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66–049—PDF 2009

S. HRG. 111–971 

CUSTOMS FACILITATION AND TRADE 

ENFORCEMENT ACT OF 2009 

HEARING 

BEFORE THE

COMMITTEE ON FINANCE 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

ON

S. 1631 

OCTOBER 20, 2009 

( 

Printed for the use of the Committee on Finance 

COMMITTEE ON FINANCE 

MAX BAUCUS, Montana, Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

KENT CONRAD, North Dakota 

JEFF BINGAMAN, New Mexico 

JOHN F. KERRY, Massachusetts 

BLANCHE L. LINCOLN, Arkansas 

RON WYDEN, Oregon 

CHARLES E. SCHUMER, New York 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

CHUCK GRASSLEY, Iowa 

ORRIN G. HATCH, Utah 

OLYMPIA J. SNOWE, Maine 

JON KYL, Arizona 

JIM BUNNING, Kentucky 

MIKE CRAPO, Idaho 

PAT ROBERTS, Kansas 

JOHN ENSIGN, Nevada 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

RUSSELL SULLIVAN, Staff Director 

KOLAN DAVIS, Republican Staff Director and Chief Counsel 

(II) 

(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Baucus, Hon. Max, a U.S. Senator from Montana, chairman, Committee 

on Finance ............................................................................................................ 1 

Grassley, Hon. Chuck, a U.S. Senator from Iowa ................................................. 10 

Wyden, Hon. Ron, a U.S. Senator from Oregon .................................................... 15 

WITNESSES 

Cook, Jerry, vice president, government and trade relations, Hanesbrand, 

Inc., Winston-Salem, NC ..................................................................................... 3 

Cotton, Rick, executive vice president and general counsel, NBC Universal, 

New York, NY ...................................................................................................... 4 

Sherman, Ted, director, global trade services, Target Corporation, Minneapolis, MN ......................................................................................................... 6 

Comstock, Mary Ann, brokerage compliance manager, UPS Supply Chain 

Solutions, Inc., Sweet Grass, MT ........................................................................ 8 

ALPHABETICAL LISTING AND APPENDIX MATERIAL 

Baucus, Hon. Max: 

Opening statement ........................................................................................... 1 

Prepared statement .......................................................................................... 21 

Comstock, Mary Ann: 

Testimony .......................................................................................................... 8 

Prepared statement .......................................................................................... 23 

Responses to questions from committee members ......................................... 32 

Cook, Jerry: 

Testimony .......................................................................................................... 3 

Prepared statement .......................................................................................... 45 

Responses to questions from committee members ......................................... 60 

Cotton, Rick: 

Testimony .......................................................................................................... 4 

Prepared statement .......................................................................................... 73 

Responses to questions from committee members ......................................... 88 

Grassley, Hon. Chuck: 

Opening statement ........................................................................................... 10 

Prepared statement .......................................................................................... 95 

Sherman, Ted: 

Testimony .......................................................................................................... 6 

Prepared statement .......................................................................................... 97 

Responses to questions from committee members ......................................... 102 

Wyden, Hon. Ron: 

Opening statement ........................................................................................... 15 

COMMUNICATIONS

American Association of Exporters and Importers ............................................... 109 

Business Alliance for Customs Modernization (BACM) ....................................... 112 

Grocery Manufacturers Association (GMA) ........................................................... 116 

International Association of Professional Numismatists ...................................... 121 

National Association of Manufacturers .................................................................. 131 

National Customs Brokers and Forwarders Association of America .................. 142 

Nintendo of America Inc. ........................................................................................ 152 

Stein, Shostak, Shostak, Pollack, and O’Hara, LLP ............................................. 157 

United States Association of Importers of Textiles and Apparel (USAITA) ....... 166 

(1) 

CUSTOMS FACILITATION AND TRADE 

ENFORCEMENT ACT OF 2009 

TUESDAY, OCTOBER 20, 2009 

U.S. SENATE, 

COMMITTEE ON FINANCE, 

Washington, DC. 

The hearing was convened, pursuant to notice, at 10:09 a.m., in 

room SD–215, Dirksen Senate Office Building, Hon. Max Baucus 

(chairman of the committee) presiding. 

