement.

The U.S. Department of Justice administers the VWPP, in consultation with the

U.S. Department of State, and it is considered to be an important component of

states' economic development programs. The flexibility permitted to individual visitors under the VWPP helps the tourism industry and facilitates foreign direct investment, both of which help to create new jobs and supply additional revenue to

the states. NGA policy currently supports the establishment of a permanent visa

waiver program, consistent with security and drug enforcement considerations
55

Visa Waivers for South Korea

The Republic of Korea (South Korea), with a population of more than 46 million

people, is the world's eleventh largest economy and the seventh largest trading partner of the United States. In 1996, South Korea was the United States' fifth largest

merchandise export market, at $26.6 billion.

Despite concerns raised by officials at the U.S. Department of State regarding

South Korea's current failure to meet the technical requirements of the program,

both the Western Governors Association (WGA) and the Southern Governors' Association (SGA) have adopted policy urging Congress to extend visa waivers to South

Korea. South Korea's visa refusal rate has dropped from 6.3 percent in fiscal 1995

to 2.87 percent in fiscal 1996. With respect to the other required elements of the

program, South Korea currently provides visa waivers to U.S. citizens for tourism

or business trips of up to fifteen days and has an electronically readable passport.

At this time, no information is available from the U.S. Department of Justice on

the issue of security concerns related to the extension of visa waivers to South

Korea.

Forty-eight other countries, including Canada, France, Germany, and Great Britain, already provide visa waivers to South Korea. Many states have expressed concern that the United States is losing South Korean visitors to the countries with

friendlier visa programs toward South Korea. According to available figures, 3.4 million South Koreans traveled abroad in 1994, an increase of almost five times from

the rate of individuals traveling abroad in 1988. However, travel by South Koreans

to the United States has increased by only about two and a half times the rate during the same time period.

Status ofLegislative Action

Legislation to extend visa waivers to South Korea has been introduced in both

houses. Senator Frank H. Murkowski (R-AK), Senator Daniel K. Inouye (D-HI),

and Representative Neil Abercrombie (D-lst HI) have sponsored S. 290 and H.R.

627, companion bills titled "A Bill to Establish a Visa Waiver Pilot Program for Nationals of Korea Who are Traveling in Tour Groups to the United States." Representative Jay Kim (R-41st CA) has sponsored H.R. 203, "A Bill to Designate the

Republic of Korea as a Visa Waiver Pilot Program Country for One Year Under the

Immigration and Nationality Act." The Senate Judiciary Committee Subcommittee

on Immigration is expected to hold hearings on S. 290 in June.

Senator ABRAHAM. We have got about 3 minutes to go for our

vote, so we are going to temporarily recess the hearing and we will

reconvene as soon as we get back.

[Recess.]

Senator ABRAHAM. We will now reconvene our hearing, with apparently fewer members able to be with us at this point, which is

the way it often goes with a vote. But I have been assured by the

remaining panelists that they are prepared to answer questions

and ready to go.

But before we turn to any questions, we still have to hear from

Lieutenant Governor Hirono from the State of Hawaii. We welcome

you here and appreciate very much your participating today.

STATEMENT OF HON. MAZIE K. HIRONO

Ms. HIRONO. Thank you very much. As we say in Hawaii, aloha.

Mahalo for this opportunity to testify and present Governor Ben

Cayetano's testimony. I will be skipping around, and so I would

like to ask that his full statement be entered into the committee's

record.

Senator ABRAHAM. It will be entered into the record.

Ms. HIRONO. Thank you.

As far as the current Visa Waiver Pilot Program, there is no

question that Hawaii would like to have this reauthorized and for

as long a period of time as possible. The importance of this program has been noted by the other testifiers, but I wanted to note

it international travel and tourism contributes receipts of almost
56

$90 billion annually to the U.S. economy, and this is an increase

of over $50 billion since 1988, when the current Visa Waiver Pilot

Program was initiated.

Last year, it is estimated that the travel trade provided a positive balance of payments of over $15 billion. Since the inception of

the Visa Waiver Program, our international trade balance has been

positive each and every year. It was negative in both of the 2 years

prior to the program's implementation.

Visitor arrivals from the lucrative, high-spending overseas markets have shown extremely strong growth. Visitor arrivals from

Japan, for example, increased by 21 percent, or 540,000 visitors to

the United States in the first year alone. For Hawaii, visitor arrivals from Japan increased by almost 25 percent, or 250,000 new

visitors in just the first year of the current program. Right now,

there are almost 2 million visitors from Japan that come to Hawaii

every year, so it has grown tremendously.

This program has obviously had a significant impact on Hawaii's

economy. It has also impacted our entire Nation, as spending by

overseas arrivals to Hawaii now accounts for over 20 percent of the

total national travel trade balance. In this regard, Governor

Cayetano has worked very closely with Governor Knowles of Alaska, Chair of the Western Governors' Association, to cosponsor a

resolution from that organization supporting the visa waiver extension to Korea.

As also noted by previous speakers, the National Governors' Association will be meeting next week, and their Economic Development and Commerce Committee recently voted to add this language to the NGA interim tourism policy. We are expecting that

the National Governors' Conference next week will adopt a resolution in support of having South Korea be accepted as a visa-waived

country.

There is overwhelming evidence to support this action. As noted,

South Korea's economy is robust and it is one of the world's fastest

growing. Not only is the economy vibrant, but South Korea also has

a strong trade relationship with the United States. In 1996, South

Korea ranked seventh among the top 10 trading partners of the

United States, and our exports to this country are greater than our

exports to 22 other countries that are included in the existing Visa

Waiver Program.

Governor Allen's testimony noted the importance of Virginia

trade with South Korea. As other examples, South Korea ranks

third among Hawaii's export destinations, with almost $25 million

in exports in 1995. The State of California's exports to South Korea

rank South Korea as their third biggest export destination. California exports over $6 billion to South Korea every year. For Michigan, it is the 11th largest export destination, with over $367 million exported in 1995. In Iowa, it is their fifth largest export destination, with over $87 million worth of exports being sent to South

Korea.

The Republic of Korea has increased its outbound travel by over

700 percent in the last decade, to 4.6 million tourists in 1996. The

United States gets approximately 800,000 of these visitors. It is expected that by the year 2004, the number of Korean outbound trav-
57

elers is projected to double, to 8.5 million outbound visitors annually.

We estimate that if South Korea were added to the Visa Waiver

Pilot Program, the United States would see an incremental growth

in visitors from South Korea of approximately 20 percent, and this

could mean an additional 200,000 visitors to the United States in

1998, or a 1-percent increase in the total overseas travel count to

the United States alone. This translates to new spending of over

$400 million and could easily lead to the creation of 10,000 new

jobs nationwide.

According to the U.S. Embassy in Seoul, the United States is the

first destination of choice for South Koreans, with the top five destination States being California, Nevada, Hawaii, New York, and

Arizona. Currently, California gets about 40 percent of all visitors

to the United States from South Korea.

I would like to close by focusing on one aspect of the Korean visa

waiver issue which Governor Cayetano particularly wanted me to

emphasize, and that is the negative impact that this issue may

have on our relationship with the Republic of Korea. There is a

long history of friendship between the United States and the Republic of Korea. The sacrifice of more than 54,000 Americans lost

during the Korean War and the 37,000 American troops stationed

today in Korea are examples of the strong bond between our two

countries.

Korea is one of our strongest allies in the Pacific and, of course,

trust is an integral part of that relationship. The current visa regulations do little to promote greater trust between the United States

and Korea. We respectfully ask that Congress take this into account in its deliberation of the Korean visa waiver question.

I recently returned from Korea last week, in fact, and I had the

pleasure of seeing Congressman Kim there. There was no question

that all of the people that I met with, from the President of South

Korea, whom both the Governor and I had met in 1995, who was

on his way to address the United Nations, the mayor of Seoul, the

vice mayor of Pusan, two of the largest cities in South Korea, large

business people, and certainly the Korean businesses who are involved in travel and tourism there, noted that the single biggest

issue of concern to them is their acceptance as a visa-waived country.

Thank you very much for allowing me this opportunity to testify.

[The prepared statement of Governor Cayetano, as presented by

Ms. Hirono, follows:]

PREPARED STATEMENT OF HON. BENJAMIN J. CAYETANO, GOVERNOR, STATE OF

HAWAII

Chairman Abraham, and Members of the Senate Judiciary Immigration Subcommittee, we appreciate your responsiveness to proposals that will stimulate international visitor traffic to the United States while simultaneously cutting government costs. The Visa Waiver Pilot Program (VWPP) is a proven stimulant to overseas arrivals, saves American taxpayers hundreds of millions of dollars annually

and should be reauthorized. In addition, we ask that you adopt proposed legislation

to expand the program to include the Republic of Korea.

International travel and tourism contributes receipts of almost $90 billion annually to the United States economy. This is an increase of over $50 billion since 1988

when the visa waiver program was initiated.

While it is difficult to attribute all of this increase to this program, clearly it has

had a positive impact. Last year, over 67 percent of all overseas visitors to the U.S.
58

used this program. This means that of the 22 million overseas visitors in 1996, 15

million came from participating countries.

This has also impacted positively on our nation's balance of payments. Last year,

it is estimated that the travel trade provided a positive balance of payments of over

$15 billion. Further, it is important to note that since the inception of the VWPP,

our international travel trade balance has been positive each and every year. It was

negative in both of the two years prior to its implementation.

More specifically, visitor arrivals from the lucrative high-spending overseas markets have shown extremely strong growth. For example, visitor arrivals from Japan

increased by 21 percent or 540,000 visitors in the first year alone. For Hawaii, visitor arrivals from Japan increased by almost 25 percent or 250,000 new visitors in

the first year. This program has had significant impact on Hawaii's economy in

terms of visitor spending. It has also impacted our entire nation as spending by

overseas arrivals to Hawaii now accounts for over 20 percent of the total national

travel trade balance.

Because the visa waiver is a proven stimulant to international tourism, the State

of Hawaii supports efforts to expand the program to the Republic of Korea. The

strong growth of the economy and standard of living for Korea make that country

a particularly attractive candidate for a visa waiver.

In this regard, I have worked very closely with Governor Tony Knowles of Alaska,

Chairman of the Western Governors' Association (WGA), to co-sponsor a WGA resolution supporting expansion of the visa waiver program to Korea. This resolution

was recently adopted by the WGA. Governor Knowles regrets that he cannot be here

today to testify.

In addition, Governor Knowles and I supported the National Governors' Association (NGA) resolution in favor of visa waiver reauthorization and extension of this

program to Korea. The NGA Economic Development and Commerce Committee recently voted to add this language to the NGA Interim Tourism Policy.

There is overwhelming evidence to support this action. For example, South Korea's economy is robust and is one the world's fastest growing. Economic growth has

been between 5 percent to 12 percent for each of the past 10 years. In 1996, its estimated Gross National Product (GNP) was $520 billion, an increase of 7 percent over

1995. It is forecast to grow an additional 5 percent to 6 percent this year. Last year,

South Korea became a member of the Organization for Economic Cooperation and

Development (OECD), making it a full-fledged industrial country partner. Strong

growth is expected to continue for several decades and by 2020, their economy is

forecast to be the 7th largest economy in the world at $4 trillion.

Not only is the economy vibrant, but South Korea also has a strong trade relationship with the United States. In 1996, South Korea ranked 7th among the top 10

trading partners of the U.S., and our exports to this country are greater than our

exports to 22 other countries that are included in the existing visa waiver program.

Due to this robust economy, outbound travel from the Republic of Korea has increased by over 700 percent in the last decade to 4.6 million in 1996. Further, it

is expected to grow substantially in the next few years and by 2004, the number

of Korean outbound travelers is projected to double to 8.5 million outbound visitors

annually.

However, a slow visa issuance process that discourages prospective tourists currently constricts Korean tourism to the U.S. Koreans are responding by spending

their money in other markets.

Examples from three other destinations that recently instituted visa waiver programs for Koreans show the positive impact that resulted from waiving the visa requirement for Korean travelers. Guam eliminated their visa requirement in 1990

and saw a 240 percent increase in Korean visitor arrivals in the first 12 months.

