United States General Accounting Office

GAO Report to the Chairman, Committee on

the Judiciary, U.S. Senate

November 1997 AUTOMATED

EXPORT SYSTEM

Prospects for

Improving Data

Collection and

Enforcement Are

Uncertain

GAO/NSIAD-98-5

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-278136 

November 14, 1997

The Honorable Orrin Hatch

Chairman, Committee on the Judiciary

United States Senate

Dear Mr. Chairman:

Since the 1980s, federal agencies responsible for compiling U.S. trade

statistics and enforcing U.S. export laws have experienced serious

problems in obtaining accurate and timely data on exports. To improve

reporting and enhance enforcement efforts, the U.S. Customs Service and

the Census Bureau in 1991 initiated the Automated Export System (AES).

AES allows exporting companies to electronically enter data on shipments,

automatically checks for errors, and provides data to help detect export

violations. Although it introduced the system as voluntary, Customs

recognized that achieving a high level of participation in AES would be

difficult and wanted its use to be mandatory. In 1996, Customs sought to

make AES mandatory for some users. However, AES was not made

mandatory, in part because companies raised concerns about the impact

of AES on their business practices, especially if they are required to enter

data before shipments depart.

At your request, we reviewed the potential impact of AES and the views of

the export community regarding AES. Specifically, we sought to determine

whether AES is likely to achieve its objectives of improving export data,

enhancing enforcement efforts, and streamlining export data collection

and, in so doing, we obtained the export community’s views on AES. As you

requested, we are also providing information on the export procedures of

other selected countries. (See app. I for information on selected

countries.)

Background Merchandise trade, the exchange of goods with other nations, is an

increasingly important component of the U.S. economy. The U.S. Customs

Service collects data on imports and exports that the U.S. Census Bureau

uses to produce statistics on U.S. trade. While Customs has numerous

import responsibilities, its export functions include guarding against the

exportation of illegal goods, such as protected technologies, stolen

vehicles, and illegal currency.

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Customs has broad authority to enforce export laws and regulations.

However, it has historically placed more emphasis on imports than on

exports. While U.S. import data is recognized as generally reliable, export

data is viewed as less accurate. A 1997 Census report notes that the value

of U.S. exports has probably been underreported by between 3 and

7 percent but could be understated by as much as 10 percent.1

Underreporting of exports can significantly affect the accuracy of

statistics on the nation’s trade balance. Inaccurate trade statistics can be

an impediment in negotiations for bilateral and multilateral trade

agreements. Export statistics also are relied on by the government to

calculate the gross domestic product (which is used to assess the

performance of the U.S. economy) and to determine appropriate

promotional programs for expanding exports. Export data is also used to

establish controls on sensitive exports.

A primary source of export statistics is information that is recorded on a

form called the Shipper’s Export Declaration (SED). The SED contains

information such as the nature, value, quantity, and destination of the

goods to be exported. Generally, exporters or their agents are required by

regulation to file the SED for each export transaction having a value over a

certain amount, now set at $2,500 for all shipments without a license.2

Under current regulations, the SED must be delivered to the exporting

carrier prior to exportation.3

 Ocean and air carriers, with a bond on file,4

are permitted to file the complete manifest (a carriers manifest lists all the

cargo it is transporting) with Customs within 4 working days after

departure. For overland shipments, the SED must be presented to Customs

at the time of export.

The major sources of error in merchandise trade statistics include missing

SEDs and incomplete or inaccurate reporting. Since the 1980s, Customs,

Census, and other government agencies have conducted numerous

studies, which found serious problems with companies properly

completing the document and filing it at the required time and place. For

example, Customs completed an audit of selected ocean vessel manifests

in 1996 that found about 29 percent of shipments listed on the manifest did

not have the required SED. In 1997, Customs conducted an audit of airline

1

See “Understatement of Export Merchandise Trade Data,” U.S. Bureau of the Census, Foreign Trade

Division (Washington, D.C.: Jan. 1997).

2

Mail shipments must be reported if they have a value over $500.

3

15 C.F.R. § 30.12.

4

15 C.F.R. § 30.24.

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manifests that determined 40 percent of SEDs were incorrectly completed. 

Without a properly completed SED, an export is either not recorded or

recorded incorrectly.

Currently, about one-third of all export transactions are recorded on paper

SEDs. Census collects another third5 of the export data on a monthly basis

directly from exporting businesses through an electronic filing system

known as the Automated Export Reporting Program (AERP). Census is

terminating AERP in December 1999 because it believes the system is

outdated and that AES will provide more accurate data. (Twenty-five

percent of all AERP transmissions contain errors that must be corrected.)

Census officials stated that AERP has systems limitations related to the

amount of data it can accept. They stated that the system would require a

complete redesign in methodology and computer technology in order to be

able to accept more participants and improve data quality, resulting in a

system similar to AES. Census officials also noted that about one-third of all

AERP participants submit their data late via AERP.

Context for AES’

Development

Customs and Census initiated AES in 1991 to improve (1) the collection and

reporting of export statistics and (2) the enforcement of export

regulations. Initially, the system was designed to replace the manual

process of handling paper SEDs with a more efficient and less costly

automated process that would increase the accuracy, completeness, and

timeliness of SED data.

AES is an interactive system that allows exporters or their agents to

electronically transmit SED information directly to Customs before a

carrier’s departure. In order to improve the quality of export data, data

transmitted via AES is subjected to a series of automatic edits. The system

in turn sends back to the exporter a message to check the data if it does

not fall within statistical parameters developed by Customs and Census.

(See app. II for information on how AES works.)

According to Customs, AES was also designed to improve the enforcement

of export controls by evaluating the risk of export shipments based on

5

The remaining one-third of export data is captured by the U.S.-Canada data exchange, whereby the

United States and Canada exchange import records and use them to determine each country’s exports

to one another. For more information on the data exchange, see Measuring U.S.-Canada Trade: Shifting

Trade Winds May Threaten Recent Progress (GAO/GGD-94-4, Jan. 19, 1994).

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certain criteria, such as the country of destination and the type of cargo;6

compiling exporter histories; allowing for trend analysis; and providing

inspectors with detailed commodity data prior to departure. Customs

officials believe that the more export information they have, the more

focused their efforts to target illegal shipments will be.

Finally, in 1994, in response to several initiatives including the Vice

President’s National Performance Review, Customs decided that AES

should be expanded to provide a centralized database for collecting and

processing export documentation required by the U.S. government.

Customs planned to work with other U.S. government agencies that have

export-related responsibilities to help these agencies meet their export

information requirements through AES. (See p. 18 for a discussion of the

present status of the single electronic filing center.)

Customs installed AES in all U.S. vessel ports in October 1996, and

currently it is operational in all ports, including air, rail, and truck transit

ports.7

 Customs and Census officials estimate that they spent

approximately $12.9 million to develop and implement AES from fiscal 

year 1992 to 1997. These costs include, among other things, expenses for

contractors, travel, and training. According to Customs’ and Census’

figures, both agencies estimate that together they will spend an additional

$32.2 million through fiscal year 2002 on AES implementation and

maintenance.

This new system would require companies to make various changes in

how they submit their export data to Customs. Companies that submit

their export data via AERP will have to undergo modifications in

programming the processing of their export data or return to submitting

paper SEDs. Companies that submit their data via paper SEDs but want to

participate in AES will have to automate their export processing, and/or

purchase AES software, or use the facilities of a port authority or service

center to transmit their data.

In addition, some segments of the trade community have alleged that AES

will require major changes in their current business practices. Because

6

Customs officials estimate that they inspect less than 1 percent of export shipments. Customs has not

historically tracked the number of seizures that have resulted from its inspections. However, as of

June 1997, all ports have been required to collect data on all outbound cargo inspections, including all

commercial or personal shipments exported by any mode of transportation, and the resulting number

of seizures of illegal exports.

7

AES is not yet accepting transportation data for air, rail, and truck carriers. According to Customs

officials, AES will be accepting air and rail transportation data by the end of 1998 and truck

transportation data in 1999.

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Customs has not strictly enforced the legal requirement that companies

submit their SEDs to the carrier prior to departure, many companies have

grown accustomed to turning in their SEDs to the carriers late. AES will

require that companies file their export data directly to Customs, rather

than the carrier, prior to departure.

The trade community has varying views on AES. To obtain these views, we

conducted two surveys of potential AES users: (1) a nationally

representative sample of 400 U.S. ocean freight forwarders and Non-Vessel

Operating Common Carriers (NVOCC)8

 and (2) 80 U.S. exporting companies

that file paper SEDs. We also interviewed officials from 12 of the largest

U.S. sea and air carrier companies and several trade groups representing

various segments of the export community. (See app. III for complete

survey results.) (We did not independently verify information provided by

U.S. companies and trade groups.) We also interviewed Customs officials

at 13 sea, air, and land ports. As of June 1997, we completed the surveys

and interviews.

Results in Brief It is not yet clear what benefits will result from the use of AES because

many critical implementation issues remain unsolved. Although AES has

the potential to improve export reporting and enhance enforcement

efforts, it is unlikely to achieve these objectives unless more exporters are

willing to participate and limitations that prevent other agencies from fully

using the system are resolved. Concerning the trade community’s limited

participation, we identified the following:

• Only a small fraction of the export community—37 companies—is

currently using AES, and the data entered represents less than 1 percent of

all exports.

• Our survey of exporting companies suggests that most of them are not

likely to use AES over the next 3 years.

• Twenty-five percent of all U.S. ocean freight forwarders had not heard of

AES.

8

Freight forwarders and NVOCCs make the arrangements for the shipment of goods for most

exporters, including the filing of information required by Customs, Census, and other federal agencies.

NVOCCs differ from freight forwarders in that they may also lease a vessel to transport the goods. For

ease of presentation, hereafter we refer to both groups as “freight forwarders.” Although our freight

forwarder study population consisted of active licensed ocean freight forwarders and NVOCCs listed

by the Federal Maritime Commission, and is not representative of air freight forwarders, 85 percent of

the company officials we spoke with told us that their firms provide services to clients exporting by

air.

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The primary benefit cited by companies using AES and planning to use AES

was automated filing. Other benefits cited included the potential for

reducing paperwork and personnel and associated administrative costs,

participating in the initial development of AES, and filing all export data at

a central filing point. However, for some segments of the trade community,

these benefits are outweighed by their concerns regarding the

predeparture filing requirement, which they contend is inconsistent with

their business practices and will be costly and burdensome to their

business.

AES is designed to improve Customs’ enforcement efforts by providing

detailed commodity data to help the inspector target illegal shipments. It

also is designed to provide a database that can be run against specific

criteria to identify high-risk shipments and compile exporter histories.

However, the system’s usefulness as an enforcement tool is limited for

several reasons. First, as currently designed, it is not linked with the

databases of other law enforcement agencies. Second, under a program to

facilitate the use of AES, Customs plans to permit approved exporters to

file export data after shipment, which could undermine efforts to detect

export violations before illegal goods are transported. Third, AES allows

SED information to be transmitted only hours before a shipment’s

departure, which in most cases will not provide inspectors sufficient time

for targeting possible illegal shipments. Finally, many Customs inspectors

anticipate that illegal exporters are unlikely to use AES to file their export

data, further limiting AES’ potential as an enforcement tool.