Present: Senators Wyden and Grassley. 

Also present: Democratic Staff: Bill Dauster, Deputy Staff Director and General Counsel; Amber Cottle, Chief International Trade 

Counsel; Ayesha Khanna, International Trade Counsel; Hun 

Quach, International Trade Analyst; and Ryan Nalty, Associate. 

Republican Staff: Stephen Schaefer, Chief International Trade 

Counsel; and Claudia Poteet, International Trade Policy Advisor. 

OPENING STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR 

FROM MONTANA, CHAIRMAN, COMMITTEE ON FINANCE 

The CHAIRMAN. The committee will come to order. 

The Scottish historian John Buchan warned reformers to learn 

from the past. He counseled: ‘‘History gives us a chart.’’ 

The Bureau of Customs and Border Protection, or CBP, has a 

long and rich history. As we reform CBP for the 21st century, we 

would do well to study the chart that this history gives us. 

In 1789, one of the first five laws enacted by the first Congress 

established a Collector of Customs. This organization ultimately became the United States Customs Service, and then CBP. For 220 

years, it has collected duties and enforced America’s trade laws. 

In 2002, CBP got a new job. It still has to fulfill its traditional 

trade mission, but in addition CBP must also secure our Nation’s 

borders. These two missions are not mutually exclusive. CBP must 

do a better job of balancing them. The Agency’s security mission is 

certainly vitally important, but I am concerned that CBP has badly 

neglected its trade mission. 

In recent years, CBP simply has not made trade facilitation and 

enforcement a priority. CBP has devoted fewer people to stopping 

illegal and counterfeit goods from crossing our borders, it has imposed burdensome paperwork and reporting requirements on 

American businesses, and it has failed to consult with Congress or 

businesses before imposing sweeping policy changes. 

To address these problems, Senator Grassley and I introduced 

the Customs Facilitation and Trade Enforcement Reauthorization 

2 

Act of 2009. Our bill would direct CBP to re-prioritize its trade 

mission, and our bill would give CBP the tools to do so. 

For example, our bill would create new high-level positions within CBP to focus solely on trade facilitation and enforcement. It 

would establish sophisticated commercial enforcement practices to 

target those imports that are most likely to violate American laws, 

including our intellectual property and safety laws. 

Our bill would provide speedy Customs clearance for importers 

with a strong history of complying with U.S. laws. It would require 

CBP to do a better job consulting with American businesses affected by its policies, as well as with this committee and Congress 

as a whole. 

Our bill would provide important benefits for border States, like 

Montana. Montana has not received the personnel or funding that 

it needs to facilitate the substantial volumes of trade that cross its 

borders every day. 

The bill directs CBP to launch a pilot program to designate certain land border ports as 24-hour commercial ports of entry, and 

I hope that this provision will drive additional trade and other economic resources to the areas that need them the most. 

And our bill would accomplish all of these objectives without diverting resources from CBP’s vital security efforts. As a Senator 

from Montana, I understand the crucial importance of CBP’s national security mission. Montana’s border with Canada stretches 

over 500 miles. I have fought long and hard for adequate resources 

to secure it. 

But CBP needs to balance its security mission with its trade mission. We should look to CBP’s own rich history for guidance on how 

to do so. This history and this bill can help CBP to chart a course 

to better serve the interests of American businesses, the States, 

and the American people. 

Senator Grassley is not here, as you can tell, but he will be here 

shortly. When Senator Grassley arrives, I will ask him if he wants 

to give his statement. 

In the meantime, we are pleased to begin our hearing today with 

Jerry Cook, vice president for government and trade relations for 

Hanesbrand, Inc. Following Mr. Cook is Rick Cotton, executive vice 

president and general counsel for NBC Universal. Our third witness is Ted Sherman, director for global trade services with Target 

Corporation. Finally, we welcome back Mary Ann Comstock from 

Sweet Grass, MT. Mary Ann serves as brokerage compliance manager for UPS Supply Chain Solutions, and Ms. Comstock appeared 

before this committee in 2002 and has been helpful to our efforts 

ever since. Thank you very much, Mary Ann, for again making this 

trip. 