Between 1990 and 1995, they have seen a 2,400 percent increase in Korean visitors!

Consequently, their market share of Korean outbound travelers has increased from

1 percent to 14 percent.

New Zealand eliminated their visa requirement in 1993 and saw an increase of

129 percent in Korean travelers in the first year and a further 97 percent increase

in the second year. It should be noted that Korean travelers have the highest average daily spending of all visitors to New Zealand at US$238 per day.

As a third example, Canada eliminated their visa requirement in 1994 and experienced a 96 percent increase in Korean visitors in the first 12 months. Between 1993

and 1995, Korean visitor arrivals have increased by 180 percent.

We estimate that if South Korea were added to the Visa Waiver Pilot Program,

the United States would see an incremental growth of 20 percent. This means an

additional 200,000 visitors to the U.S. in 1998 or a 1 percent increase in the total

overseas traveler count to the U.S. alone. These additional visitors will bring in new
spending of $400 million, and could easily lead to the creation of 10,000 new jobs

nationwide.

According to the U.S. Embassy in Seoul, the United States is the first destination

of choice for South Koreans. In 1995, this embassy issued more non-immigrant visas

than any other consulate in the world. A total of 409,000 applications were processed, or roughly 1,500 applications per work day. During peak travel periods, this

translates to between 3,500 to 4,500 non-immigrant visa applications processed

daily. This is a tremendous amount of paperwork, as well as a time-consuming effort. Elimination of the visa requirement for Korean travelers would free up some

of these resources for other tasks.

Critics believe that eliminating the visa requirement for Koreans will lead to increased illegal immigration by Korean nationals. In reality, this is not likely as Korea's economy is surging and Koreans have no real incentive to leave home. Life in

Korea, while hard, offers tremendous opportunities to do well. Numerous data support this position:

(1) The government of Canada and New Zealand, which recently reduced the visa

barrier for Koreans, do not consider the number of Koreans overstaying their visits

to be a significant problem.

(2) The number of Korean immigrants to the U.S. dropped from 32,400 in 1987

to 16,047 in fiscal year 1995.

(3) More Koreans give up their "green cards" and return to Korea than do residents from any other country.

(4) According to the U.S. State Department data, from 1984 to 1994, no Korean

visa applicant was denied a visa due to association with terrorist organizations.

During this time, only 1 to 2 persons per year were denied visas due to past criminal convictions, although in some years no one was denied for this reason.

(5) Law enforcement officials support visa waivers because the waiver form requires applicants to forfeit their right to fight deportation. Thus, any person on a

visa waiver can be immediately expelled from the U.S. when found in violation of

our laws or regulations.

Finally, there is one other aspect to the Korean visa waiver issue which I want

to raise: the negative impact this issue may have on our relationship with the Republic of Korea.

There is a long history of friendship between the United States and the Republic

of Korea. The sacrifice of the more than 54,000 Americans lost during the Korean

War and the 37,000 American troops stationed today in Korea are examples of the

strong bond which ties both countries together.

The Republic of Korea is one of our strongest allies in the Pacific. Trust is an integral part of that relationship. The current visa regulations do little to promote

greater trust between the United States and Korea. I respectfully ask that Congress

take this into account in its deliberation over the Korean Visa Waiver question.

Senator ABRAHAM. I thank the entire panel. I regret that because

of a variety of reasons, we had to change around the time of this

hearing. It obviously wasn't as convenient for the other members

as we would like it to be. I hope we will see some of them.

Let me just ask any member that is here, who would choose or

care to respond, about some of the concerns that I suspect we

would hear about expanding the program, the Visa Waiver Program. I really have not formulated an opinion on this issue prior

to today. I wanted to hear the testimony. Let me raise some of the

concerns that we would undoubtedly confront.

For example, it is estimated, based on Governor Hirono's testimony, that there might be as many as 200,000 additional visitors

that would be coming to the United States if we moved in the direction of the Senate bill. If there is a 3-percent rate of, say,

overstaying, or something in that range, which I think maybe•I

don't know how that actually would work out, but you are talking

about several thousand potential individuals who might stay over

the visa, consequently falling into categories of illegal aliens.

Is there some reason to think that the safeguards could work to

reduce that number, because I think that is the first level of con-
60

cern that is going to be raised. How do these safeguards that are

proposed in the legislation work? What others might we consider?

Senator MURKOWSKI. Why don't I start out and then my colleagues can fill in? What we have tried to do here is to address specifically the concerns relative to the question you brought up, Mr.

Chairman, and we have a bonding requirement. Bond would be forfeited. The Korean tour operators have to stand behind that bond.

The bond would be the assurance, if you will, that there be a goodfaith effort.

Now, that doesn't exclude the possibility of somebody simply

overstaying, but the responsibility that the tour agency has for not

returning the various tourists that are included in that particular

tour would result in either the bond being called or the tour operator no longer being able to operate under the system. There are a

couple of other safeguards in there. As I indicated, there is a requirement for a round-trip ticket being acquired 2 weeks in advance. These are safeguards that are unique to this 3-year pilot

program, unlike a broad visa waiver that doesn't have those.

Now, the question of collecting penalties from tour operators•a

tour operator would put it in writing their intent to forfeit cash

bond for failure to comply with the law, and the U.S. Embassy will

be physically holding the cash as insurance for adherence to the

law. So I think what we have attempted to do is to instill checks

and balances as much as possible, and we would certainly be willing personally to entertain other concerns that might be expressed

where you see loopholes that should be covered.

But for the most part, I think that we have a program that provides the checks and balances, that provides an incentive for the

tour operators to ensure that they not deal with unscrupulous individuals who want to come into the country. I guess the thing that

concerns me the most, Mr. Chairman, is the State Department and

Immigration set a criteria based on one major factor, and that is

unemployment. South Korea has the lowest. They enjoy a broad

waiver, and here we are just trying to get our foot in the door with

a pilot program that I think deserves merit. If it doesn't work, it

will be evident, and if the checks and balances aren't in, it will be

evident, and that is the advantage of a pilot program.

Excuse me for taking so long.

Senator ABRAHAM. NO. That is fine.

Ms. HIRONO. Can I also respond?

Senator ABRAHAM. Sure, Governor Hirono.

Ms. HIRONO. There are over 12 million people who visit the United States as tourists or for business under the current Visa Waiver

Pilot Program, and I think that we should look to that as an indication of what might happen if other countries are accepted into

the program.

The question of overstays, I think, is one that is really important.

However, INS has testified that they are unable right now to give

us very accurate information as to exactly what the overstay problem is and the depth of that problem. However, their testimony

that you will hear later today indicates that the number of persons

applying for admission under the Visa Waiver Pilot Program and

who are refused entry grew to 7,000 or so refusals in 1996. On the

other hand, though, we have got 12 to 14 million people coming in.
61

Their testimony also indicates that statistics relating to the apprehension and removal of nationals of visa waiver countries, as

shown in a chart that they are presenting to you, indicate that

these countries remain low risk for immigration law violations. So

I think that that kind of experience, coupled with the safeguards

that are in the bill before you, would indicate that this would not

be a major problem. Certainly, we can mitigate that, but on the

other hand there are tremendous economic benefits.

Senator ABRAHAM. Congressman Kim.

Representative KIM. Thank you, Mr. Chairman. The basic difference between my bill and the Senate bill is the time duration.

My bill simply states that the pilot program will be extended up

to 1 year. During that period of time, the Attorney General can

cancel this program any time if any abusiveness exists.

Now, INS will be doing an overstay report study next year anyway, and they will be heavily looking at the Korean visa-holders

overstay issue. So you will get the report perhaps in 6 months. One

year is safer, in my opinion, than 3 years. What could happen in

1 year, or even 6 months? So we are going to be monitoring it closely and any abuse of this program, as I mentioned earlier, simply

eliminates this program, or at the end of 1 year they will just simply cancel, not extend any further. So I think 1 year is very appropriate, in my opinion, and must include business because business

people do not stay.

According to reports that I have read, report after report, business people do not stay here. Almost all of them go back, and I believe it is a mistake only including group tours. I believe we should

include business visas as well, and I also have a problem with posting a $200,000 bond guaranteeing those group tour returns. I

talked to a few people. They felt that•one of them said, "We are

not a bunch of criminals. Why would you post bond?" That is why

I would rather have a 1-year program and watch it carefully, and

if things don't improve, then we can cancel it.

Senator ABRAHAM. One of the other questions that has been

raised more, I guess, about the Senate bill is the question of delegation, if you would, of the responsibilities here with respect to admitting people to the United States to folks who run tour group operations, and so on.

How do you address that concern, Governor Hirono?

Ms. HIRONO. Even the people who come in through the existing

Visa Waiver Program are screened, certainly, when they enter our

country. We look at their passports, et cetera, so that kind of

screening process. And as we have stronger capabilities to make

sure that undesirables and other people of that ilk are not coming

in, I think that that will certainly apply to any new countries that

are added to the program. I think that is one response.

Senator MURKOWSKI. I think if I can add to that

Senator ABRAHAM. Sure, Senator.

Senator MURKOWSKI (continuing). I would certainly agree with

you, but I think what we have done here is we have added, if you

will, an additional layer of protection because as the Lieutenant

Governor pointed out, those tourists will still be required to have

their applications reviewed. Customs officials will require valid

passports at the port of entry, but the additional consideration and
62

safeguard is that that is placed on the tour operators to screen

carefully each applicant. Otherwise, they will lose the benefits of

the business; they potentially will lose their bond.

I think what I would envision the legislation intended to specifically do is to give the South Korean people the respect that they

deserve. They are a close ally. We have referred to them time and

time again as the economic miracle. They are an important trading

partner and I think the South Koreans deserve a chance, and that

is what this is all about.

I wonder if you would excuse me?

Senator ABRAHAM. Senator, thanks for being with us today.

Senator MURKOWSKI. I appreciate it very much.

Representative KIM. Senator, if you would yield just 1 minute, I

do agree with Senator Murkowski. I appreciate what he is doing

and his concept, but this whole idea was initiated 2 years ago

about the American Chamber of Commerce in Korea. The original

concept was to waive visas to business people. Somehow, down the

line, it has been changed. Again, I reemphasize the whole idea was

initiated by business people. The Visa Waiver Program must be

targeted to business visas. It happens to include tourism, but, to

me, the business visa is the most important.

Senator ABRAHAM. I have additional questions with respect to

the Senate bill, and I don't mean to in any way diminish either the

business issue or your legislation. Obviously, we are primarily here

looking at the Senate version.

Since Senator Murkowski has left, I guess I will ask Governor

Hirono again. One of the other concerns that has been raised is the

logistics issues. The State Department isn't exactly set up to deal

with bonding programs- and, you know, holding bonds and administering this kind of activity. How would you respond to the concerns that have been raised along those lines, the administrative

costs, and so on?

Ms. HIRONO. I think some of the specific provisions of the bill before you will need to be worked out and those kinds of issues need

to be addressed. Clearly, the bonding issue is one that raises concerns among the Korean travel agents that I met with. Just as

Congressman Kim has pointed out, we may need to address the

limitations in some other way or to assure that the visitors who

come under this kind of a program will return. The bond was considered one way to do that, but we are certainly not wedded to it.

We are open to discussing other methods.

Senator ABRAHAM. Well, I think the concern is not that this is

inappropriate. The goal, I think, is admirable of trying to add additional safeguards. The question is whether the State Department•

we will have somebody here, I think, in the next panel who might

want to address that from a different perspective, from the State

Department's perspective. But some of the criticisms that have

been raised were along those lines and I wondered if there was any

specific response from the advocates of the legislation to that. I was

interested in just hearing whether there was anything along those

lines in response.

Ms. HIRONO. I have some information from Senator Inouye on

that, and he says that under the bill the State Department will decide if a bond should be forfeited. The Korean tour operators will
63

give to the Embassy a cash bond for collateral, and I think that if

the mechanisms can be worked out, it may not be an onerous burden for them to just call in the bond.

Senator ABRAHAM. I gathered from Senator Murkowski's perspective a flexibility and willingness to try to come up with a possible

solution here. I gather that other advocates are likewise willing to

try to work together as we move ahead on this, and I appreciate

that.