Also, AES faces limitations in achieving its goal to create a single

information collection and processing center for the electronic filing of

export documentation required by the U.S. government. The system was

also designed to reduce related export documents. Many export-related

agencies are subject to existing regulations requiring them to retain their

own licensing procedures. Ten of the 13 agencies with major

export-related responsibilities say they have export requirements that will

not be fully satisfied through AES.

Customs is attempting to resolve these issues through several means. For

example, the Commissioner of Customs has proposed that Customs enter

into formal negotiations with the trade community to resolve outstanding

issues of concern. In addition, Customs is continuing to work with other

agencies to identify any of their export requirements that can be

potentially incorporated into AES.

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Because Customs and Census plan to spend $32 million beyond the

$13 million expended to date, we are concerned that Customs and Census

will allow the system to proceed without fully resolving these issues. In

our opinion, AES is at a critical juncture in its implementation. Senior

management attention at both Customs and Census is needed to determine

the extent to which concerns can be addressed that affect participation by

the export trade community, that deal with the improvement of export

enforcement, and that respond to the requirements of other agencies with

export-related functions. After addressing these concerns, a cost-benefit

analysis of AES is needed to determine how or whether to proceed with

implementation.

Factors Hindering

AES’ Ability to Meet

Its Objectives

Although AES has features to improve export data collection and

enforcement efforts and to reduce paperwork, the system’s effectiveness

is hindered by low participation of the export community. Unless AES

participation increases significantly, AES will not enhance the quality of

export data or the enforcement of export regulations. In addition, other

factors may limit AES’ ability to achieve its objective of enhancing export

control enforcement. For example, Customs’ plans to introduce a

post-departure filing program may impede the system’s effectiveness as a

tool for targeting illegal exports. Finally, AES will not likely serve as a

central point for collecting and processing all export documents because

other export-related agencies have information needs that they say cannot

be fulfilled through AES.

Trade Community

Participation Is Low and

Likely to Be Limited in the

Near Future

Trade community participation in AES is currently very limited, and our

work showed most companies do not have immediate plans to participate

in AES. As of September 1997, AES participants included 8 exporters, 27

freight forwarders, and 2 sea carriers out of tens of thousands of

export-related businesses. Currently, less than 1 percent of all export data

is being submitted via AES.

Customs expects participation in AES to increase for several reasons. For

example, Customs is planning to introduce the Automated Export System

Post-Departure Authorized Special System (AES-PASS), which is a program

designed to encourage participation in AES by allowing qualified exporters9

9

The exporter or the freight forwarder (on behalf of the exporter) will be allowed to apply for the

program, and government agencies with export requirements will be responsible for authorizing an

applicant’s participation. These agencies will review all applications according to criteria and

standards established by their respective agencies. Approval to participate in AES-PASS must be

unanimous.

Page 7 GAO/NSIAD-98-5 Automated Export System
B-278136 

 to submit a minimal amount of information prior to export—generally an

exporter identification number and a reference number for the shipment.

Further, Census is terminating AERP and hopes current users will switch to

AES. Customs also anticipates an increase in participation since AES first

came online in July 1997 for exports via air, truck, and rail.

Most Companies Surveyed Do

Not Have Immediate Plans to

Get on AES

Despite Customs’ expectations of increased participation, most companies

we surveyed do not have immediate plans to use AES. We surveyed 400

randomly selected freight forwarder companies and 80 exporters that file

paper SEDs. As shown in figures 1 and 2, only about 36 percent of freight

forwarders and about 32 percent of exporters we spoke with currently

plan to use AES to submit their SED information; only 50 percent and

42 percent of those companies, respectively, reported that they plan to get

on AES within the next 3 years. Of the companies that plan to use AES, only

4 percent of the freight forwarders and 5 percent of the exporters have

filed a notice with Customs10 that they plan to participate in AES or are

testing AES. (See fig. 3.) In addition, more than half the companies we

surveyed that plan to use AES do not know when they will use it. Most

companies did not know how much it will cost their company to

implement AES and were not familiar with the AES-PASS program (see fig. 4).

10In order to participate in AES, companies must file a notice, or letter of intent, with Customs.

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Figure 1: Freight Forwarders’ Plans

Regarding AES

Plans not known

25.0%

35.7%

25.3%

Never heard of AES

Plan to use

Will not use 14.0%

a

Note: To present a complete composite of ocean freight forwarders’ posture toward AES, figure 1

includes the responses from two survey questions: question 9, which asked whether or not

companies had heard of AES, and question 12, which asked those companies who had heard of

AES about their plans regarding its use.

aCompanies whose “plans are not known” include companies that were undecided about whether

to use AES and company officials we interviewed who did not know their companies’ plans

regarding AES.

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Figure 2: Exporters’ Plans Regarding

AES

17.5%

Never heard of AES Plan to use

Will not use Plans not known

31.7% 22.2%

28.6% a

Note: To present a complete composite of the total exporter survey population’s posture toward

AES, figure 1 includes the responses from two survey questions: question 9, which asked whether

or not companies had heard of AES, and question 12, which asked those companies who had

heard of AES about their plans regarding its use.

aCompanies whose “plans are not known” include companies that were undecided about whether

to use AES and company officials we interviewed who did not know their companies’ plans

regarding AES.

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Figure 3: Freight Forwarders’ and Exporters’ Status of Involvement With AES (Those Planning to Use AES)

Studying AES Planning to file Filed letter/testing Other Do not know

0

20

40

60

80

100

Status of involvement with AES among planned users

Percent of respondents

Freight Forwarder Exporter

a b

Note: Figure applies to the 117 freight forwarders and 20 exporters that plan to use AES.

aIncludes companies that filed a notice or letter of intent with Customs that they intend to get on

AES, and companies that are testing AES.

bComments from companies that responded that their status of involvement in AES was “other”

included those that were in the process of developing AES software or not at that time actively

pursuing participating in AES because of a lack of information on the system.

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Figure 4: Freight Forwarders’ and

Exporters’ Knowledge of AES (Those

Planning to Use AES)

Cost unknown Timing of use unknow AES-PASS unfamiliar

0

20

40

60

80

100

Knowledge of AES among planned users

Percent of respondents

Freight Forwarder Exporter

Timing of use unknown Unfamiliar with AES-PASS

Note: Figure applies to the 117 freight forwarders and 20 exporters that plan to use AES.

Benefits Cited by the Trade

Community Do Not Outweigh

Concerns

Companies and industry groups we spoke with cited certain benefits to

getting on AES. The primary incentive mentioned was automating their

export system. About 50 percent of the companies we surveyed that plan

to use AES said that automation was an incentive to use AES. The other

benefit voiced by over 15 percent of respondents was the potential for a

single filing point for all export data, referred to as “one-stop filing” by

Customs. In addition, those companies we interviewed that are already

using AES said that they were doing so to reduce paperwork and personnel

and associated administrative costs, take advantage of new automated

initiatives, and participate in the development of AES.

While the cost of automation and lack of knowledge regarding AES were

cited as possible impediments to AES participation by the export

Page 12 GAO/NSIAD-98-5 Automated Export System
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community,11 predeparture filing emerged as a key concern among some

segments of this group. Our work indicates that whether or not

predeparture filing posed a problem for businesses was related to the type

of export or mode of transportation used to export.

According to industry groups and several companies’ officials we

interviewed, filing information predeparture is inconsistent with their

business practices. These officials told us that they often do not know the

precise volume and value of their final shipment until just before

departure, which makes it difficult to file their paperwork on time.

Predeparture filing was a particular concern for exporters of bulk goods or

grain commodities. Some of these companies said that they would have to

enter estimates in AES prior to departure and that the estimates would then

have to be revised later, thereby resulting in rework. One exporter

described this as having to do “twice the work.”

Regarding carriers, all of the eight airlines and air couriers we spoke with

said that meeting the predeparture filing requirement would present a

problem for their current business operations; six said that they would not

participate in AES due to this requirement. While the air couriers we

interviewed said that they generally have the SEDs in hand prior to

departure, because of the fast-paced nature of the air courier business they

are unable to input SED data into AES before the aircraft departs.

Representatives from both these industries told us that they anticipate

having to input data into AES as a service to exporters and freight

forwarders.

Representatives from companies participating in Customs’ evaluation of

AES, conducted in two vessel ports in 1996 before AES was expanded to all

ports, indicated problems with predeparture filing. Representatives from

some companies stated that 80 percent of the time they have all the

information needed to complete the SED prior to departure of the vessel.

However, for the remaining 20 percent of the time, they have difficulty in

obtaining and providing predeparture data. In addition, the evaluation did

not include airlines and air couriers, which have significant concerns

regarding predeparture filing. It also did not include exporters of bulk

commodities that have similar concerns.

11Cost of automation was cited by 28 percent of freight forwarders not planning to use AES as a reason

for not doing so. None of the exporters we surveyed cited cost as a reason for not getting on AES.

(Current AES participants reported that their costs ranged from a $50 setup fee and $2.50 per AES

transmission fee for filers using the Internet to $250,000 for a company undergoing a complete

conversion from manual to automated filing.) Lack of knowledge about AES was cited by 11 percent of

freight forwarders and 36 percent of exporters we surveyed who did not plan to use AES.

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Export industry groups also have repeatedly expressed concerns about the

AES-PASS program, which allows exporters to file most of their export

information postdeparture, but still requires companies to file some data

prior to departure. Specifically, they have stated that AES-PASS will be costly

and burdensome to exporters without providing much benefit to the

government. For example, in a March 1997 letter to the Commissioner of

Customs, a group of large exporters stated that AES-PASS requires exporters

to bear a predeparture reporting burden for all shipments while doing

“nothing to improve data collection or compliance.” They stated that

AES-PASS would require two submissions for a single shipment—both preand post-departure—resulting in additional programming of automated

processes. In June 1997, the Trade Resource Group, the private advisory

group to Customs on AES, expressed similar concerns in a letter to the

Commissioner of Customs.

In response to the export community’s continued dissatisfaction with AES

requirements (particularly filing information predeparture via AES and/or

AES-PASS), in June 1997 the Commissioner of Customs proposed that

industry groups enter into formal negotiations with Customs to resolve

issues of disagreement regarding AES. Customs has used such negotiations,

which rely on an outside moderator, to resolve issues with the trade

community in the past. According to Customs officials, this approach will

provide a forum for the trade community and Customs to discuss, and

potentially resolve, the outstanding issues of concern to both parties.

Customs officials told us that they are uncertain as to when the

negotiations will begin.

AES’ Ability to Enhance

Enforcement Is Currently

Limited

AES is designed to provide a “smart targeting system” that would allow

inspectors to focus their attention on possible illegal shipments among the

thousands of exports leaving the country each day. For example, AES is

designed to compile exporter histories, allow for trend analysis, and

provide a prioritized list of targets for selective enforcement actions.12

However, AES’ ability to meet this objective is limited by four major

factors. First, AES does not currently link with other law enforcement

databases, such as those maintained by the Treasury; the Federal Bureau

of Investigation; and the National Insurance Crime Bureau (which

12Currently, inspectors only receive general information on the exports in paper documents provided

by the carrier. (Because SEDs are held by the carrier and not Customs inspectors, if an inspector

wants to review an SED, he usually must request that the carrier fax it to the Customs port.) In

addition to this information, inspectors also target shipments based on information provided from

informants and other law enforcement agencies, and their own “gut instinct” based on years of

experience.