Thank you all for coming. As is our usual practice, your prepared 

statements will be included in the record, and I ask each of you to 

summarize your statements in about 5 minutes. 

We will begin with you, Mr. Cook. 

3 

STATEMENT OF JERRY COOK, VICE PRESIDENT, GOVERNMENT AND TRADE RELATIONS, HANESBRAND, INC., WINSTON-SALEM, NC 

Mr. COOK. Good morning. Thank you, Chairman Baucus, Ranking Member Grassley, and honored members of the Senate Finance 

Committee. 

I am pleased to be here today, before you. I am the vice president 

for Hanesbrands, with responsibility for our customs and trade operations. We value our partnership with U.S. Customs and Border 

Protection and view the relationship as an integral collaboration in 

our business success. 

Seven years ago, in June of 2002, I was sitting in this same chair 

testifying on the transfer of U.S. Customs Service to the Homeland 

Security Department. I emphasized the importance of keeping enforcement and commercial operations together. 

As I said in 2002 and still believe today, ‘‘The process of enforcing trade laws advancing a hybrid solution that both informs the 

trade community of the respective programs and seeks joint ownership in these critical areas’’ is essential. It is essential that the integrity of the enforcement and commercial nexus remain intact. 

Over the past years, Customs has been largely successful in creating a culture of knowledge, discipline, and professionalism. My 

remarks today should be understood to help refine the line and improve the current partnership. 

Seven years ago, I stressed the importance of accelerating the 

implementation of the Automated Commercial Environment (ACE) 

and the need to provide trade industry input to senior levels of the 

Customs Service. And in 1993, Congress passed and enacted the 

Customs Modernization, or Mod Act. While targeting implementations had been developed, only 4 of the 30 provisions that were 

originally enumerated had been fully delivered. 

I applaud the provisions in section 205, which authorized funds 

until 2012. I look forward to a time when all data interfaces will 

be electronic, and the U.S. Government will be the single portal, 

as intended in the International Trade Data System (ITDS) model. 

As stated in the 2002 testimony, communication between CBP 

and industry is essential for both parties, and I applaud you for addressing this issue, specifically in section 101, with the new Office 

of Trade and the new Principal Deputy Commissioner. These additions and positions will give renewed support and invigorate the 

balance to advocate for trade and commercial concerns and the 

challenges we face. The other part of this equation, though, is to 

further enhance industry input into the participation. 

I strongly support the language that you have included in section 

101, where you establish the Interagency Customs Review Board, 

as well as section 204, where you address the need for specific industry input. 

There needs to be greater connectivity with Customs between security and law enforcement, and trade facilitation. For example, 

even with all of the activity at the WTO surrounding trade facilitation, trade facilitation is so fully lacking in the conversations at the 

World Customs Organization (WCO). 

I would like to applaud you for addressing the coordination, 

though, between the U.S. agencies that may become involved in the 

4 

business trade. You address this issue specifically in section 206 of 

the bill, directing the Secretary to work with the head of each 

agency partner in the International Trade Data System. 

Mr. Chairman, there is a tool which could be used to bring the 

security and commercial sides of Customs matters together, as well 

as improve targeting and facilitate commerce. It is called the Account Management Program. The AMP is supposed to provide uniform, consistent, and efficient treatment of importers willing to 

continue their investment in CBP compliance programs. 

When the Account Management Program is fully deployed, along 

with ACE, the expected dividends of the Mod Act, ACE, and security, can assist in yielding a more robust and compliant commerce 

in the United States. 

I appreciate that in section 201 you direct Homeland Security to 

develop and implement trade benefits for Customs-Trade Partnership Against Terrorism (C-TPAT) partners. The Customs Facilitation Partnership, which you proposed to create in section 202, represents another step forward to enhance communication and cooperation between trade and the industry. 

The Account Management Program model could also provide benefits to the so-called ‘‘trusted trade’’ importers that have heavily invested in security and commercial compliance programs. We need 

to seek the benefits of utilizing known and repetitive account-based 

information to reduce the cost of compliance and security. 