Before I ask the second panel to start, I know Senator Kennedy

is here. I don't know if he wants to have any questions for this

panel or not. I think the answer is he is not able to be with us immediately, so we will thank you two for being here.

Representative KIM. Mr. Chairman, if you can yield me just 1

minute again, please?

Senator ABRAHAM. Sure.

Representative KIM. I appreciate it. As Senator Murkowski said,

we are trying to send a message to Korea, which is a strong ally.

That is fine, but in reality all we are doing is really insignificant,

meaningless. The way it is right now does waive a visa anyway

when you have a group tour. You can contact the American Embassy office in Seoul. If it is a group tour, they waive visa, and

whoever is sponsoring or putting this program together, they all

don't get in with a visa, they all don't guarantee their return. It

doesn't do anything in terms of group tours unless you expand the

businesses. That is the way it is now.

Senator ABRAHAM. Congressman Kim, thank you for being with

us. Governor Hirono, we appreciate it, and we will dismiss this

panel and ask our second panel members to come forward.

On this panel, we will hear from Mary Ryan, who is the Assistant Secretary for Consular Affairs at the Department of State; Michael Cronin, who is the Assistant Commissioner for Inspections at

the INS; and Janet Thomas from the Air Transport Association. I

thank this panel for being here.

We are laughing because every time we have done a hearing, we

have had an order of speaking and the plan was to have the seating to correspond, and every single time we have done it the panels

ended up sitting exactly the opposite of the way we were going to

do it. But that is the way it goes, I guess.

Anyhow, I will turn initially to Mary Ryan, who is our Assistant

Secretary for Consular Affairs at the Department of State. We appreciate your being here today to comment on either the broader

issue of reauthorizing the waiver program or, if you would also

like, the specific issues related to the bills that we have in the

House and Senate on South Korea. Thanks for being here.
64

PANEL CONSISTING OF MART A. RYAN, ASSISTANT SECRETARY FOR CONSULAR AFFAIRS, BUREAU OF CONSULAR

AFFAIRS, DEPARTMENT OF STATE, WASHINGTON, DC; MICHAEL D. CRONIN, ASSISTANT COMMISSIONER FOR INSPECTIONS, IMMIGRATION AND NATURALIZATION SERVICE,

WASHINGTON, DC; AND JANET THOMAS, DIRECTOR OF FACELITATION, Am TRANSPORT ASSOCIATION OF AMERICA,

WASHINGTON, DC

STATEMENT OF MARY A. RYAN

Ms. RYAN. Thank you, Mr. Chairman. Mr. Chairman and members of the committee, I am really delighted to have been invited

today to testify on behalf of the Department of State about the nonimmigrant Visa Waiver Pilot Program.

I can say without reservation that this program has been a resounding success. It has bolstered the U.S. economy through the

expedited admission of millions of legitimate short-term visitors for

business, thus allowing for the negotiation of contracts for the provision of American goods and services to the world.

It has also provided a welcome boost to the U.S. tourism industry, which employs thousands of American citizens, through the

visa-free admission of millions of foreign tourists. In addition, it

has enabled the U.S. Government to use its limited resources more

efficiently and productively during a period of budgetary constraint. We support permanent reauthorization of this highly successful program.

During the 1980's, economic prosperity in Europe and Japan contributed to an explosion in international travel. The State Department found itself in the position of devoting increasing resources

. to visa issuance which was virtually perfunctory. Let there be no

mistake. A British national applying for a visa to visit the United

States in 1987 was not required to go to the Embassy, let alone to

have a visa interview. Yet, even this perfunctory processing

consumed major personnel resources, owing to the sheer volume of

visa issuance.

The Visa Waiver Pilot Program was a logical response to that situation. Its objective was to determine if a selective waiver of the

nonimmigrant visa requirement would improve the use of U.S.

Government resources and encourage travel to the United States

without diminishing U.S. border security. It went into effect in July

1988 initially in 8 countries and has now expanded to encompass

25 countries.

Strict criteria for participation were established to ensure the

test program would not entail unacceptable risks to our ability to

control our borders. Furthermore, before any country is designated

as a participant, the Attorney General must determine that U.S.

law enforcement interests would not be compromised by its designation. A number of countries have met some criteria, but have

not been accepted for the program because of law enforcement or

security reasons.

The criteria laid out in the legislation have worked astoundingly

well. The established requirements have ensured that only lowfraud, low-risk countries have been designated as participants.

Strict adherence to the criteria has enabled representatives of the
65

Department of State overseas to respond honestly and

straightforwardly to requests from numerous friendly countries

who don't meet the criteria. More significantly, they have ensured

that nations have received equitable treatment in line with the historical principles of the United States.

We strongly support continued adherence to these criteria which

have maintained the integrity of the program over the years. Any

proposal to dilute the qualifying criteria must be carefully evaluated for consistency with the program's stated aims and U.S. border security interests.

Safeguards have been included in the program to deter the admission of ineligible aliens. The mere fact that a country participates in the Visa Waiver Program does not mean that all of its citizens will be admitted to the United States upon application or that

if admitted under the waiver program, they will be granted all the

privileges they would enjoy if they were admitted with visas. All

individuals applying for admission, including those in the Visa

Waiver Program, are subject to the same look-out checks at the

port of entry that they would be subjected to at the time of visa

issuance overseas.

The Department of State and the Immigration and Naturalization Service [INS] share data to ensure that all information on ineligible aliens is available to both agencies. I am convinced that application of the criteria for admission outlined in the legislation,

plus our enhanced data-share programs, offer U.S. agencies appropriate control over those seeking admission without visas.

Based on the information that we have available, issuing visas

to all of the travelers who entered under the Visa Waiver Program

would have been a considerable drain on our resources, without

any discernible benefit to our national security. I would argue, in

fact, that rather than weakening border security, the Visa Waiver

Program has, in fact, strengthened it. It has allowed the Department of State to focus its resources upon those countries and regions where fraud potential is the greatest.

The resource savings were applied to the opening of posts and

staffing of consular sections in the former Soviet Union. In addition, the Department has been able to move personnel into straight

anti-fraud work and into adjudicatory positions in immigrationpush countries.

So what would the resource implications for the Department of

State be if the Visa Waiver Program were ended? It is almost impossible to calculate and daunting to contemplate. We have eliminated positions in visa waiver countries, and we have even closed

many consulates. The cost of reestablishing those posts and positions would be significant. Since the program began, the demand

for nonimmigrant visas in nonvisa waiver countries has grown considerably. The resources that were reprogrammed to those countries are essential to provide adequate service and to maintain

anti-fraud initiatives.

While the Government has benefited enormously from the Visa

Waiver Program, it has really been the U.S. economy that has won

the gold ring. The World Tourism Organization statistics for 1996

showed that the United States was the second most popular international tourist destination, with 44.8 million arrivals, but number
66

one as far as tourism receipts go. International tourists, many of

them on the Visa Waiver Program, spent $64.4 billion in this country in 1996, and if you add in the money that they spent on travel

on U.S. carriers, it becomes $88.9 billion.

So, in closing, I would like to stress once again the value of the

Visa Waiver Program to U.S. Government operations, to the U.S.

travel and tourism industry, and to our relations with the participating countries. Even a short disruption of this vital program

would have disastrous economic, political, and resource implications for the U.S. Government. We support the permanent reauthorization of the Visa Waiver Program and we will work with the

Department ofJustice to that end.

Thank you, Mr. Chairman, and I would be pleased to take any

questions.

Senator ABRAHAM. Thank you very much.

[The prepared statement of Ms. Ryan follows:]

PREPARED STATEMENT OF MARY A. RYAN

Mr. Chairman and Members of the Committee: I am delighted to have been invited today to testify on behalf of the Department of State about the nonimmigrant

visa waiver program. I can say without reservation that this program is a resounding success. It has bolstered the U.S. economy through the expedited admission of

millions of legitimate short term visitors for business, thus allowing for the negotiation of contracts for the provision of American goods and services to the world. It

has provided a welcome boost to the U.S. tourism industry, which employs thousands of American citizens, through the visa-free admission of millions of foreign

tourists. In addition, it has enabled the U.S. government to use its limited resources

more efficiently and productively during a period of budgetary constraint. We support permanent reauthorization for this highly effective program.

During the 1980's, economic prosperity in Europe and Japan and the growing

interdependence of the world's economy contributed to an explosion in international

travel. The State Department found itself in the position of devoting increasing resources to visa issuance which was virtually perfunctory. Let there be no mistake

about it•a British national applying for a visa to visit the U.S. in 1987 was not

required to go to the Embassy, let alone have a visa interview. Yet, even this perfunctory processing consumed major personnel resources owing to the sheer volume

of visa issuance.

The visa waiver pilot program was a logical response to that situation. It was instituted pursuant to the Immigration Reform and Control Act of 1986. Its objective

was to determine if a selective waiver of the nonimmigrant visa requirement would

improve the use of U.S. government resources and encourage travel to the United

States, without diminishing U.S. border security. The program waives the visa requirement only for touristic or business trips of ninety days or less in duration. Others, such as students and temporary workers, from qualifying countries all still need

visas to travel to the US. It went into effect on July 1, 1988, in eight countries

jointly designated by the Secretary of State and the Attorney General. Under joint

administration of the Secretary of State and the Attorney General the program has

now expanded to encompass 25 countries which have met the statutory criteria.

The program simultaneously helped U.S. business, generated growth in the U.S.

tourist industry and allowed the State Department to redirect its consular resources

to higher risk situations like the newly independent states in the former Soviet

Union. The visa waiver program was not just a win/win situation, it was a win for

business, a win for tourism and a win for effective management of the Department

of State.

Strict criteria for participation were established to ensure that the test program

would not entail unacceptable risks to our ability to control our borders. To qualify

for the program, nations must:

• Have a minimal nonimmigrant visa refusal rate;

• Issue or agree to issue a machine readable travel document;

• Reciprocate the visa waiver by permitting visa-free entry to Americans for business or tourism.
67

Furthermore, before any country is designated as a participant, the Attorney General must determine that U.S. law enforcement interests would not be compromised

by the designation. Formal and informal consultations take place within the border

security community before a country is nominated. A number of countries have the

requisite refusal rates and machine readable documents but have not been accepted

for the program because of law enforcement or security concerns.

The criteria laid out in the legislation have worked astoundingly well. The established requirements have ensured that only low-fraud, low-risk countries, such as

Germany, the United Kingdom, Japan, France and Norway, have been designated

as participants. Strict adherence to the criteria has enabled representatives of the

Department of State overseas to respond honestly and straightforwardly to requests

from numerous friendly nations to be part of the program by noting their current

inability to meet the criteria. Most significantly, the criteria nave ensured that nations have received equitable treatment in line with the historical principles of the

United States. We strongly support continued adherence to these criteria which

have maintained the integrity of the program over the years. Any proposal to dilute

the qualifying criteria must be carefully evaluated to see if it is consistent with the

program's stated aims and U.S. border security interests.

Safeguards have been included in the program to deter the admission of ineligible

aliens. The mere fact that a country participates in the visa waiver program does

not mean that all of its citizens will be admitted to the United States upon application or that, if admitted under the waiver program, they will be granted all the

privileges they would enjoy if they were admitted with visas. They first must not

be inadmissible under the Immigration and Nationality Act. In addition, they may

not seek review of any removal of admission under the visa waiver program or contest removal under the visa waiver program, other than on the basis of an application for asylum. They must have a round-trip ticket so that they can depart immediately if found excludable. All individuals applying for admission, including those

in the visa waiver program, are subject to the same look-out checks at the port of

entry that they would be subjected to at the time of visa issuance overseas.

The Department of State and the INS share data to ensure that all information

on ineligible aliens is available to both agencies. I am convinced that application of

the criteria for admission outlined in the legislation plus our enhanced data share

programs offer U.S. agencies appropriate control over those seeking admission without visas. Based on the information we have available, issuing visas to all of the

travelers who entered under the visa waiver would have been a considerable drain

on resources without any discernible benefit to our national security.