Page 14 GAO/NSIAD-98-5 Automated Export System
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maintains a database on stolen vehicles). Customs inspectors told us that

AES would be a more effective enforcement tool if it linked with these

databases, allowing inspectors to obtain information more quickly on

exporters with prior export violations or on stolen vehicles that may be

exported. Customs officials told us that they are considering trying to have

AES link with other enforcement databases in the future, but that at present

they have no definitive plans to do so. They noted that very few

enforcement or administrative databases are directly linked to each other

because of logistics, funding, and security concerns.

Second, AES-PASS will not provide adequate information to target shipments

because it only requires a minimal amount of data prior to departure—the

exporter identification number; a reference number for the shipment; and

a few additional data elements, such as the license code and number if the

export requires a license. It will not provide the detailed commodity data

that inspectors told us they need for better enforcement. Because so little

predeparture information is provided on AES-PASS, some inspectors we

interviewed were concerned that AES-PASS would undermine any advantage

that AES would have provided, for example, ready access to more detailed

commodity data predeparture.

Third, AES allows SED information to be transmitted only hours before a

shipment’s departure (as with the current paper system), and inspectors

told us that in most cases this is not sufficient time for targeting possible

illegal shipments. While some inspectors told us that they would need SED

information about 4 hours in advance of the carrier’s departure in order to

target shipments, others said they would need 24 hours. (We did not

evaluate the feasibility of companies being able to file data within these

time frames.) Finally, since participation in AES is voluntary, an illegal

exporter is unlikely to use the system for filing export data. Inspectors at

several ports told us that there is no incentive for exporters to get on AES,

and others stated that they believe AES would need to be mandatory to be

effective.

Most Other Agencies’

Export Requirements

Cannot Be Fully Satisfied

by AES

According to both Census and Customs, AES has the potential to provide

exporters with “one-stop shopping” by creating a single electronic filing

center for all U.S. export data. AES was not designed to replace any

agency’s authority to regulate exports. The system was designed to serve

as a source of export data for agencies with export requirements and to

reduce redundancies in filing and paperwork associated with various

export control requirements. However, AES is unlikely to achieve those

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objectives because most agencies’ export requirements cannot be fully

satisfied through AES. For example, 8 of the 13 agencies13 identified by

Customs as having regulatory authority over exports14 are not using AES to

fulfill their export licensing or permit requirements because of existing

regulations that require them to retain their own licensing procedures,

including collecting information provided by the exporter. As a result,

exporters will have to continue to apply to multiple agencies for approval

to export certain commodities. (About 30 percent of all U.S. freight

forwarders export goods that require export licenses.) For example,

exporters seeking to ship products that have both civilian and military

applications would still have to apply directly to the Commerce

Department’s Bureau of Export Administration for approval. In addition,

exporters of chemicals and pharmaceutical drugs are required to apply

directly to the Drug Enforcement Administration (DEA) 15 days prior to

exportation in order for DEA to conduct an investigation.

Although AES is designed to eliminate the paper SED, it will not

substantially reduce or eliminate agency paperwork or the electronic filing

associated with the issuance of export licenses, certificates, or permits.

For example, the Department of Agriculture’s Food Safety and Inspection

Service issues inspection certificates for agricultural exports that must

accompany the shipment abroad, precluding the possibility of electronic

filing through AES. In addition, DEA officials noted that they are governed

by international conventions, to which the United States is a signatory,

that mandate their use of internationally standardized paper licenses for

exports of certain chemicals and pharmaceutical products.

According to Customs officials, there are several obstacles that prevent

them from quickly achieving this goal. For example, many agencies lack

sufficient staff or budgetary resources, have outdated regulations that may

need to be changed, and/or are reluctant to share data with other agencies

even though they may collect the same data. Customs recognizes that

these obstacles will need to be overcome in order to have AES fully

interface with other export-related agencies.

Despite these limitations, officials at three agencies with export reporting

(rather than licensing) requirements—Census, the Maritime

13For two other agencies, other factors preclude their full use of AES: the Department of Energy’s

Office of Nonproliferation and National Security has export license review functions that will not be

fully satisfied though AES; and the Environmental Protection Agency cannot use AES for other

reasons (see p. 21).

14In 1994, Customs established a group, consisting of 13 U.S. government agencies, to determine each

agency’s procedures for regulating exports and the information each agency collects from the export

community to fulfill its statutory and regulatory requirements.

Page 16 GAO/NSIAD-98-5 Automated Export System
B-278136 

Administration, and the Energy Information Administration—indicate that

AES has the potential to satisfy their needs. Specifically, it is expected to

eliminate their paperwork processing and help them fulfill their reporting

requirements. Several other agencies, including the Bureau of Export

Administration, the Office of Foreign Assets Control, and the Office of

Arms Control and Nonproliferation indicated that as designed, AES would

provide a more efficient means to track and monitor cargo shipments

against approved licenses. Currently, AES validates cargo against State

Department and Bureau of Export Administration licenses.

Slow Progress in Developing

Interfaces With Other Agencies

Since 1994, Customs has tried to develop an automated interface with

other government agencies to maximize opportunities to share export

information through AES and streamline data collection. After Customs

determines the feasibility of working with a particular agency, Customs

seeks to (1) reach commitments to collaborate on their use of AES,

(2) define and incorporate the informational requirements of these

prospective users, and (3) conclude the process with a memorandum of

understanding (MOU) that guides the implementation of the final interface.

Currently, only Census has signed an MOU with Customs legally stipulating

each agency’s responsibility for collecting, transmitting, and securing data

captured in AES, in addition to cost-sharing arrangements. Customs has

obtained written commitments from five other agencies to collaborate on

AES. Some of the areas being discussed are data to be included in AES,

information sharing and access, and the development of compatible

information systems.15 Of these six agencies, Customs has completed and

incorporated into AES the user requirements of Census, the Bureau of

Export Administration, and the Office of Defense Trade Controls,

specifying each agency’s requirements for collecting and processing data.

One reason that progress has been slow is that Customs has assigned only

one full-time person to develop interfaces with other government

agencies.

Other agencies have not committed to use AES for a variety of reasons. For

example, according to officials at the Bureau of Alcohol, Tobacco, and

Firearms, the agency lacks sufficient resources to develop a compatible

automated system, and DEA has regulations that preclude its use of AES.

Officials at the Environmental Protection Agency told us that they cannot

use AES, as they do not currently have an agreement with Census to access

SED data. Furthermore, although AES does include Nuclear Regulatory

15None of the agencies that issue licenses, certificates, or permits have agreed to transfer their license

application data through AES.

Page 17 GAO/NSIAD-98-5 Automated Export System
B-278136 

Commission license codes in order to validate licensed shipments, agency

officials indicated that the agency already has an automated information

system that meets its needs. (See fig. 5.)

Figure 5: Status of Customs’ Agreements With Export-Related Agencies

Agencies Signed commitments to 

collaborate on AES

User requirements 

incorporated into AES

Signed memorandum of 

understanding to 

implement system 

interface

Bureau of Alcohol, Tobacco 

and Firearms

Bureau of Export 

Administration

Bureau of the Census

Defense Security Assistance 

Agency

Drug Enforcement 

Administration

Energy Information 

Administration

Environmental Protection 

Agency

Food Safety and Inspection 

Service

Maritime Administration 

Office of Nonproliferation and 

National Security

Nuclear Regulatory 

Commission

Office of Defense Trade 

Controls

Office of Foreign Assets 

Control

It has been well documented that successful information systems require

the continuing involvement and commitment of senior executives.16 In this

case, where the concept of AES entails integrating the export reporting

functions of 14 separate federal agencies, extensive high-level

coordination and exchange are not presently in place to explicitly define

what export reporting and/or licensing requirements can or cannot be

16See Executive Guide: Improving Mission Performance Through Strategic Information Management

and Technology (GAO/AIMD-94-115, May 1994).

Page 18 GAO/NSIAD-98-5 Automated Export System
B-278136 

accommodated by AES and what distinct licensing and/or reporting

requirements must remain.

Conclusions The quality of export data has been a long-term problem. AES represents a

major initiative to improve the quality of export data that is used to

negotiate trade agreements and enforce export laws and regulations.

While the trade community believes export data needs to be automated,

the reluctance of U.S. companies to participate and the uncertainty that

other agencies will be able to interface with AES raise serious questions

about the system’s viability. In addition, Customs’ planned use of AES as an

enforcement tool is limited because AES is not currently linked to other law

enforcement databases, and AES-PASS allows approved exporters to file

almost all of their export data post-departure. We question whether AES

will be able to meet its objectives without greater involvement of top

management in resolving the operational and implementation problems

we have identified. We believe the Commissioner of the U.S. Customs

Service and the Director of the U.S. Census Bureau need to devote

sustained management attention to AES. Specifically, these officials need to

expeditiously assess the extent to which the export community’s concerns

can be addressed, the likely amount of participation in AES, the likely

usefulness of AES in enhancing enforcement, and the extent to which other

agencies will be able to use AES. In making this assessment, attention

needs to be given to determining whether

• predeparture filing of export data is critical to improved export statistics

and enforcement of U.S. laws and regulations and, if so, how far in

advance inspectors need the information for AES to be an effective

enforcement tool;

• a link between AES and the databases of law enforcement agencies can be

achieved;

• allowing some exporters to file SEDs after departure would undermine the

objective of achieving improved export data and/or render AES ineffective

as an enforcement tool; and

• the requirements of other agencies can be modified or otherwise

accommodated to permit their use of AES.

Once this assessment is done, we believe the agencies need to consider

how or whether to proceed with implementing AES. If these problems are

not resolved in the near future, we are concerned that Customs will

continue to invest significant monies in a system that is likely to be of

limited benefit.

Page 19 GAO/NSIAD-98-5 Automated Export System
B-278136 

Recommendations We recommend that the Secretaries of the Treasury and of Commerce

direct the Commissioner of the U.S. Customs Service and the Director of

the Bureau of the Census to delineate the concrete actions needed to

improve AES’ potential, and, after doing so, assess the costs and benefits of

continuing to implement AES.

Agency Comments A draft of this report was provided to Customs and Census. While Customs

agreed that AES should interface with other enforcement and export data

bases and that AES-PASS should be reevaluated in light of its potential

adverse effect on enforcement efforts, both agencies said that they

believed our assessment of the level of participation in AES was premature.

They said that early in the system’s development, they decided to use a

phased implementation approach. They also noted that participation in AES

has increased since it was expanded to all modes of transportation in

July 1997 and they expect participation to be greater in the future.

However, they did not address our recommendation or specify the actions

they plan to take to overcome obstacles to AES’ success.

We disagree with Census and Customs view that our assessment of AES is

premature. We believe our work provides important insights into issues

that will affect AES’ success and that Customs and Census need to develop

a strategy to address these issues. On the critical issue of participation, our

survey revealed strong resistance among the export community that has

serious implications for future participation. Unless AES achieves high

participation and provides an interface among agencies with enforcement

and export responsibilities, it is difficult to envision how the system can

meet its objectives. We, therefore, continue to believe that Customs and

Census should identify the specific actions needed to improve AES’

potential, and, after doing so, assess the cost and benefits of continuing to

implement AES.

Census also expressed concern that the results from our surveys and

interviews were not presented in such a way that the reader can determine

the significance of the responses and that our work does not reflect the

views of the entire export trade community. We used a variety of

techniques to obtain the export community’s views regarding AES,

including a nationally representative sample survey of 400 ocean freight

forwarders. Our survey was necessarily limited to ocean freight

forwarders because AES had not been extended to other modes of

transportation. We believe that the results from this survey when

combined with those from our survey of the top 80 exporters that file

Page 20 GAO/NSIAD-98-5 Automated Export System
B-278136 

paper SEDs, as well as in-depth interviews with 30 exporting companies

and 14 of the top AERP filers, provides a reasonable basis on which to

assess the views of a broad cross section of the export community

regarding AES. We did not suggest that our assessment was based on a

survey of the entire export community. Moreover, Census did not offer any

studies that produced results that were inconsistent with what we found.

(See app. IV for specific details on our scope and methodology.)

As agreed with your office, unless you publically announce the contents

earlier, we plan no further distribution of this report until 2 days after its

issue date. At that time, we will provide copies of the report to appropriate

congressional committees and the Commissioner of the U.S. Customs

Service and the Director of the Bureau of the Census. We will also make

copies available to other interested parties on request.

This review was done under the direction of JayEtta Z. Hecker, Associate

Director. If you or your staff have any questions concerning this report,

please contact Ms. Hecker at (202) 512-8984. Major contributors to this

report are listed in appendix VII.

Sincerely yours,

Benjamin F. Nelson,

Director, International Relations

 and Trade Issues

Page 21 GAO/NSIAD-98-5 Automated Export System
Contents

Letter 1

Appendix I 

Six Other Countries’

Export Data

Collection Systems

24

Appendix II 

The Automated

Export System

Process

29

Appendix III 

Results of Freight

Forwarder and

Exporter Surveys

31

Appendix IV 

Objectives, Scope,

and Methodology

62

Appendix V 

Comments From the

Department of

Commerce

66

Appendix VI 

Comments From the

U.S. Customs Service

73

Page 22 GAO/NSIAD-98-5 Automated Export System
Contents

Appendix VII 

Major Contributors to

This Report

81

Table Table I.1: Characteristics of Six Countries’ Export Data

Collection Systems

26

Figures Figure 1: Freight Forwarders’ Plans Regarding AES 9

Figure 2: Exporters’ Plans Regarding AES 10

Figure 3: Freight Forwarders’ and Exporters’ Status of

Involvement With AES

11

Figure 4: Freight Forwarders’ and Exporters’ Knowledge of AES 12

Figure 5: Status of Customs’ Agreements With Export-Related

Agencies

18

Figure II.1: The AES Process 30

Abbreviations

ABI Automated Broker Interface

AERP Automated Export Reporting Program

AES Automated Export System

AES-PASS Automated Export System Post-Departure Authorized

Special System

DEA Drug Enforcement Administration

FOB free on board

IOU “I owe you”

MOU memorandum of understanding

NVOCC Non-Vessel Operating Common Carrier

SED Shipper’s Export Declaration

Page 23 GAO/NSIAD-98-5 Automated Export System
Appendix I 

Six Other Countries’ Export Data Collection

Systems

We obtained information from officials in six countries—Australia,

Canada, Japan, South Korea, Mexico, and the United Kingdom—on their

export procedures and systems for collecting export data. (The

information we collected from these countries was self-reported by these

countries—we did not independently verify any information we obtained.)

Almost all of these countries reporting having implemented automated

systems for collecting export data, and most countries reported that nearly

100 percent of their export data is collected via their automated systems.

Most countries’ automated systems are voluntary and were automated

within the last 5 years. These countries require that at least some export

information be filed prior to departure. Further, almost all of the countries

use their automated system in some way as a targeting tool to help with

the control and enforcement of the countries’ export laws.

Five of the six countries from which we obtained information have

implemented an automated system to collect their export data (Australia,

Japan, South Korea, Mexico, and the United Kingdom); Canada is

currently piloting an automated system to collect export data (see 

table I.1). With the exception of Mexico,1

 all countries’ automated systems

are voluntary (including Canada’s new system). As an alternative to

electronic filing, exporters in Australia, Canada, Japan, and the United

Kingdom can file paper export declarations. Most of these countries’

automated systems were implemented in the 1990s, although Australia and

Japan have had at least a partially automated system in place since the

mid- to late-1980s.

Most countries require that exporters or their agents file at least some

information prior to departure. Japan requires that all export data be

submitted prior to departure. Australia, Canada, South Korea, Mexico, and

the United Kingdom, however, allow approved exporters to wait to file

some of their information after departure. Australia requires that approved

exporters file an export report as soon as the information is available;

Canada requires that exporters file a report up to 5 days after the month of

departure; South Korea requires that a report be filed within a day of

departure; Mexico generally requires that a report be filed within a week

of departure; and the United Kingdom requires exporters to file a

completed report within 14 days of departure.

All of the countries, with the exception of the United Kingdom, use their

automated system to help control exports and target goods for inspection

1

Mexico requires that exporters use agents, called Customs brokers, to file export data on exporters’

behalf. The Customs brokers must submit all export data electronically.

Page 24 GAO/NSIAD-98-5 Automated Export System
Appendix I 

Six Other Countries’ Export Data Collection

Systems

(Canada plans to use its system for this purpose). Some countries, such as

South Korea and Japan, use pre-set criteria for targeting goods for

inspection. Mexico’s automated system, on the other hand, randomly

selects shipments for inspection.

Page 25 GAO/NSIAD-98-5 Automated Export System
Appendix I 

Six Other Countries’ Export Data Collection

Systems

Table I.1: Characteristics of Six Countries’ Export Data Collection Systems

Characteristics Australia Canada Japan

Method of data collection (paper

or automated system)

Paper and voluntary automated

system

Paper and currently piloting

voluntary automated system

Paper and voluntary automated

system

Year of automation 1988 Not available Air cargo: 1985; sea cargo:

1992

Percent of export data captured

via system or percent of export

community using automated

system

98 percent Not available Over 90 percent

Time frame for data filing Predeparture, with optional

post-departure filing for

approved exporters (this option

generally open only to certain

bulk and agricultural shippers,

but requires some information

be filed predeparture)

(1) Paper: air, truck, rail - 

predeparture; ocean - pre- and

post-departure; 

(2) Automated system:

predeparture, with optional

post-departure filing for

approved exporters

Predeparture

Required export information a b c

Use of automated system for

targeting

Yes, system used to monitor

exporters’ compliance and as

targeting tool

Yes, system’s plans include

targeting shipments for

examination

Yes, system used to help

select goods that should be

examined or inspected

Deadline for goods to be at port No Customs requirement for

goods

None None

Annual value of exports (1995-96)

$59 billion

(1996) 

$202 billion

(1995)

$443 billion

Page 26 GAO/NSIAD-98-5 Automated Export System
Appendix I 

Six Other Countries’ Export Data Collection

Systems

Characteristics South Korea Mexico United Kingdom

Method of data collection (paper

or automated system)

Voluntary automated system Mandated automated system Paper and voluntary automated

system

Year of automation 1996 1992-93 1992

Percent of export data captured

via system or percent of export

community using automated

system

Almost 100 percent (export

community participation level)

100 percent 20 percent

Time frame for data filing Predeparture, with optional

post-departure reporting for

bulk cargo and perishable

goods (requires some

information be provided prior

to departure)

Predeparture, with optional

post-departure filing program

(requires that invoice

information still be presented

upon export)

Predeparture, with optional

post-departure filing for

approved exporters (this option

is open to both paper and

electronic filers but requires

some information be filed

predeparture)

Required export information d e f

Use of automated system for

targeting?

Yes, system designed for

targeting; improvements being

made to targeting ability

Yes, system randomly selects

shipments for inspection, as

well as inspectors to examine

shipments

No

Deadline for goods to be at port Goods required at warehouse

24 hrs. before loading

Shipments must arrive to

Customs within 24 hours after

automated system validates

transaction

Deadlines set locally at

Customs ports

Annual value of exports (1996)

$130 billion

(1996)

$96 billion

(1996)

$113 billion g

(Table notes on next page)

Page 27 GAO/NSIAD-98-5 Automated Export System
Appendix I 

Six Other Countries’ Export Data Collection

Systems

a(Australia) Reference number; type of export, establishment code; owner’s name; owner’s phone

number; consignee’s name; consignee’s city; country of destination; port of loading; port of

discharge; invoice currency; total free-on-board (FOB) value; intended date of export; number of

F.C.L. containers, if applicable; mode of export; ship/aircraft identity; number of packages;

commodity classification code; origin code; goods description; net quantity; gross weight;

container type; coal, thermal use indicator; assay details; container number and seal number, if

applicable; permit details, including permit number and encryption code; information on whether

goods are subject to certain export concession arrangements, FOB value; and signature.

b(Canada) Information required for paper filing generally includes exporter name and address;

consignee name and address; exporter’s business number; country of final destination; province

and country of origin of goods; export permit number; description of goods; harmonized tariff

system code of goods; quantity and unit of measure; value; signature of responsible party; mode

of transportation; and reason for export. Goods exported by sea can be reported in a

predeparture interim report that must include the following information: exporter name, address,

and business number; consignee name and address; country/province of origin of goods, country

of final destination; number of packages; description of goods; and, if containerized, container

number.

c(Japan) User code; exporter code, name, and address; trading pattern code; airway bill or bill of

lading number; description, number, quantity, value, and statistical code numbers of goods;

destination and its code number; loading and storage place code; airline code, or name and

nationality of vessel; and scheduled departure date.

d(South Korea) Forty-four items, including declarant; manufacturer; exporter name; buyer;

value/quantity of goods; destination; consignee; letter of credit number; and weight.

e(Mexico) Sixty-two data items, including information on the exporting company and its location;

goods’ quantity, value, and classification; transport company name and location; and data of the

foreign trade transaction. Invoice information that must be provided upon export in paper form

must contain the name of the exporting company; taxpayer identification number; date and

number of the invoice; a general description, quantity, and value of the goods; information on the

vehicle transporting the merchandise; number of the consolidated entry; name and signature; and

number and license of the Customs broker.

f

(United Kingdom) Filing requirements depend on the procedure being used, but a completed

declaration via the automated system generally includes consignor/exporter; number of items

declared; total packages; reference number; name and address of person or company making

the declaration; code for country of ultimate destination; information on shipment container, if

appropriate; identify and nationality of active means of transport crossing the border; mode of

transport at the border; place of loading; location of goods; packages and description of goods,

including marks and numbers, container numbers, and number and kind of goods; item number;

tariff classification commodity code; net weight; any additional information, documents produced,

certificates and authorizations; and value of goods. Participants in the U.K. automated system

post-departure filing program generally must file the following information predeparture: name

and address of exporter or agent; brief commercial description of goods; number and kind of

packages/goods; marks and numbers on packages; net weight; and any additional information,

documents produced, certificates, and authorizations.

gExcludes exports to other members of the European Community.