Some would argue that this program weakens U.S. border security, I would advance the counter argument. The visa waiver program was not and is not a "loser"

for U.S. border security. Indeed, rather than weakening border security, the visa

waiver program has strengthened it, because it has allowed the Department of State

to focus its resources upon those countries and regions where fraud potential is

greatest. The resource savings were applied to the opening of posts ana staffing of

consular sections in the former Soviet Union and to administering legislatively-mandated immigrant visa lottery programs. In addition, the Department has been able

to move personnel previously engaged in relatively pro forma nonimmigrant visa adjudication into straight anti-fraud work or to adjudicatory positions in immigrationpush countries.

So what would be the resource implications for the Department of State ifthe visa

waiver program were ended? It is almost impossible to calculate and daunting to

contemplate. We have eliminated positions in visa waiver countries and even closed

many consulates, especially in Western Europe, which used to provide perfunctory

visa services. The cost of reestablishing these posts and positions would be significant. Since 1988 when the visa waiver program began, the demand for nonimmigrant visas in non-visa waiver countries has grown considerably. The resources

which were reprogrammed to these countries are essential to providing adequate

service and maintaining anti-fraud initiatives.

Estimating what it would cost to the U.S. to restore consular services to all the

nations that currently participate in the visa waiver program is admittedly an inexact science. However, one rough measure would be based on the number of foreigners who entered the U.S. in 1996 using the visa waiver program. Last year some

12.4 million aliens entered the U.S. on the visa waiver program. The current Machine Readable Visa application fee is $20, based on a 1991 cost of service study.

Even if only half the aliens who entered the U.S. last year required a visa (since

some of those visitors probably entered more than once in 1996 and some would be

dissuaded from traveling here by a visa requirement), that would mean that the additional cost to the U.S. would be over $120 million•and that does not even cover

the cost of expanding facilities or hiring and training all of the additional staff the
68

Department would require. Our business and tourism would suffer, the cost to the

U.S. government would be high, and U.S. border security would not be improved.

As I noted earlier, I really don t even like to think about it.

While the government has benefited enormously from the visa waiverprogram,

it has been the U.S. economy that really won the gold ring on this ride. The World

Tourism Organization statistics for 1996 show that the United States was the second most popular international tourist destination with 44.8 million arrivals but

number one as far as tourism receipts go. International tourists spent $64.4 billion

here in 1996. Lots of them entered the U.S. on the visa waiver program.

In closing, I would like to stress once again the value of the visa waiver program

to U.S. government operations, to the U.S. travel and tourism industry and to our

relations with participating countries. Even a short disruption of this vital program

would have disastrous economic, political and resource implications for the U.S. government. We support permanent reauthorization of the visa waiver program and

will work with the Department of Justice to that end.

Thank you for your attention. I will be pleased to take your questions.

Senator ABRAHAM. Mr. Cronin.

STATEMENT OF MICHAEL D. CRONIN

Mr. CRONIN. Thank you very much, Mr. Chairman. Applicants

for admission under the Visa Waiver Program are examined by immigration officers, who are aware that these individuals have not

been screened through a visa process. The officers check the names

of these applicants against the look-out database, and these officers

may open and pursue any appropriate line of inquiry to make a determination concerning the individual's admissibility.

In fiscal year 1996, 76 percent of nonimmigrants from the 25

participating countries entered under this program. This was over

12 million travelers, or just under ¥2 of all documented

nonimmigrants. Prior to the 1996 amendments to the Immigration

Act, the agencies involved in making the necessary determinations

for addition of countries to the program had developed a process for

the inclusion of countries.

The Bureau of Consular Affairs makes the necessary threshold

determinations of eligibility. Before making a recommendation that

a country be included in the program, the Bureau considers any

relevant foreign relations or national security issues. Upon receipt

of the Department of State's recommendation, the Department of

Justice requests information from INS and the FBI concerning immigration, criminal, and national security considerations.

Upon analysis of this information, a recommendation is made to

the Attorney General as to inclusion or rejection of the country.

Under the 1996 amendments, the authority to designate a country

to participate in the program was vested solely in the Attorney

General, in consultation with the Secretary of State.

The number of persons applying for admission under the Visa

Waiver Pilot Program who were refused entry increased significantly in fiscal years 1995 and 1996 by approximately 2,000 persons a year, to 7,011 refusals in 1996. TTiis recent increase appears

attributable in part to the fraudulent use of travel documents from

countries in the program, which I will discuss further. However,

statistics relating to the apprehension and removal of nationals of

visa waiver countries indicate that these countries do indeed remain low-risk for immigration law violations.

The Visa Waiver Pilot Program has grown tremendously and has

proven extremely popular with nationals of visa waiver countries

and with travel and tourism interests. It has significantly reduced
consular workload, but has not markedly degraded facilitation at

U.S. ports of entry. At the same time, port of entry enforcement capabilities have been enhanced by the addition of select data from

the consular look-out and support system to the border inspection

system database.

However, the Visa Waiver Pilot Program is attractive to the prospective illegal entrant in the same way as it is to the legitimate

traveler. Entry into the United States can be achieved with nothing

but a passport and without the necessity of presenting a visa. Consequently, fraudulent document vendors and alien smugglers have

targeted the passports of visa waiver countries.

As the Department of State has increased the fraud resistance of

the United States nonimmigrant visa by including biographical information that bears a digitized photograph, the attractiveness of

using visa waiver passports for nonvisa waiver nationals seeking to

enter the United States illegally has also increased.

The attraction of smugglers to visa waiver nationality passports

is encouraged by several factors, including limited security features

present on some passports and the existence of multiple passport

issuing authorities and procedures in some visa waiver countries.

The use of lost or stolen blank visa waiver country passports presents a serious fraud concern. The INS intelligence program collects information about the universe of fraudulent document activity and distributes detailed reports to the field on incidence of

fraudulent documents.

The Department of Justice has been conducting a review of the

Visa Waiver Pilot Program to assess the risks associated with further expansion of the program, including incremental effects of program expansion on the effectiveness of ports of entry. That review

is being expanded to an interagency working group which will

evaluate the program as a whole, its extension, whether it should

be made permanent, the continued designation of current countries, and criteria to be applied to determinations about the addition of further countries to the program.

The program provides that one qualification for continued participation is that the number of nationals of the member country

who were denied admission at the time of arrival or withdrew their

application for admission and the number of nationals of that country who violated the terms of such admission during the previous

fiscal year remain below 2 percent of the total number of nationals

of that country who applied for admission as nonimmigrant visitors

during that year.

Data are collected in the Non-Immigrant Information System

[NIIS], on the number of withdrawals for visa waiver countries and

can be provided for each year since the beginning of the program.

Similarly, comprehensive data on visa waiver refusals can be provided. Data are available in the nonimmigrant system from 1988

to 1989, and 1991 to 1992 for Visa Waiver Pilot Program countries

whose nationals violated their terms of admission, as measured by

nonimmigrant visa overstay rates.

Nonimmigrant overstay rates have not been estimated since July

1994, when calculation of fiscal year 1993 rates were attempted,

due to inconsistent numbers of apparent overstays in the nonimmigrant system. The numbers of apparent overstays have been
70

reviewed every 6 months through February 1997 in attempts to estimate defensible nonimmigrant overstay rates. However, data

from NIIS continue to be inadequate for this purpose.

From the 1994 realization that corrective action was required,

plans were made to rewrite the NIIS software to improve data integrity, identify new requirements, and convert the old database.

This development began in 1995 and continued until the new system was introduced in July 1996. The new system is now being

analyzed for further corrections. INS recognizes the inability to

provide this information as a serious deficiency. We hope to have

completed and introduced corrective actions to the nonimmigrant

system by early 1998.

As we have stated in the past, INS recommends that legislation

be enacted to require Visa Waiver Pilot Program countries to introduce highly fraud-resistant, machine-readable passports by a date

certain. Current language does not refer to fraud resistance and

some countries have failed to introduce machine-readable documents to date.

This completes my testimony, Mr. Chairman. I would be glad to

respond to any questions. Thank you.

Senator ABRAHAM. Thank you very much.

[The prepared statement of Mr. Cronin follows:]

PREPARED STATEMENT OF MICHAEL D. CRONIN

Mr. Chairman and Members of the Subcommittee, I welcome the opportunity to

testify on the Visa Waiver Pilot Program (VWPP). During the last nine years, this

Program has become a regular part of the inspection and admission process for visitors from 25 countries.

DEVELOPMENT AND EXPANSION OF THE VISA WATVER PILOT PROGRAM

The Visa Waiver Pilot Program was established by the Immigration Reform and

Control Act of 1986. Under its provisions, visitors for pleasure or business from

countries designated jointly by the Attorney General and the Secretary of State, who

meet express statutory criteria, may enter the United States without a visa for a

period of ninety days. They are required to waive in writing any right to the review

of an immigration officer's determination that they are inadmissible or removable

from the United States. They may only contest removal based on an application for

asylum. They are also required, if arriving by air or sea, to travel on a transportation line which is signatory to an agreement with the Immigration and Naturalization Service permitting the line to transport passengers under the Program,

and they are required to be in possession of a round-trip or onward ticket.

The four criteria for inclusion of countries in the program are:

(1) That they offer reciprocal privileges to United States citizens;

(2) That they have had an average nonimmigrant visitor visa refusal rate of under

2 percent for the previous two years and under 2.5 percent for any one of these two

years;

(3) That they certify that they issue or are in the process of developing a machinereadable passport; and

(4) That the Attorney General make a determination that inclusion of the country

in the Program does not pose a law enforcement risk to the United States.

The Act further pre.ides that the Attorney General, in consultation with the Secretary of State, may refrain from including countries in the Program or remove

them for any reason, including national security.

Applicants for admission under the program must complete a Form I-94W, answering questions regarding their admissibility to the United States and executing

the waiver noted above. They are examined by immigration officers who are aware

that these individuals have not been screened .-ough a visa process. The officers

check the names of these applicants against a lookout database. These officers may
71

open and pursue any appropriate line of inquiry to make a determination concerning the individual's admissibility.

From its inception in 1988 through fiscal year 1996, the Program grew from one

to 25 participating countries. In Fiscal Year 1996, seventy-six percent of

nonimmigrants from participating countries entered under this program. This was

over 12 million travelers, or just under one-half of all documented nonimmigrants.

Prior to the statutory modifications made by the Illegal Immigration Reform and

Immigrant Responsibility Act of 1996 (URIRAi, the agencies involved in making the

necessary determinations for addition of countries to the program had developed a

process for the inclusion of countries. The Bureau of Consular Affairs of the Department of State makes the necessary threshold determinations of eligibility, i.e., that

the visa refusal rates are within the statutory criteria; that the country is issuing

or intends to issue a machine readable passport; and that the country extends or

will extend reciprocal privileges to U.S. travelers. Before making a recommendation

that a country be included in the Program, the Bureau of Consular Affairs considers

any other relevant foreign relations or national security issues. Upon receipt of a

recommendation from the Department of State that a country be included in the

Program, the Department of Justice requests information from the Immigration and

Naturalization Service and the Federal Bureau of Investigation concerning immigration, criminal, and national security considerations and data. As necessary, a team

may be dispatched to the country to consult with its law enforcement and criminal

justice organizations and to review such activities as border control and passport issuance procedures. Upon analysis of this information, a recommendation is made to

the Attorney General as to inclusion or rejection of the country. Under IIRIRA, the

authority to designate a country to participate in the Program was vested solely in

the Attorney General, in consultation with the Secretary of State.

The number of persons applying for admission under the Visa Waiver Pilot Program who are refused entry grew, through Fiscal Year 1994, in a manner consistent

with the growth of the Program, from 22 persons in 1988 to 1,876 persons in 1994.

This number increased significantly in Fiscal Years 1995 and 1996, by approximately 2,000 persons a year, to 7,011 refusals in 1996. This recent increase appears

attributable in part to the fraudulent use of travel documents from countries in the

Program, which will be discussed below. However, statistics relating to the apprehension and removal of nationals of Visa Waiver countries, as shown on the attached chart, indicate that these countries remain low-risk for immigration law violations.