Source: Data provided by Australia, Canada, Japan, South Korea, Mexico, and the United

Kingdom.

Page 28 GAO/NSIAD-98-5 Automated Export System
Appendix II 

The Automated Export System Process

As currently implemented, the Automated Export System (AES) allows

exporters or their agents to electronically transmit Shipper’s Export

Declaration (SED) information directly to Customs. The process begins

when either the exporter or agent transmits commodity data directly into

AES or when the carrier transmits a receipt of goods message. (AES

participants can transmit their commodity data either by developing their

own software, using software from various AES-certified software vendors,

via the Internet, or using facilities of a port authority or service center.) If

the carrier transmits data via AES before the exporter, an “I owe you” (IOU)

is established noting that the exporter has not yet transmitted commodity

data. The commodity data passes through built-in edits that check for

accurate and complete information and match it against U.S. agency

requirement files. The system also matches commodity data sent by the

exporter with transportation data (such as the name and flag of the vessel)

sent by the carrier. The carrier is free to load the cargo unless it receives a

“hold” message. AES will reject the shipment if core information, such as

the commodity code, country name, or exporter name is invalid or

incomplete. These “fatal errors” must be corrected before merchandise is

exported. (See fig. II.1.)

Page 29 GAO/NSIAD-98-5 Automated Export System
Appendix II 

The Automated Export System Process

Figure II.1: The AES Process

Exporter/agent transmits

predeparture commodity

data to AES

Carrier transmits receipt

of goods message and

an IOU is established 

for exporter data

If error, 

message

sent to

carrier

If error, 

message

sent to

exporter

AES sends status notification

to exporter/agent and carrier

Exporter/agent transmits post-departure

data elements to AES; carrier transmits

outbound manifest within 4 days of departure

"OK to load" message

is optional

Shipment departs and

carrier sends 

departure message

If carrier does not receive

"hold" message, goods

can be exported

AES screens data for validity and completeness and 

checks against U.S. agency requirements

U . S . C U S T O M S S E R V I C E

TREASU RY

U . S . C U S T O M S S E R V I C E

TREASU RY

U . S . C U S T O M S S E R V I C E

TREASURY

or

AES matches commodity

data with transportation data

AES will reject the shipment if core 

information is invalid or incomplete. 

These errors are "fatal." Fatal errors must 

be corrected before merchandise is 

exported. AES will also generate warning

messages that will not reject the shipment, 

but warnings must be corrected within 

4 days after departure.

Source: U.S. Customs Service.

Page 30 GAO/NSIAD-98-5 Automated Export System
Appendix III 

Results of Freight Forwarder and Exporter

Surveys

Provided in the following section are questions and responses for our

surveys of 400 U.S. freight forwarders and Non-Vessel Operating Common

Carriers (NVOCC) and 80 U.S. exporting companies that file paper SEDs. All

results are reported as percentages, and for each question, we present the

number of respondents answering the question. (Certain questions were

only to be answered by a subset of respondents, that is, those possessing a

certain characteristic or giving a particular answer to a previous question.)

For questions requesting a numerical answer (such as the number of

employees) we present descriptive statistics, such as the median and the

range of responses. In addition, for several questions where we report in

the letter on the subset of respondents who plan to use AES, we provide

results both for this subset group and for all respondents.

Page 31 GAO/NSIAD-98-5 Automated Export System
Appendix III 

Results of Freight Forwarder and Exporter

Surveys

GAO

Computer-Assisted Telephone Interview System

Automated Export System

Survey of Freight Forwarders

Introduction

Hello, this is [STATE YOUR NAME], calling from the U.S. General Accounting

Office. Senator Orrin Hatch, Chairman of the Senate Judiciary Committee, has

asked us to obtain the views of the export community regarding the Customs

Service's new Automated Export System, AES, and to collect information on

company export practices which may be affected by AES.

Your company has been chosen as part of a nationally representative sample of

freight forwarders and NVOCCs for this study. The survey should take about 5

to 10 minutes of your time. We will need to speak with the individual in your

company most familiar with your company's current and future export

documentation procedures for the survey.

Confirmation of Sample Eligibility

We need some basic company background information in order to describe the

kinds of companies we talked with in our survey report for the Congress. So,

before we discuss AES, I'd like to ask some questions about the levels and

kinds of export activities your company engages in and the approximate size of

your company.

1. At any time from the beginning of 1996 through the present, did your

company provide freight forwarding services to companies exporting

products from the U.S.?

Yes 91.21

No 8.8

 

1

All results are reported as percentages.

Page 32 GAO/NSIAD-98-5 Automated Export System
Appendix III 

Results of Freight Forwarder and Exporter

Surveys

N2 = 329

2. At any time from the beginning of 1996 through the present, did your

company also provide Non-Vessel Operating Common Carrier (NVOCC)

services to companies exporting products from the United States?

Yes 64.3

No 35.7

N = 328

All respondents who answered "No" to Q.1 must answer "Yes" to Q.2 to proceed

with the survey. Those who answered "No" to both questions 1 and 2 were

routed out of the survey and do not appear anywhere in this report.) 

3. About what percentage of your company's export business, if any, would

you say currently involves goods exported to Canada? Your best

estimate will suffice.

 MEDIAN3

 0

 RANGE (Minimum and Maximum) 0 - 100

INTERQUARTILE RANGE4 1

Don't know 0

N = 329

Company Activities and Characteristics

4. In addition to exporting products by sea, does your company also

provide services to clients exporting by air?

 

2

Number of companies responding to the question.

3

The median is the middle measurement when the items are arranged in order of size, or

if there is no middle one, then the average of the two middle ones. If five students make

the grades of 15, 75, 80, 95 and 100, the median is 80.

4

The interquartile range is the distance between the first and third quartiles of a

distribution. It covers the middle half of the values in the frequency distribution. 

Page 33 GAO/NSIAD-98-5 Automated Export System
Appendix III 

Results of Freight Forwarder and Exporter

Surveys

Yes 84.5

No 15.5

N = 328

Company Size and Composition

5. I'd also like some information about the size of your company. About

how many employees (full-time equivalents) does your company have? 

Your best estimate will suffice.

MEDIAN 6

RANGE 1 - 60,000

INTERQUARTILE RANGE 12

SUM 86,879

Don't know 1.2

N = 329

6. And approximately what would you say your company's gross revenues

(or sales) were for 1996? Your best estimate will suffice.

MEDIAN $1.25 million

RANGE 7,000 - 1.8 billion

INTERQUARTILE RANGE 4.5 million

SUM 4.64 billion

Don't know 35.0

N = 329

7. About what percentage of your company's total business is involved in

the EXPORT trade?

MEDIAN 80

RANGE 0 - 100

INTERQUARTILE RANGE 55

Don't know 0.9

Page 34 GAO/NSIAD-98-5 Automated Export System
Appendix III 

Results of Freight Forwarder and Exporter

Surveys

N = 329

8. About how many companies (clients) did your company provide export

services for during 1996?

MEDIAN 50

RANGE 1 - 50,000

INTERQUARTILE RANGE 130

SUM 132,033

Don't know 14.9

N = 329

1Ag Since the beginning of 1996, did your company export goods that

required an export license?

Yes 30.75

No 69.3

N = 329

2Ag Aside from export license and Census Bureau and Customs Service

paperwork, did any of your exported goods involve reporting

requirements to any other federal agencies since the beginning of 1996?

Yes 19.6

No 80.4 (GO TO Q. Ins)

N = 326

3Ag Which agencies had reporting requirements?

Agriculture Department 42.2

State Department 25.0

Commerce Department 14.1

Nuclear Regulatory Commission 0

 

5

The confidence interval width for question 1-Ag is + 5.1 percent.

Page 35 GAO/NSIAD-98-5 Automated Export System
Appendix III 

Results of Freight Forwarder and Exporter

Surveys

Other (List below) 67.2

N = 64

Ins During the last 3 years, that is, since 1994, were any of your export

shipments inspected by the Customs Service?

Yes 49.5

No 50.5

N = 327

Im1 Does your company also act as import broker for companies importing

products into the United States?

Yes 35.9

No 64.1 (GO TO Q.9)

N = 329

Im2 Does your company use the Customs Service's Automated Broker

Interface (ABI) system to submit your import data?

Yes 84.7

No 13.6

Don't know 1.7

N = 118

AUTOMATED EXPORT SYSTEM (AES)

9. The Customs Service is now implementing the Automated Export System

(AES) to collect and process data for all parties involved in export trade. 

Have you ever heard of this system?

Yes 75.16

No 24.9 (GO TO Q. 22)

 

6

The confidence interval width for question 9 is + 4.8 percent.

Page 36 GAO/NSIAD-98-5 Automated Export System
Appendix III 

Results of Freight Forwarder and Exporter

Surveys

N = 329

All respondents saying that they had not heard of AES and those expressing a

desire for more information about AES were given Customs contact

information.

11. Has anyone from the Customs Service or any other federal agency

contacted your company regarding AES?

Yes 26.7

No 73.3

N = 247

12. I'd like to know your company's plans, if any, regarding AES. Does your 

company plan to use AES to submit your required export data?

Yes 47.67

No 18.7 (GO TO Q. 21)

Company hasn't decided 24.8

Don't know 8.9 (GO TO Q. 14)

N = 246

13. How would you describe the status of your company's involvement with 

AES?

All Eligible Respondents

Are you currently:

Studying AES 53.98

Planning to file a letter of intent with Customs 10.1

 

7

The confidence interval widths for question 12 were the following: + 6.4 percent (yes); +

5.0 percent (no); + 5.5 percent (company hasn't decided); and + 3.6 percent (don't know).

8

The confidence interval widths for question 13 were the following: + 7.5 percent

(studying AES); + 4.5 percent (planning to file a letter of intent with Customs); + 2.2

percent (have filed a letter of intent with Customs); and + 1.2 percent (currently testing

AES), + 6.4 percent (other), and + 4.4 percent (can't say/don't know).

Page 37 GAO/NSIAD-98-5 Automated Export System
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Have filed a letter of intent with Customs 2.2

Currently testing AES 0.6

Other (Specify) 23.6

Can't say/Don't know 9.6

N = 178

Those That Plan to Use AES

Studying AES 53.8

Planning to file a letter of intent with Customs 14.5

Have filed a letter of intent with Customs 3.4

Currently testing AES 0.9

Other (Specify) 19.7

Can't say/Don't know 7.7

N = 117

14. What incentives, if any, do you see for going on AES?

 (DO NOT read list. Click all that respondent volunteers)

All Eligible Respondents

None 21.0 (GO TO Q. 15)

One-stop filing 15.5

Cost savings for company 9.0

Convenience of automation 45.5

Better trade statistics 7.5

Other (Specify) 40.0

N = 200

Those That Plan to Use AES

None 17.1 (GO TO Q. 15)

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Surveys

One-stop filing 19.7

Cost savings for company 9.4

Convenience of automation 45.3

Better trade statistics 11.1

Other (Specify) 46.2

N = 117

15. I'd like your views about incentives for using AES mentioned by others. 

Do you view [ASK FOR EACH LISTED BELOW] as an incentive for your

company to go on AES or not? (Each item was asked of respondents

NOT volunteering the item in Q. 14. Results displayed include those who

volunteered the item in question 14.)

A. One-stop filing

Volunteered 15.59

Yes 55.5

No 12.5

Don't know 16.5

N = 200

B. Cost savings for company

Volunteered 9.010

Yes 43.5

No 26.0

Don't know 21.5

N = 200

 

9

The confidence interval widths for question 15A were the following: + 5.1 percent (yes);

+ 7.0 percent (no); + 4.7 percent (company hasn't decided); and + 5.2 percent (don't

know).

10The confidence interval widths for question 15B were the following: + 4.0 percent (yes);

+ 7.0 percent (no); + 6.2 percent (company hasn't decided); and + 5.8 percent (don't

know).

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C. Convenience of automation

Volunteered 45.011

Yes 43.0

No 5.5

Don't know 6.5

N = 200

D. Better trade statistics

Volunteered 7.512

Yes 56.8

No 22.6

Don't know 13.1

N= 200

16. About how much would you estimate it would cost your company to

implement AES, if you chose to do so? (Asked of those planning to use

AES or whose companies had not yet decided whether to use AES.)

All Eligible Respondents Those That Plan to Use AES

MEDIAN $6,500 MEDIAN $7,500

RANGE 200 - 500,000 RANGE 200- 90,000

INTERQUARTILE INTERQUARTILE

RANGE 11,500 RANGE 16,000

Don't know 67.0 Don't know 66.4

N = 178 N= 117

 

11The confidence interval widths for question 15C were the following: + 7.0 percent (yes);

+ 7.0 percent (no); + 3.2 percent (company hasn't decided); and + 3.5 percent (don't

know).

12The confidence interval widths for question 15D were the following: + 3.7 percent (yes);

+ 7.0 percent (no); + 5.9 percent (company hasn't decided); and + 4.8 percent (don't

know).

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Surveys

17. About when do you plan to start using AES? (Asked of those planning to

use AES.)13

Date Given: 7/97 - 1/2000 49.6

Don't know 50.4

N = 117

18. And about how long do you think it would take for your company to

implement AES? (Asked of those whose companies had not yet decided

whether to use AES.)

Range of Responses

MONTHS 1 - 6

YEARS 1 - 5

BY (DATE) 9/97 - Sometime in 1998

Don't know 52.5

N = 61

Automated Export System Post-Departure Authorized Special

System (AES-PASS)

19. Are you familiar with AES-PASS? (Asked of those planning to use AES or

whose companies had not yet decided whether to use AES.)

All Eligible Respondents Those That Plan to Use AES

 

13Two questions were asked about the timing of AES implementation: those planning to

use AES were asked to estimate a date (Q.17); those whose companies had not yet

decided whether to use AES were asked about how long it would take for their

companies to implement AES (Q.18).

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Surveys

Yes 15.314 Yes 17.9

No 84.7 (GO TO Q.22) No 82.1 (GO TO Q.22)

N = 177 N = 117

20. Is your company likely to apply for AES-PASS status? (Asked of those

who were familiar with AES-PASS and who plan to use AES or whose

companies had not yet decided whether to use AES.)

Yes 48.1 (GO TO Q.22)

No 51.9 (GO TO Q.22)

N = 27

21. Why does your company not plan to use AES?

 (DO NOT read list. Click all that respondent volunteers) (Asked of those

who say they will not use AES.)

Lack of knowledge about AES 10.9 (GO TO Q. 22)

______________________________________________

(Reasons spontaneously volunteered) 

Predeparture filing requirement 2.2

Cost of automation 28.3

Personnel cost 2.2

Company hardware or software incompatibility with AES 0

Concerns about the amount of information required by AES 0

Concerns about how the information will be used by Customs 0

Concerns about privacy protection of information 0

Other (Specify) 69.6 

N = 46

 

14The confidence interval width for question 19 (all eligible respondents) is + 5.4 percent.

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Surveys

I'd like your views about some concerns mentioned by others in using AES.

(Each item was asked of respondents who did not mention lack of knowledge

above and who did NOT volunteer the item in Q. 21. Results displayed include

those who volunteered the item in question 21 above.) 

21a Are you concerned or not about the predeparture SED filing requirement

of AES?

Volunteered 2.6

Yes 43.6

No 51.3

Don't know 2.6

N = 39

21b Are you concerned or not about the cost of automation necessary for

your company to get on AES?

Volunteered 33.3

Yes 30.8

No 28.2

Don't know 7.7

N = 39

21c Are you concerned or not about the amount of information required by

AES?

Volunteered 0

Yes 20.5

No 46.2

Don't know 33.3

N = 39

21d Are you concerned or not about how the information will be used by

Customs?

Volunteered 0

Yes 15.4

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Surveys

No 79.5

Don't know 5.1

N = 39

21e Are you concerned or not about privacy protection of information?

Volunteered 0

Yes 41.0

No 56.4

Don't know 2.6

N = 39

Shippers' Export Declaration (SED) Preparation and Filing

Next, we'd like to know how your company currently prepares some of its

export-related paperwork. There are a number of ways a company may prepare

and file the SED with the Census Bureau. I'd like to ask you about the methods

you used during the past year.

22. First, about what percentage of your export shipments required the filing

of an SED during 1996? Your best estimate will suffice.

MEDIAN 90

RANGE 0 - 100

INTERQUARTILE RANGE 28

Don't know 3.3

N = 329

23. Did your company submit all of the SEDs for those shipments to

Customs or did someone else also submit SEDs for those shipments?

We submitted all SEDs 86.2 (GO TO Q. 25)

Someone else submitted all or some of the SEDs 13.8

N = 326

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Surveys

24. About what percentage of the SEDs for your shipments did YOUR

company submit to Customs in 1996? (Results displayed include

respondents who answered "We submit all SEDs" to Q.23, scored as

submitting 100 percent.)

MEDIAN 100

RANGE 0 - 100

INTERQUARTILE RANGE 0

Don't know 0.6

N = 329

25. How did your company submit its SEDs during 1996: Using paper SEDs, 

the Automated Export Reporting Program (AERP), AES, or an

Internet-based company linked to AES? (click all that apply) (Results

displayed include only respondents who submit SEDs.)

Paper 96.9

AERP 3.1

AES 0.6

Internet 0

N = 318

For AERP Users Only:

26. The Census Bureau plans on phasing out the AERP system by the end of

1999. How does your company plan to submit its SEDs once the AERP

system is no longer available? (Click all that apply)

Company will use AES 50.0

Company will use an Internet service 0

No plans yet 30.0

Submit paper SEDs 10.0

Have the customer submit SEDs 0

Other (specify) 10.0

N = 10

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Surveys

For Paper SED Filers Only:

Business Computer Use

27. Does your company use a computer to manage any or all of its

export-related record keeping? (Results displayed exclude paper filers

who also file SEDs electronically.)

Yes 76.4

No 23.6

N = 305

And finally, we'd like to know about the filing of your export paperwork and

the timing of your export shipments.

28. How difficult, if at all, was it for your company last year (1996) to file its

paper SEDs with the carrier prior to departure of the goods?

(Read each response option and click one)

Of very great difficulty 4.6

Of great difficulty 6.2

Of moderate difficulty 11.4

Of some difficulty 16.6

Of little or no difficulty 61.2

N = 307

29. During the last year (1996), did your company deliver ANY SEDs to the

carrier following departure of the goods? Do not include any submitted

through AERP.

Yes 43.015

No 57.0

N = 307

 

15The confidence interval width for question 29 is + 5.7 percent.

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Surveys

30. About how many of your SEDs were delivered after departure of the

goods?

MEDIAN 10

RANGE 0 - 100

INTERQUARTILE RANGE 45

Don't know 4.6

N = 130

Ask All:

That concludes our interview. Thank you for your time and your cooperation. 

If there is any other aspect of AES you'd like to comment on, please feel free to

do so now.

Page 47 GAO/NSIAD-98-5 Automated Export System
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Surveys

GAO

Computer-Assisted Telephone Interview System

AES

Survey of Exporters

Introduction

This is [STATE YOUR NAME], of the U.S. General Accounting Office. Senator

Orrin Hatch, Chairman of the Senate Judiciary Committee, has asked us to

obtain the views of the export community regarding the Customs Service's new

Automated Export System, AES, and to collect information on company export

practices which may be affected by AES. 

Your company has been chosen as part of a study of exporters who have filed

export documentation with the Census Bureau in paper form. The survey

should take about 5 to 10 minutes of your time. We need to speak with the

individual in your company most familiar with your company's current and

future export documentation procedures for the survey. 

Company Activities and Characteristics

We need some basic company background information in order to describe the

kinds of companies we talked with in our survey report for the Congress. So,

before we discuss AES, I'd like to ask some questions about the kinds of export

activities your company engages in and the approximate size of your company.

1. First, we'd like to know how your company exports products. Does your

company export products by air?

Yes 76.2

No 23.8

N = 63

2. Does your company export products by sea?

Yes 77.8

No 22.2

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N = 63

3. Does your company export products by means other than air or sea,

such as truck or rail? 

Yes 76.2

No 23.8

N = 63

5. Next, I'd also like some information about the size of your company. 

About how many employees (full-time equivalents) does your company

have? Your best estimate will suffice.

MEDIAN 2,200

RANGE 6 - 647,000

INTERQUARTILE RANGE 7,205

SUM 1,610,598

Don't know 11.1

N = 63

6. And approximately what would you say your company's gross revenues

(or sales) were for 1996? Your best estimate will suffice.

MEDIAN $1.65 billion

RANGE 100,000 - 164 billion

INTERQUARTILE RANGE 7.6 billion

SUM 424 billion

Don't know 39.7

N = 63

7. About what percentage of your company's total business is involved in

the EXPORT trade?

MEDIAN 51

RANGE 1 - 100

INTERQUARTILE RANGE 40

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Don't know 20.6

N =63

1Ag Since the beginning of 1996, did your company export goods that

required an export license?

Yes 52.4

No 47.6

N = 63

2Ag Aside from export license and Census Bureau and Customs Service

paperwork, did any of your exported goods involve reporting

requirements to any other federal agencies since the beginning of 1996?

Yes 39.7

No 60.3 (GO TO Q. Ins)

N = 63

3Ag Which agencies had reporting requirements?

Agriculture Department 24.0

State Department 44.0

Commerce Department 36.0

Nuclear Regulatory Commission 0

Other (List below) 44.0

N = 25

Ins During the last 3 years, that is, since 1994, were any of your export

shipments inspected by the Customs Service?

Yes 46.8

No 53.2

N = 62

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Im1 Does your company also import products into the United States?

Yes 90.5

No 9.5 (GO TO Q.9)

N= 63

Im2 Does your company use the Customs Service's Automated Broker

Interface (ABI) system to submit import data?