THE SUCCESS OF THE VISA WAIVER PILOT PROGRAM

The Visa Waiver Pilot Program has grown tremendously and has proven extremely popular with nationals of visa waiver countries and with travel and tourism

interests. It has significantly reduced consular workload but has not markedly degraded facilitation at United States ports-of-entzy. Port-of-entry enforcement capabilities have been enhanced by the addition of select data from the Consular Lookout and Support System (CLASS) to the Interagency Border Inspection System

(IBIS) database.

FRAUD Dl THE VISA WAIVER PILOT PROGRAM

The Visa Waiver Pilot Program is attractive to the prospective illegal entrant in

the same way it is for the legitimate traveler•entry to the United States can be

achieved with nothing but a passport and without the necessity of visa issuance.

Consequently fraudulent document vendors and alien smugglers have targeted the

passports of Visa Waiver countries. As the Department of State has increased the

fraud resistance of the United States nonimmigrant visa by including biographical

information and the bearer's digitized photograph in the visa, the attractiveness of

using VWPP passports for non-VWPP nationals seeking to enter the United States

illegally has also increased. The attraction of smugglers to VWPP passports is encouraged by several factors, including limited security features present in some

VWPP passports (which simplify the alteration and forgery of them) and the existence of multiple passport-issuing authorities and procedures in some VWPP countries.

The use of lost or stolen blank VWPP passports presents a serious fraud concern.

There is also a large supply of stolen blank VWPP passports on the market today.

INS Intelligence has received reports dealing with the increasing involvement of

international organized crime groups in the theft of these documents and their

vending to smuggling rings or individual aliens.

The INS Intelligence Program collects information about the universe of fraudulent document efforts. It distributes to the field intelligence reports on the variety
72

of documents and schemes in use to move aliens to the U.S. and to attempt to get

through the inspections process. The Forensic Documents Laboratory sends to all

ports of entry "Alerts" whenever a significant new fraudulent document appears.

These Alerts include color photographs of the fraudulently produced or altered documents or the fraudulent visa stamps as well as written description of what features

to look for to determine the fraud. In this manner, fraudulent documents uncovered

by one inspector or by a consular officer or government official overseas become

known to INS inspectors at all ports of entry.

To ensure compliance with the terms of the Program, INS has worked with the

airline industry to develop criteria for the use of electronic ticketing on international

flights to the United States. Under recent direction from INS Headquarters, visa

waiver applicants may use electronic tickets provided that they can, upon demand,

present some proof of onward travel arrangements and provided that, also upon demand, participating transportation lines cooperate with INS requests for verification

of travel arrangements.

ADMINISTRATION REVIEW OF THE VISA WAIVER PILOT PROGRAM

The Department of Justice has been conducting a review of the Visa Waiver Pilot

Program to assess the risks associated with further expansion of the Program, including incremental effects of program expansion on the effectiveness of ports-ofentry. That review is being expanded to an interagency working group which will

evaluate the Program as a whole, its extension, whether it should be made permanent, the continued designation of current countries, and criteria to be applied to

determinations about the addition of further countries to the Program.

NONIMMIGRANT INFORMATION SYSTEM AND VISA OVERSTAY RATES

The Program provides that one qualification for continued participation is that the

number of nationals of a member country who were denied admission at the time

of arrival or withdrew their application for admission, and the number of nationals

of that country who violated the terms of such admission during the previous fiscal

year remain below 2 percent of the total number of nationals of that country who

applied for admission as nonimmigrant visitors during such previous fiscal year.

Data are collected in the Nonimmigrant Information System (NIIS) on the number of withdrawals for VWPP countries, and can be provided for each year since the

beginning of the program (1988). Similarly, comprehensive data on VWPP refusals

can be provided.

Data are available in NIIS from 1988-89 and 1991-92 for VWPP countries whose

nationals violated their terms of admission (as measured by nonimmigrant visa

overstay rates). These data are estimates of overstay rates which are based on "apparent overstay" numbers from NIIS. INS developed a methodology that reduces the

number of apparent overstays by an estimate of the "system error." The system

error (historically about 8-10 percent for all countries) begins with the failure of

many aliens departing the United States to turn in their departure forms to their

earners or as Uiey depart across the land borders. Other sources of system error

are keypunching and processing problems. This methodology was refined as a result

of review by the General Accounting Office in 1995.

Nonimmigrant overstay rates have not been estimated since July 1994 (when calculation of fiscal year 1993 rates were attempted) due to inconsistent numbers of

apparent overstays in NIIS. Because of the magnitude and variation of apparent

overstays since 1992, the INS' established methodology cannot currently be used to

produce overstay rates with the required level of reliability to make relative comparisons among countries. The numbers of apparent overstays have been reviewed

every 6 months through February 1997 in attempts to estimate defensible nonimmigrant overstay rates; however, data from NIIS continue to be inadequate for

this purpose.

From the 1994 realization that corrective action was required, plans were made

to rewrite the NIIS software to improve data integrity, identify new requirements

and convert the old database. This development effort began in 1995 and continued

until the new system was introduced in July 1996. Operation of the new system was

encumbered by the process of converting the old database of admissions, withdrawals, and departures from 1983 through June 1996. Backlogs caused by the necessity

of maintaining dual processing were not eliminated until May 1997.

INS recognizes the inability to provide this information as a serious deficiency.

We hope to have completed and introduced corrective actions to the NIIS by the

early 1998.

INS is presently engaged in extensive efforts related to the provisions of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 which deal with
73

automation, card technology, biometrics, and departure management. This work will

result in significant improvement in INS's ability to track arrivals and departures,

identify overstays, and generate more precise overstay statistics.

RECOMMENDATION

As Congress considers extension of the VWPP, INS has one recommendation. As

we have stated in the past, INS recommends that legislation be enacted to require

Visa Waiver Pilot Program countries to introduce highly fraud-resistant, machinereadable passports by a date certain. Current language does not refer to fraud resistance and some countries have failed to introduce machine-readable documents

to date. It should be noted that the initial eight VWPP countries entered the program before this requirement was introduced by the Immigration Act of 1990.

This completes my testimony. I would be glad to respond to any questions you

may have.
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Senator ABRAHAM. MS. Thomas.

STATEMENT OF JANET THOMAS

Ms. THOMAS. Thank you, Mr. Chairman. I submit written testimony for the record and, with your permission, will summarize

with brief remarks.

Senator ABRAHAM. Fine. We will include your full testimony.

Ms. THOMAS. Thank you.

The Air Transport Association of America [ATA] represents the

major commercial passenger and cargo air carriers in the United

States, and we very much appreciate this opportunity to present to

the subcommittee the views of the U.S. commercial airline industry

regarding the Visa Waiver Pilot Program.

Since its creation, our member airlines have had tremendous success with the program. This program has been unprecedented in

reducing barriers to travel and tourism to and from the United

States. The U.S. airline industry is very pleased to have played a

role in this success.

In the nearly 10 years since the program's implementation, international airline passengers have become accustomed to the program's requirements and use it routinely. The program has served

well the purpose for which it was designed, to facilitate the easy

and efficient flow of low-risk foreign tourists and business travelers.

Simultaneously, the program has afforded Department of State

consular officers more time to focus their efforts on those individuals whose visits to the United States are for other purposes, and

to drastically reduce its consular staff at low-risk locations, resulting in significant cost savings to the U.S. taxpayer.

Yet, all of this pales in comparison to the real benefit of the program, that of expanded foreign travel and tourism to the United

States, an $84 billion a year industry. Simply put, the United

States needs this program to remain competitive with the many

other nations around the globe who are after the same finite travel

dollar.

ATA members strongly support the transition of the program to

a permanent one, with expanded participation. While the pilot has

been extended periodically, the unqualified success of the program

speaks strongly on behalf of its being made permanent.

With regard to S. 290, while we believe the decision on the admission of a participating country is best left to Government authorities, we support the inclusion of additional countries as appropriate. We would be opposed to specific restrictions or limitations

on participating countries, as envisioned in this particular legislation.

The benefit of the program has been clearly proven and the need

for it to remain a pilot program has ceased. To sunset the program

at this time or in the future would not only require a reinvestment

of significant capital, both human and otherwise, but would also

prove unnecessary and counterproductive. In addition, because the

program is based on reciprocity, any termination or restriction

would likely result in a substantial backlash by participating nations against U.S. citizens traveling abroad when they attempt to

enter other visa waiver countries.
78

Visa waiver participants by their very definition are low-risk

travelers. There has been no data which indicates that visa waiver

travelers stay longer than permitted or otherwise violate the terms

of their admission in any greater numbers than any other traveling

population. To the contrary, we believe the opposite is true.

Another important benefit of the program has been its impetus

for standardization of passports and machine-readable documentation as an inducement for acceptance of a country into the program. The ability to read a document by machine has greatly increased the efficiency of the Federal inspection process and has allowed our members to collect and transmit certain passenger data

to INS in advance of the flight's arrival.

While we strongly support the pilot program being made permanent, as well as expanded, improvement is needed. Congress obviously recognized the need for a better immigrant tracking system

when it enacted sections 109 and 110 of the 1996 Act which mandated a joint study and a transition to automated collection of arrival and departure information. The airline industry has readily

participated in this joint study and our report is shortly forthcoming.

I would like to particularly emphasize that no arrival and departure system designed to accurately track passengers who overstay

their visits will be complete unless all modes of entry and exit are

similarly controlled, including land and seaport. All arrivals by air

do not necessarily depart by air. Thus, an open-looped automated

system will always be statistically flawed.

I would, however, emphasize that it seems unnecessary to delay

making the program permanent until such a system can be put

into place. The 9-year experience of this program is sufficient to

E>rove its value. This experience has also proven the program poses

imited risk to the United States. Keeping a program as a perpetual pilot serves no useful purpose and has actually been the source

of disruption when the program has been threatened with a lapse

or, as in one instance, did lapse for a short period of time.

The traveling public will be better served by making it permanent now. At a minimum, a multi-year extension should be considered as an alternative to making the program permanent. In the

future, should events require that the program be modified somewhat, that action could then take place at the appropriate time.

On a related issue, our members have been negotiating with INS,

the U.S. Customs Service, and the U.S. Department of Agriculture

for the last 4 years to enter into a cooperative venture whereby the

carriers will provide biographic data electronically in advance of

the arrival of international passengers. We have recently met with

INS, the lead agency, to finalize those discussions, and we hope to

quickly resolve the few remaining issues and presumably sign a

memorandum of understanding tohegin this program.

This data will provide additional information to the INS on all

passengers, and particularly visa waiver passengers, allowing the

INS to perform its look-out checks and analyses well in advance of

the arrival of passengers. Not only will this further facilitate the

entry process, but it will also prove an important and effective enforcement tool. In our preliminary joint discussions, as directed by

the 1996 Act, it appears this data could also serve as part of the
79

backbone of an automated arrival and departure system. Thus,

there should be no reason for further delays in making the Visa

Waiver Program permanent. In this regard, we strongly urge the

subcommittee to take action to accomplish this goal at its earliest

convenience.

Mr. Chairman, I would be pleased to respond to any questions

you or committee members may have.

[The prepared statement of Ms. Thomas follows:]

PREPARED STATEMENT OF JANET THOMAS

Mr. Chairman and Members of the Subcommittee, I am Janet Thomas, Director

of Facilitation for the Air Transport Association of America (ATA). ATA represents

the major commercial passenger and cargo air carriers in the United States.L Collectively, our members account for over 95 percent of all revenue passenger and cargo

ton miles that scheduled air carriers operate in this country.

We very much appreciate this opportunity to present to the Subcommittee the

views of tile U.S. commercial airline industry regarding the Visa Waiver Pilot Program (VWPP). Since its creation by Congress in 1986, and subsequent implementation by the Immigration and Naturalization Service (INS) in 1988, our member airlines have had an extremely high success rate with the VWPP. This program affords

a citizen of a participating country to forego visa application at a U.S. consulate

abroad, and allows them to travel to the U.S. for business or pleasure and make

application for entry directly to the INS at a port of entry. To use this privilege,

an applicant agrees to waive rights to challenge the decision of the INS inspector,

and agrees to depart the U.S. within 90 days. Of the total number of non-immigrant

entries by citizens of Visa Waiver countries, 76 percent used the VWPP, or more

than 10 million people in FY 1995 (according to INS). This accounted for just under

60 percent of all temporary business and tourist entries. This program has had an

unprecedented success in reducing barriers to travel and tourism to and from the

United States. The U.S. airline industry is very pleased to have played a role in

this success.