Yes 31.6

No 42.1

Don't know 26.3

N = 57

AUTOMATED EXPORT SYSTEM

9. The Customs Service is now implementing the Automated Export System

(AES) to collect and process data for all parties involved in export trade. 

Have you ever heard of this system?

Yes 77.8

No 22.2 (GO TO Q. 22)

N = 63

All respondents saying that they had not heard of AES and those expressing a

desire for more information about AES were given Customs contact

information.

11. Has anyone from the Customs Service or any other federal agency

contacted your company regarding AES?

Yes 40.8

No 59.2

N = 49

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Surveys

12. I'd like to know your company's plans, if any, regarding AES. Does your 

company plan to use AES to submit your required export data?

Yes 40.8

No 22.4 (GO TO Q. 21)

Company hasn't decided 20.4

Don't know 16.3 (GO TO Q. 14)

N = 49

13. How would you describe the status of your company's involvement with 

AES?

All Eligible Respondents

Are you currently:

Studying AES 50.0

Planning to file a letter of intent with Customs 16.7

Have filed a letter of intent with Customs 3.3

Currently testing AES 0

Other (Specify) 23.3

Can't say/Don't know 6.7

N = 30

Those That Plan to Use AES

Are you currently:

Studying AES 45.0

Planning to file a letter of intent with Customs 20.0

Have filed a letter of intent with Customs 5.0

Currently testing AES 0

Other (Specify) 25.0

Can't say/Don't know 5.0

N = 20

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Surveys

14. What incentives, if any, do you see for going on AES?

 (DO NOT read list. Click all that respondent volunteers)

All Eligible Respondents

None 23.7 (GO TO Q. 15)

One-stop filing 18.4

Cost savings for company 7.9

Convenience of automation 55.3

Better trade statistics 0

Other (Specify) 36.8

N = 38

Those That Plan to Use AES

None 15.0 (GO TO Q. 15)

One-stop filing 15.0

Cost savings for company 5.0

Convenience of automation 55.0

Better trade statistics 0

Other (Specify) 40.0

N = 20

15. I'd like your views about incentives for using AES mentioned by others. 

Do you view [ASK FOR EACH LISTED BELOW] as an incentive for your

company to on go on AES or not? (Each item was asked of respondents

NOT volunteering the item in Q. 14. Results displayed include those who

volunteered the item in question 14.)

A. One-stop filing

Volunteered 18.4

Yes 42.1

No 18.4

Don't know 21.1

N = 38

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B. Cost savings for company

Volunteered 5.3

Yes 39.5

No 15.8

Don't know 39.5

N = 38

C. Convenience of automation

Volunteered 55.3

Yes 34.2

No 2.6

Don't know 7.9

N = 38

D. Better trade statistics

Volunteered 0

Yes 60.5

No 15.8

Don't know 23.7

N = 38

16. About how much would you estimate it would cost your company to

implement AES, if you chose to do so? (Asked of those planning to use

AES or whose companies had not yet decided whether to use AES.)

All Eligible Respondents Those That Plan to Use AES

MEDIAN $15,000 MEDIAN $57,500

RANGE 2,000 - 750,000 RANGE 2,500 - 750,000

INTERQUARTILE INTERQUARTILE

RANGE 95,000 RANGE 495,000

Don't know 70.0 Don't know 70.0

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N = 30 N= 20

17. About when do you plan to start using AES? (Asked of those planning to

use AES.)16

Date Given: 7/97 - 1/99 42.1

Don't know 57.9

N = 19

18. And about how long do you think it would take for your company to

implement AES? (Asked of those whose companies had not yet decided

whether to use AES.)

Range of Responses

MONTHS 1 - 11

YEARS 2

BY (DATE) ---

Don't know 60.0

N = 10

AES-PASS

19. Are you familiar with AES-PASS? (Asked of those planning to use AES or

whose companies had not yet decided whether to use AES.)

All Eligible Respondents Those That Plan to Use AES

Yes 36.7 Yes 40.0

 

16Two questions were asked about the timing of AES implementation: those planning to

use AES were asked to estimate a date (Q.17); those whose companies had not yet

decided whether to use AES were asked about how long it would take for their

companies to implement AES (Q.18).

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Surveys

No 63.3 (GO TO Q.22) No 60.0 (GO TO Q.22)

N = 30 N = 20

20. Is your company likely to apply for AES-PASS status? (Asked of those

who were familiar with AES-PASS and who plan to use AES or whose

companies had not yet decided whether to use AES.)

Yes 100.0 (GO TO Q.22)

No 0 (GO TO Q.22)

N = 11

21. Why does your company not plan to use AES?

 (DO NOT read list. Click all that respondent volunteers) (Asked of those

who say they will not use AES.)

Lack of knowledge about AES 36.4 (GO TO Q. 22)

______________________________________________

(Reasons spontaneously volunteered) 

Predeparture filing requirement 36.4

Cost of automation 0

Personnel cost 0

Company hardware or software incompatibility with AES 0

Concerns about the amount of information required by AES 0

Concerns about how the information will be used by Customs 0

Concerns about privacy protection of information 0

Other (Specify) 36.4

N = 11

I'd like your views about some concerns mentioned by others in using AES.

(Each item was asked of respondents who did not mention lack of knowledge

above and who did NOT volunteer the item in Q. 21. Results displayed include

those who volunteered the item in question 21 above.) 

21a Are you concerned or not about the predeparture SED filing requirement

of AES?

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Surveys

Volunteered 42.9

Yes 14.3

No 42.9

Don't know 0

N = 7

21b Are you concerned or not about the cost of automation necessary for

your company to get on AES?

Volunteered 0

Yes 42.9

No 42.9

Don't know 14.3

N = 7

21c Are you concerned or not about the amount of information required by

AES?

 

Volunteered 0

Yes 42.9

No 28.6

Don't know 28.6

N = 7

21d Are you concerned or not about how the information will be used by

Customs?

Volunteered 0

Yes 28.6

No 71.4

Don't know 0

N = 7

21e Are you concerned or not about privacy protection of information?

Volunteered 0

Yes 57.1

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Surveys

No 42.9

Don't know 0

N = 7

SED Preparation and Filing

Next, we'd like to know how your company currently prepares some of its

export-related paperwork. There are a number of ways a company may prepare

and file the Shippers Export Declaration form with the Census Bureau. I'd like

to ask you about the methods you used during the past year.

22. First, about what percentage of your export shipments required the filing

of an SED during 1996? Your best estimate will suffice.

MEDIAN 95

RANGE 50 - 100

INTERQUARTILE RANGE 15

Don't know 12.7

N = 63

23. Did your company submit all of the SEDs for those shipments to

Customs or did someone else also submit SEDs for those shipments?

We submitted all SEDs 28.6 (GO TO Q. 25)

Someone else submitted all or some of the SEDs 71.4

N = 63

24. About what percentage of the SEDs for your shipments did YOUR

company submit to Customs in 1996? (Results displayed include

respondents who answered "We submitted SEDs" to Q.23, scored as

submitting 100 percent.)

MEDIAN 19.5

RANGE 0 - 100

INTERQUARTILE RANGE 100

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Don't know 1.6

N = 63

25. How did your company submit its SEDs during 1996: Using paper SEDs, 

AERP, AES, or an Internet-based company linked to AES? (click all that

apply) (Results displayed include only respondents who submit SEDs.)

Paper 92.1

AERP 5.3

AES 0

Internet 0

Unknown 5.3

N = 38

For AERP Users Only:

26. The Census Bureau plans on phasing out the AERP system by the end of

1999. How does your company plan to submit its SEDs once the AERP

system is no longer available? (Click all that apply)

Company will use AES 75.0

Company will use an Internet service 0

No plans yet 0

Submit paper SEDs 25.0

Have an agent or the customer submit SEDs 0

Other (specify) 50.0

N = 4

For Paper SED Filers Only:

Business Computer Use

27. Does your company use a computer to manage any or all of its

export-related record keeping? (Results displayed exclude paper filers

who also file electronically.)

Yes 94.1

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No 5.9

N = 34

And finally, we'd like to know about the filing of your export paperwork and

the timing of your export shipments.

28. How difficult, if at all, was it for your company last year (1996) to file its

paper SEDs with the carrier prior to departure of the goods?

(Read each response option and click one)

Of very great difficulty 11.8

Of great difficulty 2.9

Of moderate difficulty 17.6

Of some difficulty 5.9

Of little or no difficulty 61.8

N = 34

29. During the last year (1996), did your company deliver ANY SEDs to the

carrier following departure of the goods? Do not include any submitted

through AERP.

Yes 38.2

No 61.8

N = 34

30. About how many of your SEDs were delivered after departure of the

goods?

MEDIAN 70.5

RANGE 1 - 100

INTERQUARTILE RANGE 97

Don't know 8.6

N = 35

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Surveys

Ask All:

That concludes our interview. Thank you for your time and your cooperation. 

If there is any other aspect of AES you'd like to comment on, please feel free to

do so now.

Page 61 GAO/NSIAD-98-5 Automated Export System
Appendix IV 

Objectives, Scope, and Methodology

To determine whether AES is likely to achieve its objectives of improving

export data, enhancing enforcement efforts, and streamlining export data

collection, we interviewed Customs and Census headquarters officials and

representatives of 12 government agencies with export-related

responsibilities. We also visited 13 Customs ports, including air, sea, and

land border ports, where we observed export processing and enforcement

operations and where we interviewed numerous supervisory and line

inspectors involved in these operations. We conducted interviews with

over 30 potential users of AES, including 12 ocean and air carriers and all

AES participants as of April 1997. We also interviewed over 10 of the top 16

AERP users in terms of value and volume of AERP filers. We also met with

several trade groups representing various segments of the export

community. In addition, we analyzed Customs’ and Census’ AES planning

documents and Customs’ strategic plans regarding its process for checking

goods to be exported. We also reviewed data provided by both Customs

and Census regarding their actual and projected costs for AES

development. We did not independently verify the validity of their cost

estimates.

As part of our effort to determine the trade community’s plans for using

AES, we conducted two surveys of potential AES users—U.S. ocean freight

forwarders and exporters. A detailed summary of our methodology for

these two surveys follows.

Freight Forwarder Survey

Methodology

Study Population and Sample The freight forwarder study population consisted of active licensed ocean

freight forwarders and NVOCCs listed in the Federal Maritime Commission’s

December 1996 Regulated Persons Index. The 1,939 freight forwarder

headquarters and 2,341 NVOCC listings were merged and duplicates were

eliminated, resulting in a total population of 3,209. A simple random

sample of 400 cases was selected from the combined list.

Twelve cases, although listed in the index, had not or were not currently

providing freight forwarding or NVOCC services and therefore were

considered ineligible for the survey. An additional six companies were

found to be subsidiaries of others on our list. In these instances, a single

respondent was chosen to respond on behalf of both companies.

Page 62 GAO/NSIAD-98-5 Automated Export System
Appendix IV 

Objectives, Scope, and Methodology

We sent certified letters to companies we were unable to contact by

phone. We received confirmation from the Postal Service that three of

those cases were not located at the listed address, nor did the Postal

Service have forwarding address information for those cases. The bonds

and tariffs of two cases were cancelled by the Federal Maritime

Commission. The population was adjusted to reflect these inactive cases.

Applying the same adjustment to the sample resulted in a final sample size

of 376.1

Data Collection Telephone interviews were completed with 3312 freight forwarders and

NVOCCs, for a response rate of 88 percent. Forty-five sample members

either refused to participate (30), could not be scheduled for an interview

during the study’s time frame (4), or could not be contacted to confirm

eligibility (11).

Sampling and Nonsampling

Error

Because this study is based on a probability sample, our estimates involve

some statistical uncertainty. Percentages and other estimates contained in

the report are the midpoints of the 95-percent confidence intervals for the

value being estimated. The results present intervals for items quoted in the

letter.

To minimize nonsampling sources of error, such as question wording or

sequencing effects and interviewer differences, the survey was pretested

with 16 active freight forwarders and NVOCCs following intensive

interviewer training and practice. The item nonresponse rate (the rate of

interviewers not recording an answer to a question that should have been

answered) for reported items ranged between 0 and 2 percent for

questions asked of all respondents and between 0 and 5 percent for

questions asked only of those not planning to use AES.

Nonresponse Analysis We examined the Federal Maritime Commission’s database to determine

whether systematic differences held between our sample and the parent

population as well as whether systematic differences distinguished

nonrespondents from our respondents. We examined each group in terms

of number of branch offices, as an approximate measure of size, the

mixture of cases from the freight forwarder or NVOCC listings, and the

region of the country in which they operated. All nonrespondents are

listed as having single offices, and about 6 percent of respondents are

listed as having two or more offices. Respondents and nonrespondents

1

One additional case was removed from the sample because its representative was a participant in

discussions of AES with GAO in another capacity.

2

Includes two cases for which the data were lost due to computer malfunction.

Page 63 GAO/NSIAD-98-5 Automated Export System
Appendix IV 

Objectives, Scope, and Methodology

alike were equally divided between the freight forwarder and NVOCC source

listings. No difference was found between respondents and

nonrespondents in terms of their geographic location nor between the

sample and its parent population.

Summary of Respondent

Characteristics

The freight forwarders we interviewed are predominantly small

companies. The great majority (94 percent) have single offices and few

employees. Nearly one-half have 5 or fewer full-time employees, and 

74 percent have fewer than 15. Collectively, our respondents employ a

total of about 87,000 people, and they have a total of 490 office locations.

Their home offices are located in 25 states and Puerto Rico. They served

an estimated 132,000 clients during 1996 and had gross revenues of about

$4.6 billion.

We did not attempt to verify the accuracy of information, such as the cost

of implementing AES, supplied by businesses during our interviews and

surveys.

Exporter Survey

Methodology

Study Population The study population for the exporter survey consisted of the companies

responsible for the greatest number of paper SEDs and/or those of the

highest value filed with the Census Bureau in September 1996.

Collectively, these companies filed or had their agents file 34,340 SEDs for

exports worth $3.9 billion. The number of SEDs filed by individual filers

ranged from 2 to 2,293, and the value of goods exported ranged from about

$2.4 million to about $492 million.

We obtained from the Census Bureau the names of the top 49 filers in

terms of volume of SEDs filed and the top 49 filers in terms of the value of

SEDs filed in September 1996. The two lists were combined and purged of

duplicates. In addition, foreign embassies and U.S. foreign military sales

units were removed from the list. The resulting list contained 80 filers

located in 22 states. During the course of the study, we learned that for

some companies, a single individual was responsible for one or more

additional filers. Multiple cases for a single respondent were combined

into a single case, leaving a final study population of 72 filers. Sixty-three

of these companies responded to the survey, a response rate of 88 percent.

Responding companies accounted for 92 percent of the SEDs filed by the

total study population and 88 percent of their total value.

Page 64 GAO/NSIAD-98-5 Automated Export System
Appendix IV 

Objectives, Scope, and Methodology

Nonresponse Analysis To determine whether systematic differences distinguished

nonrespondents from respondents, the two groups were compared in

terms of the value and number of SEDs filed as well as their geographic

location. Independent sample t-tests of the means of SED value and volume

revealed no difference between the groups on either dimension.

Because the distributions of these variables were nonnormal, a second

test, which grouped cases according to whether they fell in the top or

bottom half of each distribution, was performed. The comparison revealed

no difference between the two groups. The geographic distribution of

nonrespondents also paralleled that of respondents. Item nonresponse for

reported items ranged from 0 percent to 2 percent for questions asked of

all respondents in this survey and from 0 to 5 percent for questions asked

only of those planning to use AES.

We did our work between November 1996 and August 1997 in Washington,

D.C., and in various Customs port locations across the United States, in

accordance with generally accepted government auditing standards.

Page 65 GAO/NSIAD-98-5 Automated Export System
Appendix V 

Comments From the Department of

Commerce

Note: GAO comments

supplementing those in the

report text appear at the

end of this appendix.

Page 66 GAO/NSIAD-98-5 Automated Export System
Appendix V 

Comments From the Department of

Commerce

Page 67 GAO/NSIAD-98-5 Automated Export System
Appendix V 

Comments From the Department of

Commerce

Page 68 GAO/NSIAD-98-5 Automated Export System
Appendix V 

Comments From the Department of

Commerce

See comment 1.

Now on pp. 2, 5, and 6.

See pp. 20-21.

Page 69 GAO/NSIAD-98-5 Automated Export System
Appendix V 

Comments From the Department of

Commerce

Now on pp. 5 and 7.

See comment 2.

See comment 3.

Now on pp. 16-17.

See comment 4.

Now on p. 4.

Page 70 GAO/NSIAD-98-5 Automated Export System
Appendix V 

Comments From the Department of

Commerce

Now on p. 13.

See pp. 20-21.

Page 71 GAO/NSIAD-98-5 Automated Export System
Appendix V 

Comments From the Department of

Commerce

The following are GAO’s comments on the Department of Commerce’s

letter dated October 30, 1997.

GAO Comments 1. Our draft report stated that predeparture filing is a major concern for

some segments of the export community, including certain industry

groups, airlines and air couriers, and companies that export bulk goods or

grain commodities. However, we do not state that most companies we

interviewed cited the requirement for predeparture filing as the main

reason for not participating in AES.

We note that nearly 40 percent of both the freight forwarders and

exporters we surveyed reported that they have at least “some” to “very

great” difficulty filing SEDs predeparture. In addition, about 40 percent of

both groups said they filed SEDs late in 1996. Among companies that

reported little or no difficulty filing SEDs predeparture, 28 percent of all

ocean freight forwarders and 19 percent of exporters we surveyed said

they filed SEDs late in 1996.

2. In commenting on the percent of companies that report only to Census

and Customs, Census did not take into account those companies that

reported having licensing requirements. Therefore, the statistics they cite

are inaccurate. About 61 percent of all ocean freight forwarders, and, of

the exporters we surveyed, 32 percent have no license or other agency

reporting requirements.

3. We note in our report that AES was designed to serve as a source of

export data for agencies with export requirements and reduce

redundancies in filing and paperwork associated with various export

control requirements. This paperwork includes license application data.

We revised the text to make clear that AES was not designed to replace an

agency’s authority to regulate exports.

4. We do not suggest that paper filers need to automate their procedures in

order to file via AES. Rather, our report lists various options available to

companies that want to convert from filing paper SEDs to filing via AES

(see p. 4).

Page 72 GAO/NSIAD-98-5 Automated Export System
Appendix VI 

Comments From the U.S. Customs Service

Note: GAO comments

supplementing those in the

report text appear at the

end of this appendix.

See comment 1.

Page 73 GAO/NSIAD-98-5 Automated Export System
Appendix VI 

Comments From the U.S. Customs Service

Now on p. 4.

See pp. 20-21.

Page 74 GAO/NSIAD-98-5 Automated Export System
Appendix VI 

Comments From the U.S. Customs Service

Now on pp. 3-4

and 14.

Page 75 GAO/NSIAD-98-5 Automated Export System
Appendix VI 

Comments From the U.S. Customs Service

Page 76 GAO/NSIAD-98-5 Automated Export System
Appendix VI 

Comments From the U.S. Customs Service

Page 77 GAO/NSIAD-98-5 Automated Export System
Appendix VI 

Comments From the U.S. Customs Service

See comment 2.

Now on p. 16.

Page 78 GAO/NSIAD-98-5 Automated Export System
Appendix VI 

Comments From the U.S. Customs Service

Page 79 GAO/NSIAD-98-5 Automated Export System
Appendix VI 

Comments From the U.S. Customs Service

The following are GAO’s comments on the U.S. Customs Service’s letter

dated October 27, 1997.

GAO Comments 1. Our report does not state that the majority of the trade community

supports full automation or that a majority recognizes the benefit of

one-stop filing. Instead, our survey shows that 45 percent of all ocean

freight forwarders and 55 percent of the exporters we surveyed cited the

convenience of automation as an incentive to use AES. Only 16 percent of

ocean freight forwarders and 18 percent of the exporters we surveyed

cited one-stop filing as an incentive to use AES. Similarly, our work does

not validate that 80 percent of the information required predeparture is in

fact available predeparture. We note in our report that representatives

from some companies participating in Customs’ 1996 evaluation of AES

stated that they believe that 80 percent of the time they have information

needed to complete the SED prior to predeparture of the vessel. We did not

attempt to determine whether this was an universal view among

companies in the exporting community. Conversely, our surveys show that

nearly 40 percent of both the freight forwarders and exporters we

surveyed reported that they have at least some to very great difficulty

filing SEDs predeparture. About 40 percent of both groups said they filed

SEDs late in 1996.

2. We note in our report that AES was designed to serve as a source of

export data for agencies with various export control requirements and to

reduce redundancies in filing and paperwork. This paperwork includes

license application data. However, we also state that AES is unlikely to

achieve its objective of providing exporters with “one-stop shopping”

because most agencies’ export requirements cannot be fully satisfied

through AES. We also note that AES will not reduce or eliminate agency

paperwork or the electronic filing associated with the issuance of export

licenses, certificates, or permits. However, we have revised the text to

make clear that AES was not designed to replace an agency’s authority to

regulate exports.

Page 80 GAO/NSIAD-98-5 Automated Export System
Appendix VII 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

Elizabeth J. Sirois, Assistant Director

Elizabeth Morrison, Evaluator-in-Charge

Carolyn Black-Bagdoyan, Senior Evaluator

Sara B. Denman, Senior Evaluator

Mary M. Park, Evaluator

Olivia L. Parker, Evaluator

Rona H. Mendelsohn, Senior Communications Analyst

Waverly E. Sykes, Assistant Director

Marilyn C. Mauch, Assistant Director

Kathleen M. Joyce, Senior Social Science Analyst

Arthur L. James, Jr., Senior Statistician

Office of the General

Counsel

Mark C. Speight, Senior Attorney

Los Angeles Regional

Office

Daniel R. Garcia, Senior Evaluator

Edward J. Laughlin, Senior Evaluator

Larry S. Thomas, Senior Evaluator

(711238) Page 81 GAO/NSIAD-98-5 Automated Export System
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