In the nearly ten years since the Visa Waiver Pilot Program's implementation,

international airline passengers have become accustomed to the program's requirements, and use it routinely. The program has served well the purpose for which it

was designed: to facilitate the easy and efficient flow of low-risk foreign tourists and

business travelers. Simultaneously, the program has afforded Department of State

consular officers more time to focus their efforts on those individuals whose visits

to the U.S. are for other purposes, such as employment or study, or those who intend to remain in the U.S. for extended periods. Further, it has allowed the Department of State to drastically reduce its consular staff at low-risk locations, resulting

in a significant cost savings to the U.S. taxpayer. Yet, all this pales in comparison

to the real benefit of the Visa Waiver Pilot Program•that of expanded foreign travel and tourism to the U.S., an $84 billion a year industry. Put simply, the U.S.

needs this program to remain competitive with the many other nations around the

globe who are competing for the finite travel dollar.

The Air Transport Association member airlines strongly support the transition of

the Visa Waiver Pilot Program to a permanent program, with expanded participation. With regard to S. 290, while we believe the decision on the admission of a participating country is best left to the government authorities, we support the inclusion of additional countries, as appropriate. However, we would be opposed to the

specific restrictions or limitations on participating countries as envisioned in this

specific legislation.

While the pilot program has been extended periodically since its inception, the unqualified success of the program speaks strongly on behalf of it being made permanent. Further, because the program's life has at times been uncertain and somewhat

unpredictable, particularly at periods near the end of its temporary life, any real

or perceived lapse in the program causes much needless turmoil and uncertainty

among the industry, government (both here and abroad) and, most importantly, the

1 U.S. Flag members are: Alaska Airlines, Aloha Airlines, American Airlines, American Trans

Air, America West Airlines, Continental Airlines, Delta Air Lines, DHL Airways, Emery Worldwide, Evergreen International Airlines, Federal Express, Hawaiian Airlines, KIWI Airlines, Midwest Express, Northwest Airlines, Polar Air Cargo, Reeve Aleutian Airways, Southwest Airlines,

Trans World Airlines, United Airlines, United Parcel Service, and US Airways. Our technical

members include: Air Canada, Canadian Airlines International, and KLM-Royal Dutch Airlines.
80

traveling public. In the nearly ten years since the program's implementation, the

benefit of the program has been clearly proven, and the need for it to remain a pilot

program has ceased. To sunset the program at this time or in the future would not

only require a reinvestment of significant capital, both human and otherwise, but

would also prove unnecessary and counterproductive. In addition, because the Visa

Waiver Pilot Program is based on reciprocity, any termination or restriction of the

program would likely result in a substantial backlash by other participating nations

against U.S. citizens traveling abroad, resulting in more entry burdens for U.S. citizens when they attempt to enter other visa waiver countries.

Visa Waiver participants, by their very definition, are low-risk travelers. There

has been no data which indicates that Visa Waiver travelers stay longer than permitted or otherwise violate the terms of their admission in any greater numbers

than any other population of the traveling public. To the contrary, it appears the

opposite is true.

Another important benefit of the Visa Waiver Pilot Program has been its impetus

for expedited standardization of passports and machine readable documentation, as

an inducement for acceptance of a country into the program. The ability to read a

document by machine has greatly increased the efficiency of the Federal Inspection

Service Process, and has allowed our member airlines to collect and transmit certain

passenger data to INS in advance of the flight arrival.

While we strongly support the pilot program being made permanent as well as

expanded, we also have several suggestions which might be of use in improving the

program. First, a suggested improvement to the program would be a better INS

tracking system. Congress obviously recognized this need when it enacted Section

109 and Section 110 of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, which mandated a joint study and a transition to automated collection of arrival and departure information. The airline industry has readily participated in this joint study, and our report should be finalized in the near future. I

would like to emphasize that no arrival and departure system designed to track accurately passengers who overstay their visits, or the movements of foreign visitors

will be complete unless all modes of entry and exit are similarly controlled, including land and seaports. All arrivals by air do not depart by air; thus an open-loop

automated system will always be statistically flawed.

I would also like to emphasize that, in our opinion, it seems unnecessary to delay

making the Visa Waiver Pilot Program permanent until such a system can be put

into place. The nine-year experience of this program is sufficient to prove the value

of the program. Concurrently, this extensive experience has also proven the program

poses limited risk to the United States. Keeping the program as a perpetual pilot

program serves no useful purpose, and as I mentioned previously, has actually been

a source of intense disruption when the program has been threatened with a lapse

period, or as in one instance, actually did lapse for a period of time. The traveling

public will be better served by making it permanent now. At a minimum, a multiyear extension should be considered as an alternative to making the program permanent. In the future, should events require that the program be modified somewhat, that action could then take place at the appropriate time.

On a related issue, our member airlines have been negotiating with INS, the U.S.

Customs Service, and the U.S. Department of Agriculture for the last four years to

enter into a cooperative venture whereby the carriers will provide biographic data

electronically, in advance of the arrival of international passengers. We will be

meeting again with INS, the lead agency, in the near future to finalize those discussions and presumably sign a Memorandum of Understanding (MOU) to begin this

program. This data will provide additional information to the INS on all passengers,

and particularly Visa Waiver passengers, allowing the INS to perform its lookout

checks and analyses well in advance of the arrival of passengers. Not only will this

further facilitate the entry process, but it will also prove an important and effective

enforcement tool. In our preliminary joint discussions as directed by the 1996 Act.

it appears this data could also serve as part of the backbone of an automated arrival

and departure system. Thus, there should be no reason for further delays in making

the Visa Waiver program permanent. In this regard, we strongly urge the Subcommittee to take action to accomplish this goal at its earliest convenience, but well

in advance of the September 30th sunset date.

Mr. Chairman, I would be pleased to respond to any questions you, or any Member of the Subcommittee may nave.

Senator ABRAHAM. I thank all three of you.

Senator Kennedy, we will turn to you if you have opening comments and/or questions.
81

Senator KENNEDY. Well, thank you very much. I would just put

my opening comments in the record, if I could, Mr. Chairman.

Senator ABRAHAM. Fine.

STATEMENT OF HON. EDWARD M. KENNEDY, A U.S. SENATOR

FROM THE STATE OF MASSACHUSETTS

Senator KENNEDY. Mr. Chairman, I want to join in welcoming

our panels today, our first and second panel. I particularly want to

commend Mary Ryan, Mr. Chairman. I have had the good opportunity to go down to that office in the State Department and see

that operation work I am sure it is true for all of our guest witnesses today that it is often that the work that is being done, particularly in reuniting families and issuing passports, in many instances on an emergency basis, facilitating the opportunities for

business travel, and sometimes with enormous complexity, difficulty, and timeliness, is work that is not always recognized or understood in the various stressful times that the Department is

working on major issues and policy.

But it is something that makes a big difference to a lot of people's lives, and I just want to take this good opportunity to commend her for a long life of commitment in this office and say how

much we benefit from her observations on so many of these issues

and how much our committee has benefited from insights on so

many of these questions that relate not only to numbers and countries, but very importantly to people.

I just wanted to visit for a moment about the importance of the

visa program. I think Mary Ryan had mentioned the amounts of

people that come into this country and take advantage of it and

what it means in terms of American commerce. It is sort of

counter-intuitive that we have this program that is set up and that

because it is working and functioning today, it is not sort of some

gimmick to bypass American laws and therefore more illegals sort

of come into the country.

You would think if you had a more rigorous kind of a scheduling

program and greater kind of oversight that you would be able to

stop people from going through the program. But the point that

you make is, looking at the profile of people that are coming in and

recognizing from that profile the reality of their return to the country and being able to focus other resources where the real trouble

spots are, in fact, you are able to make a greater impact in reducing illegal immigration from your particular shop.

I think that is enormously important because, generally speaking, people would think of it that way. I think, having watched that

Erogram function and work, the availability of both visitors and the

usiness community in terms of international business•as we are

moving on into the next millennium, is going to continue to grow

in a very important way, and it will have to if we are going to be

a part of the world community. I think that is something that we

need some good understanding about.

And the other side of it is if we didn't extend this program in the

fall, I would be interested if you could just briefly tell us what

would be the implications on the consulates.

Ms. RYAN. Senator, it is almost too horrible to contemplate if
Senator KENNEDY. Well, that is what we are used to around

here. You have come to the right place. [Laughter.]

Ms. RYAN (continuing). This program is not extended, because we

would have to go back to visa issuance in 25 countries which are

low-risk, low-fraud countries. We would have to shift resources

away from the higher-risk and higher-fraud countries in order to

staff because we don't have enough staff really to do what we are

doing right now. So we certainly don't have enough staff to add 25

countries to what we are doing.

It seems to me to be a loss all the way around. It is a loss for

the State Department, it is a loss for the U.S. taxpayer, it is a loss

for the travel and tourism industry. So you are right in saying that

because we are able to shift our resources to the higher-fraud countries, we are doing a better job on border security. That certainly

is our opinion.

These countries that are in the program•we are talking about

the United Kingdom, France, Italy, Germany, Japan, Australia,

New Zealand, countries like that, which are very, very low-risk and

would make no sense to try to go back to visa issuance, plus millions of citizens of these countries would need visas. We couldn't do

it, quite honestly. I don't know what would happen, but we really

could not begin to be able to cope with the workload.

Senator KENNEDY. I would just mention all of the debate and discussion on Ireland. I have information that, for example, according

to the 1996 report for the central statistics of Ireland from April

1995 to 1996, the number of people returning to Ireland from the

United States was 10 percent greater than those leaving Ireland to

come to the United States. You may be familiar with the study or

the report.

This raises another kind of question, and that is I would think

there would be more flexibility, or at least maybe we should be

more flexible in terms of extending this program. I missed the earlier presentation in terms of Korea, but all you have to do is look

at the numbers, the 458,000 that are coming into the United

States. We have other areas that have particular interest•Portugal and Greece in our part of the country where there is enormous movement and increasing commercial kinds of activity.

If there was a review in terms of the monitoring of what happens

to them after they come here•I mean, this is the entry-exit tracking system which I think you are familiar with. We passed that in

1981 and re-enacted, I think, in 1986, and I guess 1996 as well.

Yet, that hasn't been sort of set up so that we would actually be

able to monitor very closely who comes in, who stays, and who

doesn't stay. That might be a way of sort of considering other countries, perhaps, with this kind of measure in place so we would

know early on that there are going to be abuses that are taking

place and then be able to do what has to be done to stop it.

Just developing this entry-exit tracking system would be very,

very important, I would think, in being able to identify illegals that

are going to be coming in. In any event, so you have better identification on the illegals, and you would also, perhaps, be able to provide enhanced opportunity for travel among people that are serious

about either just visiting here or doing business here and then

going home.
83

Could you give me your reaction?

Ms. RYAN. It would be enormously useful, Senator, and we are

working with the Immigration and Naturalization Service to try to

develop such a program where we have real departure controls so

that we know who stays in the country. Right now, we really don't.

I think the INS makes a very educated guess at it, but it is no

more than that.

Senator KENNEDY. We have half of all illegals, as we know, those

who overstay, so this would be important in terms of the illegals,

and also you might have some flexibility in terms of some of the

countries that are very close in terms of meeting the break-off

point at the present time, you know, beyond the 25 countries. So

we would be able to have some greater flexibility toward them.

Ms. RYAN. Yes.

Senator KENNEDY. Where are you on the development of the program? I mean, is this something that is in play at some time? I

mean, what can you tell us about it?

Mr. CRONIN. We are certainly working on it right now, Senator,

since the passage of the 1996 Act. It is nowhere near final form at

this point in terms of saying what the system is going to look like

or what we will certify as a departure management system.

We are doing a pilot right now on a single flight between Munich

and Philadelphia using airline ticket stock as the basis for automated tracking of persons entering and departing the country. As

Ms. Thomas mentioned, we are very close to entering into a memorandum of understanding [MOU] with the airlines in terms of expansion of receipt of automated data from the airlines to permit us

to use that data to record the entry of people and to check our

databases when they enter.

These are all building blocks going into that system. We do have

another year and 3 months to work in terms of how that system

is going to look in final form, but we are working on trying to pull

these various parts of the system together.

Senator KENNEDY. I might just mention, since there is some contact from our part of the country with the BVI, the British Virgin

Islands, which is the second most wealthy country in the Caribbean•they have inquired about whether there could be something

that is similar to the Cayman Islands. I am not familiar in detail,

but maybe I could inquire. You could perhaps send a response to

me on that, whether that would be able to

Mr. CRONIN. We are going to do a site visit to the British Virgin

Islands.

Senator KENNEDY. OK

Mr. CRONIN. There is a staffer going down there in a few months.

Senator KENNEDY. I would, if I could, Mr. Chairman•perhaps

you will join•if we could ask both INS and State about, from the

State Department's perspective, what impact has the waiver had

on the control of the borders. How has the waiver program enabled

consulars to stop illegal entry and facilitate bona fide travel? And

for the INS, what is the INS perspective on the waiver contribution

of controlling the borders, just to get additional kind of information

because this is going to be a matter of some considerable debate,

I believe?
84

I would appreciate the opportunity to gather from you for the

record some rather specific information along this general area so

that it helps build the case for those that are interested in building

the case. And I would appreciate if you could keep us informed

about how you are moving ahead with the development of the program in terms of the entry-exit review. I would be very interested

in it. I think it is very, very important and could be really significant as a tool in terms of the illegals and we would be interested,

and also perhaps in terms of some of the legal immigrants. It could

be very, very important.

I want to thank the Chair, Senator Abraham, for the diligence

and the work that he is doing in ventilating so many of these aspects of immigration policy. It is enormously important and greatly

misunderstood in terms of many features of it, and needs the kind

of oversight and attention that the good Senator is providing. It is

a pleasure to have a chance to work with him, and I thank all of

ourguests.

[The prepared statement of Senator Kennedy follows:]

PREPARED STATEMENT OF SENATOR EDWARD M. KENNEDY

I commend Senator Abraham for convening this important hearing on the reauthorization of the visa waiver program. This program has served the nation well,

and should be renewed.

The presence of so many distinguished witnesses here today urging us to expand

the program is solid evidence of its growing importance to business and tourism in

our states.

The Visa Waiver Program started as a pilot program in 1988 with only one country. Today, it has grown to become an important part of our overall immigration

policy. Twenty-five countries now qualify for the program, and it is bringing significant benefits to the United States as well as to visitors from those nations.

Almost half of those who come to the United States for business or tourism now

enter under this program. Billions of dollars in international business transactions

are facilitated by the ease of travel that it makes available. According to the Travel

Industry Association of America, tourists coming to this country under the program

contribute $84 billion to the economy and help support 947,000 American jobs in

the tourist industry.

The visa waiver program also enhances immigration enforcement. Rather than

spending tax dollars to conduct needless visa interviews, the program enables us to

concentrate scarce resources on the real immigration problems of keeping criminals

and terrorists out and dealing more effectively with visa fraud. As a result of this

program, millions of dollars and scores of consular personnel have been reallocated

to target the most serious immigration threats.

Countries must meet strict criteria before they can participate in the program, in

order to prevent illegal immigration to the United States. The Attorney General can

cancel a country's participation at any time, if she believes a waiver compromises

law enforcement or national security interests.

Travelers from participating countries can come to the United States without

visas, but they still must be interviewed by U.S. immigration officials at the airport

or other points of entry before they are admitted to the country. INS statistics suggest that few travelers abuse the program to enter the United States illegally. INS

has turned away less than one percent of those seeking entry under the program.

Despite its benefits, there are issues that must be addressed. I will be interested

to learn today when the Immigration Service will develop the capability to track not

only who comes into the United States, but who leaves the country. Today, we do

not know this information with enough certainty, but it's an important fact in deciding whether countries should remain in the program.

We will also have a chance to ask whether it is appropriate to modify the criteria

to include additional countries, and if so, whether additional steps are needed to

prevent illegal immigration.

Again, I commend Senator Abraham for holding this important hearing.

Senator ABRAHAM. Thank you, Senator. Thanks for coming today.
85

I would just follow up, really, Senator Kennedy's last request. I

think it would be as helpful as possible to have both anecdotal as

well as statistical analysis with regard to consequences of this program.

Ms. RYAN. Absolutely, Mr. Chairman.

Senator ABRAHAM. Let me turn to one specific issue, and maybe

it was in the testimony and I didn't hear it, Mr. Cronin. I want to

just come back. I know I heard both of the other two witnesses indicate that their recommendation was for permanent extension.

Did you make a comment on that?

Mr. CRONIN. AS I indicated, the Attorney General has requested

an overall review of the program. We have convened an interagency working group which is now looking at the program in

many aspects, and they anticipate the work of that panel being

done within 6 months. And the Attorney General at that point

would be prepared to make a recommendation as to whether the

program should be permanent or not. I have to say until that point

we would support a temporary•we certainly support reauthorization of the program.

Senator ABRAHAM. It kind of went past me as to whether you

had indicated a position.

Let me ask all of you, though•obviously, there is a wide range

of interim options to a permanent solution. Some would suggest another 1-year extension, as we have basically been operating on now.

Could you just comment on the impact of a simple 1-year extension

versus a longer extension? Should we not make it a permanent extension?

Ms. RYAN. We would favor a multi-year extension rather than a

1-year extension. The 1-year extension I don't think provides us

enough time. Lots of citizens of the visa waiver countries become

apprehensive toward the end of September and want therefore to

have visas, so that we have a heavier workload in those consulates

and embassies in those countries for no reason, because with the

exception of 1994 when the program lapsed for just about a week,

it has always been reauthorized.

But in the run up to September 30, we are heavily impacted by

citizens of Germany, particularly, but other countries as well, who

fear that they are not going to be able to get into the United States

unless they have a visa, and therefore want a visa. So from our

perspective, we would much prefer more than a 1-year extension.

Senator ABRAHAM. Would the others care to comment?

Ms. THOMAS. Mr. Chairman, we strongly agree with Ms. Ryan.

We, too, have experienced the panic and the anxiety in September

of every year, you know, in a 1-year extension situation where our

agents abroad have to deal with the passengers. It becomes a training issue as to whether or not to board a person without a visa.

It becomes a long-range planning issue, and we would strongly support a multi-year extension as opposed to a 1-year extension.

Mr. CRONIN. The length of the extension really wouldn't be of

great moment to us, Mr. Chairman. The multi-year extensions

have worked well in the past.

Senator ABRAHAM. Mr. Cronin, let me just go back to the question of the exit-entry program. Actually, to all of you on the panel,

where in your•I realize it is impossible to say that precisely on a
86

given date, something will be finished, but I believe the legislation

that was passed last year set as a target date September 30, 1998.

Mr. CRONIN. 1998, right.

Senator ABRAHAM. Is it your current position, or is it the INS'

view that that date will be met?

Mr. CRONIN. In terms of having a system ready to go in at least

some environments, yes. We are very, very concerned about land

border in terms of a lot of infrastructural issues. We don't do departure staffing on outbound lanes at this point. There are a lot of

issues in terms of how we would actually gather data on outbound

persons on land border and in other environments•private aircraft

and boats and that sort of thing. In the airport environment, we

can certainly•because it is a more controlled environment, we will

certainly be ready to go by the target date, I think, in terms of having a system up and running.

Senator ABRAHAM. Currently, the 1-94 program•is that the current program that I guess you all have been working on?

Mr. CRONIN. Right.

Senator ABRAHAM. Could you describe what the problems are

with it because I know it has not been able to work and leads us

toward finding alternative solutions?

Mr. CRONIN. I would be happy to. The system basically in terms

of what it is designed to do does indeed work. A paper record of

arrival is collected on every nonimmigrant who enters the United

States in certain categories. Not all nonimmigrant entries are documented. Persons crossing the Mexican border use a border crossing

card, for example, so we don't capture data on those land border

crossings.

But persons entering basically from Europe and the Eastern

Hemisphere do complete a landing card. The arrival portion of that

card is endorsed by the officer and sent to a data entry contractor

who enters that record into a system. The person is left with a departure record which remains in the passport and when they depart the United States, the airlines collect that record and batch

it and send it to INS at the port of entry, who then sends that to

a contractor for entry of that data into the system and matching

of those records.

We do indeed use that system to track individual cases, and if

persons are reflected as overstays, that data goes into our look-out

system to try to intercept those people. The problem has arisen in

terms of making statistical formulations of overstay data from that

system. Up until 1992, the data was relatively stable and our statisticians could use the data in the system to project relatively accurate overstay rates on a country-by-country basis.

What we found due to a series of problems, actually, was that in

the years after that they became unable to do their calculations on

the basis of the data they had. There were spikes in data that were

unexplained. There was some data lost that was unexplained. We

revamped the system. We did put a new system in place in 1996,

but encountered some problems with that system as well. The

matching criteria were far too tight.

When persons submitted departure records, even a minimal discrepancy would cause that record not to be matched. So we were

generated false overstay records on individuals, as well as false
87

overstay rates. And we are now working once again to revamp the

system and attempt to correct the problems we had with that so

we can at least use that data to do those overstay projections.

Senator ABRAHAM. SO, basically, you were having problems as

simple as a kind of merger problem on your file?

Mr. CRONIN. It is a matching of the arrival and departure record,

precisely.

Senator ABRAHAM. SO if Cronin was spelled with two n's by accident on the departure file, then it wouldn't match up with the

entry file if it had one n?

Mr. CRONIN. If there was a problem with the date of birth, if

there was a letter missing even from the country of citizenship, we

were having difficulty with that. Again, with the system that was

reintroduced, there made the matching criteria far too tight.

Senator ABRAHAM. I gather in moving toward this automated

exit-entry system, some of these problems are being addressed?

Mr. CRONIN. Absolutely. We have directed the ports of entry to

be a bit more assiduous with the airlines in terms of ensuring that

data are collected properly. But, also, we are looking at those in

terms of the departure system.

Senator ABRAHAM. Does that make it difficult, though, to determine with regard to the waiver program whether a country that

has been part of the program remains qualified?

Mr. CRONIN. Overstay rates would be certainly the easiest way

to judge whether that 2-percent violation rate has occurred. However, we do track every other indicator. We track exclusions. We

track withdrawals and refusals of persons at the port of entry. We

track criminal apprehensions by nationality and immigration violations by nationality. So, overall, you know, we are confident in saying that the program is functioning the way it is supposed to. The

nationalities remain low-risk and we don't see indicators of tremendous abuse.

Senator ABRAHAM. MS. Ryan, do you feel comfortable, as well,

with regard to the monitoring of the countries who qualify or those

who seek to qualify?

Ms. RYAN. Yes. As Mr. Cronin said, INS does monitor the turnaround rates, the criminal aliens, all of that. So, yes, we are comfortable with the statistics.

Senator ABRAHAM. Did you want to comment on this process because I know the Air Transport Association is also involved? We

would appreciate your perspective.

Ms. THOMAS. Yes, Mr. Chairman. Thank you. I think just from

Mr. Cronin's description of the current paper process, you can easily see what the problem is. It is a question of little pieces of paper

going through too many hands, and there is a great opportunity for

loss of large amounts of data and we know that that has occurred.

As Mr. Cronin has said, that has resulted in false overstay rates,

as well as just tremendous gaps of information. And so we have

been working very closely with them, particularly within the last

6 months, to bring some of these online programs to fruition.

Senator ABRAHAM. Let me ask you, just to follow up to satisfy

one of my concerns here, on the disqualification rate•that is, countries that are part of the waiver program•that basically is folks

who are turned away at the border who have gotten that far be-
88

cause of the waiver, but are still analyzed in terms of whether or

not they are on a

Mr. CRONIN. It is a total of all violations, Senator. It would be

also persons who are apprehended in the country.

Senator ABRAHAM. OK, so it is all of those factors?

Mr. CRONIN. Right.

Senator ABRAHAM. And that is when you talked about the numbers going up a little bit?

Mr. CRONIN. That was refusal at the port of entry, yes, exactly.

We have seen increases, and again the numbers, I think, speak for

themselves. You talk about 7,000 refusals out of 12 million admissions, so it is a minuscule problem, and we think in relation to the

passports of visa waiver countries and abuse of those passports, an

increase in refusals at the ports of entry.

Senator ABRAHAM. One other thing, then, that I am going to request maybe would be a further elaboration•and perhaps that has

already been submitted in testimony or in other forms•as to the

various criteria and factors that are used to make these disqualification assessments. Inasmuch as we are having trouble with the

exit-entry system, people say, well, how can we be confident of any

of the decisions that are made? It, of course, works the other way,

too. People say, well, gee, we are being excluded and we should be

included, but the data are inaccurate. So if somehow between the

Justice Department and the State Department, we could get a full

explanation or maybe an outline of how the different factors are

combined, I would appreciate that.

It is almost 5 o'clock and, as I say, we started late, but I do want

to ask a couple of questions pertinent to the issue of Senate bill 290

with regard to Korea. First of all, I would ask all panelists if they

would like to make just sort of general comments on the proposal

that is before us.

Ms. RYAN. Thank you, Mr. Chairman. Yes, I would. The State

Department would oppose Senator Murkowski's bill as written. We

think that it should be U.S. Government officials who make the decision on visa eligibility and we should not give that authority to

travel agents. If the decision is made that Korea should be included

in the Visa Waiver Program, we would much prefer the kind of criteria in the established program.

I mean, you might raise the refusal rate or do it that way or do

it in 1 year or something like that, but some objective criteria that

we could point to to other countries who might also want to be in

the program. I would point out that Mexico is our second biggest

trading partner, so if we are going strictly on the basis of who our

big trading partners are, I think we would want some other criteria

to include countries in the Visa Waiver Program. We would much

rather have objective criteria such as exist in the program now.

Senator ABRAHAM. Mr. Cronin.

Mr. CRONIN. I just want to be able to make a more definitive

statement, Senator, after the Department of Justice review is completed on the program. But as of right now, at least, we are certainly comfortable with the criteria as they exist and would oppose

any change in the criteria for eligibility of countries in the program.
89

Ms. THOMAS. AS I said in my oral testimony, we welcome the inclusion of additional countries. We do feel that that is a Government function, so we would neither support nor not support any

particular country. However, we do raise the concern that instituting a pilot program that has different criteria than the currently

participating countries•we would not support that scheme.

Senator ABRAHAM. Let me ask•and I am not sure who might

have the answer to this. South Korea is close, as I understand it,

to the sort of rejection rate•

Ms. RYAN. It is close, but it hasn't met the established criteria.

Senator ABRAHAM. The 2 percent, or no higher than 2.5 percent?

Ms. RYAN. The 2 percent and no more than 2.5 percent in any

one year.

Senator ABRAHAM. Are there other countries that are in that

range right now?

Ms. RYAN. Yes. We have a chart that would show you all the

countries that are in the range of South Korea. It is sort of hard

to read, small print, but

Senator ABRAHAM. If I can read this, then I don't have to have

an ophthalmology appointment for 6, 7 years, right? [Laughter.]

Ms. RYAN. YOU can see that Korea is at 2.87 percent.

Senator ABRAHAM. Could you turn the chart just slightly? That

is fine for me, but I don't know if the panel can see it now.

Ms. RYAN. Korea is at 2.87 percent refusal rate for fiscal year

1996.

Senator ABRAHAM. SO there are essentially 3 countries that

are

Ms. RYAN. All of the countries above Korea would thereby have

lower refusal rates for fiscal year 1996. The countries that have

been discussed were•of course, Greece was one that was mentioned. Portugal was mentioned. Portugal is down here at 3.2 percent. Greece is at 2.48 percent, which is lower than Korea is, and

then there are these countries above with lower rates, under 2 percent, starting with South Africa and working all the way down to

the Solomon Islands. We issued 34 visas and we didn't refuse any.

Senator ABRAHAM. Somebody has just given me exactly this

chart. None of the countries on this list then are currently eligible

for the program?

Ms. RYAN. Countries are under 2 percent, but we have other concerns, either law enforcement concerns or the security of their

passport or their citizenship laws, things like that. So we are not

prepared to propose to the Attorney General any other countries.

We have one country that is pending a decision by the Department

of Justice, and that is Slovenia, which we think could be added to

the program. We are waiting for the Justice Department's decision.

Senator ABRAHAM. Has any preliminary discussion with respect

to the Korea eligibility taken place as to these other criteria?

Ms. RYAN. The other criteria?

Senator ABRAHAM. Well, the ones that have caused these countries that are below 2 percent to be

Ms. RYAN. NO. Korea has a machine-readable passport, and I believe their citizenship laws are very stringent. One of the problems

that we are concerned about is the real jump in the reported lost

Korean passports. There were 8,000 Korean passports reported lost
90

in 1993. There were 24,000 reported lost in 1995. That is a big

jump.

Senator ABRAHAM. Right.

Ms. RYAN. And we fear that Korean passports are being used by

non-Koreans, photo-subbed, particularly the People's Republic of

China who are trying to enter the United States with photo-subbed

Korean passports.

Senator ABRAHAM. Let me ask you not for today, necessarily, but

perhaps as a follow-up to this to provide us with, if you could•

maybe it has already, again, been submitted through staff•just a

detail of some of these other reasons by which countries that are

below 2 percent are not included.

Ms. RYAN. Certainly, sir.

Senator ABRAHAM. And to the extent it is appropriate and feasible where Korea would•how they would be evaluated on those

measuring sticks so we would have a sense of whether or not, if

the number was changed or if their number went down, they would

meet the qualifications. That would be helpful, as well as the concerns you have raised, if there are others besides the lost passport

issue.

Ms. RYAN. Yes, sir, we will do that.

Senator ABRAHAM. We would be interested, I think, in having

that all for the record.

Let me ask you also, with respect to the bond as a safeguard that

has been discussed as part of that legislation, what, if any, response does State have to that as a proposed way to mitigate

Ms. RYAN. We think it is impractical and unwieldy, and we

would not be in favor of that.

Senator ABRAHAM. Could you elaborate on what the problems

are?

Ms. RYAN. I can answer for the record. I mean, they are establishing about a $200,000 bond. If somebody didn't return, would

that mean that the travel agent would automatically forfeit the

bond? Were there reasons beyond his knowledge? Should he be the

person who makes the decision on whether somebody is admitted

to the United States or not? There are all kinds of problems with

it. I would be happy to answer more fully for the record.

Senator ABRAHAM. OK

[The information referred to follows:]

RESPONSES OF MARY A. RYAN TO QUESTIONS FROM SENATOR ABRAHAM

Question 1. Assistant Secretary Ryan, Senator Murkowski's bill calls for travel

agencies to post a $200,000 bond to assure the return of Korean visitors participating in group tours to the United States as part of a program which would waive

nonimmigrant visas for these visitors. Does the Department of State have any concerns about implementing these provisions ifthey were to become law?

Answer 1. Logistically this procedure would be very cumbersome for the Department and for the travel agencies as well. First, we would have to develop procedures

for holding the money and for its forfeiture in the event visitors did not return. I

assure you there will be cases of package tour members who do not return. Despite

our best efforts, some applicants who intend to stay in the U.S. lie successfully to

our consular officers and get visas. Some would also lie to travel agents and stay

illegally in the United States.

The other major problem is how to verify the return of these visitors. We would

not want to rely on the travel agents themselves to certify the return of their clients

since this would be an obvious conflict of interest. And without U.S. departure controls, we have no definitive way to know an individual failed to depart. The best
91

way of assuring that each visitor under this program returns to Korea would be to

require that the visitors personally come to our Embassy with their passports after

the completion of their trip. This process would be even more cumbersome than applying for a visa.

Further, the requirement of a bond actually places travel agents in a less advantageous position than at present. Right now, participating travel agents submit visa

applications on behalf of their clients through the Embassy's T.A.R.P. program. No

bond is required and applications are handled promptly.

Question 2. If Korea were to meet the refusal rate criteria, would it otherwise

qualify to participate in the VWPP program?

Answer 2. As you are aware, recent legislation granted sole authority to the Attorney General in making final designations of countries for inclusion in the VWPP.

Previously, the final determination was made jointly by the Attorney General and

the Secretary of State.

The immigration act does not base VWPP inclusion solely on the refusal rate. In

addition, a country must meet the following conditions:

(A) The country must offer reciprocal treatment for American travelers;

(B) The country must be issuing or developing machine-readable passports;

(C) The Attorney General must determine that U.S. law enforcement interests

would not be compromised by designating the country for the VWPP.

Korea offers visa-free entry to American business visitors and tourists. They issue

machine readable passports. Because Korea has never met the basic statistical requirements for consideration in the VWPP, the Justice Department has not conducted a broad review to determine if there would be any law enforcement consequences.

Senator ABRAHAM. DO either of you have any comments further

on this issue?

Mr. CRONIN. NO, Senator, thank you.

Ms. THOMAS. NO, thank you.

Senator ABRAHAM. Well, I think inasmuch as we have passed 5

o'clock that we will let the hearing come to an end. We would appreciate fuller explanations on those for the record.

Ms. RYAN. Absolutely.

Senator ABRAHAM. I would also say I know there are some still

here, some of the witnesses from the first panel who may now have

a further insight into some of the concerns that have been raised,

and we would welcome any follow-up statements for the record or

responses for the record that might be apropos in light of the situation because we would like to hear all sides' views on this as we

move ahead.

We have a statement that Senator Feinstein has submitted and

we will include that in the record at this point.

[The prepared statement of Senator Feinstein follows:]

PREPARED STATEMENT OF SENATOR DIANNE FEINSTEIN, A U.S. SENATOR FROM THE

STATE OF CALIFORNIA

Mr. Chairman, the Visa Waiver Pilot Program has been lauded for contributing

to the increase in overseas trade and tourism since its creation by the 1986 Immigration Act.

Over 60 million tourists and business travelers have taken advantage of this program since 1988, generating an estimated travel and tourism revenue of $467 billion

and $64 billion in tax revenues for federal, state and local governments in 1995

alone.

Recent testimonies by the tourism industry before the House Immigration Subcommittee indicates that the current program is considered a success because it increases tourism and trade without seriously jeopardizing border security and increasing illegal immigration.

However, despite its successes, problems exist.
92

DOCUMENT FRAUD

INS testified today at the Immigration Subcommittee Hearing that the current

visa waiver program encourages document fraud due to limited security features in

some visa waiver passports, and multiple passport-issuing authorities used by some

countries under the visa waiver program.

INS also indicated that the attractiveness of using visa waiver pilot program passports to enter the U.S. illegally has increased along with the use of lost or stolen

blank visa waiver passports. In fact, INS indicated that the number of visa waiver

pilot program applicants who have been refused entry increased from 2,000 persons

in 1995, to 7,011 in 1996, mainly due to increases in document fraud.

Although INS has been working to combat document fraud by circulating up-todate information on fraudulent documents, INS is unable to combat this ever increasing problem alone.

What is more disturbing is that currently, INS and the State Department are unable to accurately calculate the number of visa overstays because there are no computerized entry-exit match systems in all ports of entry.

As you know, Congress recently passed the most comprehensive Illegal Immigration Reform since 1986, making it clear that Congress will toughen sanctions for

document fraud, stiffen penalties for alien smuggling and impose stiff sanctions for

visa overstays and illegal immigration. In fact, 64 percent of INS' $3.6 billion budget

request for FY98 was for enforcement activities against illegal immigration.

Before we reauthorize the current visa waiver pilot program or even worse, expand the program to other countries who may not even meet the current standards

to be eligible for the visa waiver program, we must carefully study the costs and

the benefits of the visa waiver program and its impact on document fraud and illegal immigration, making certain that those who come into the country do not overstay and add to the illegal immigration problem.

Thank you Mr. Chairman and I look forward to the testimonies.

Senator ABRAHAM. I want to thank all of you and certainly concede that the challenge of trying to make this work is a great one

and we will do our best to try to work with you to get this done

in the next 2 months.

Thank you.

[Whereupon, at 5:08 p.m., the subcommittee was adjourned.]

ISBN 0-16-055689-9

9 780160"556890

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