I want to thank you again, Mr. Chairman, Ranking Member 

Grassley, and distinguished members of the committee, for this opportunity to appear before you today. 

We want to thank CBP for their outstanding efforts and partnership they have provided. I welcome any questions you have, and 

am submitting a copy of my complete comments for the record. 

Senator GRASSLEY. Thank you, Mr. Cook. 

[The prepared statement of Mr. Cook appears in the appendix.] 

Senator GRASSLEY. Mr. Cotton? 

STATEMENT OF RICK COTTON, EXECUTIVE VICE PRESIDENT 

AND GENERAL COUNSEL, NBC UNIVERSAL, NEW YORK, NY 

Mr. COTTON. Thank you, Chairman Baucus, Ranking Member 

Grassley, Senator Wyden. 

I appreciate the opportunity to testify today on behalf of the Coalition Against Counterfeiting and Piracy, which consists of more 

than 650 companies and associations from nearly every sector of 

the U.S. economy. We work closely on these issues with organized 

labor, both the AFL–CIO, and Change to Win. 

Mr. Chairman, our message today is simple. We must move from 

a perspective where counterfeiting is a 4-syllable word to one 

where it is a 4-letter word, from where counterfeiting is regarded 

as morally ambiguous to where it is recognized as a reprehensible 

job killer in a U.S. economy that is starved for high-wage employment. 

Over the last 20 years, the experts agree that cross-border IP 

theft has mushroomed from a cottage industry into a global network that endangers our economy, kills our jobs, threatens our citizens’ health and safety, and nourishes organized crime. 

5 

In our view, an accurate estimate of the scale of the problem 

would probably be between half a trillion and a trillion dollars a 

year. CBP and ICE, especially since 9–11, simply have not had the 

resources, the necessary organizational focus and dedicated highlevel leadership positions, or the statutory tools, to make headway 

against this growing tsunami. 

As a government, and as a society, we have allowed the scale and 

sophistication of the counterfeiters to outrun our law enforcement 

resources. We regard chapter 3 of the Baucus-Grassley bill as heralding a new era in the expanded role of CBP and ICE in protecting the future economic well-being of the U.S. 

We commend you and your able staff for crafting this landmark 

piece of legislation. This bill recognizes that CBP and ICE must 

take bold organizational and resource initiatives in order to ensure 

that the fruits of the innovation, ingenuity, invention, and creativity of U.S. industry are not hijacked, but instead used to 

produce jobs here. 

I would like to make a particularly important point. The BaucusGrassley bill will make our Customs Agency a model that we can 

call upon our trading partners to emulate. Internationally, we are 

most persuasive in convincing other nations to act if we lead by example. Why should others act if we have not done so? 

Like the Prioritizing Resources and Organization for Intellectual 

Property, or PRO–IP Act enacted last year, the Baucus-Grassley 

bill recognizes that effective IP protection requires upgrades in 

three areas: the creation of high-level dedicated leadership positions, dedicated enforcement resources, and the enhancement of 

statutory authority. We applaud the high-level leadership on IP 

issues at CBP that would be created by merging the international 

and commercial offices into a single office headed by an Assistant 

Commissioner. 

Likewise, we commend the provisions that establish the National 

Intellectual Property Coordinating Center as a permanent fixture 

under the leadership of an Assistant Director. 

Mr. Chairman, the Baucus-Grassley bill also recognizes that in 

this world of skilled organized crime, counterfeiters, and pirates, 

we need dedicated IP experts assigned to the ports and to ICE. We 

would only suggest that the number of such experts be increased 

from the 10 currently in the bill to a sufficient number to cover all 

high-volume ports. 

We vigorously endorse the bill’s mandate for a Joint Strategic 

Plan, with special provisions to address IP infringement. We ask 

the committee to consider expanding the IP elements of the plan, 

as detailed in my written statement. 

We also support, strongly, the bill’s provisions enabling CBP to 

work smarter. These include the establishment of national targeting and analysis groups, enabling CBP to target suspect shippers and shipments. We further endorse the bill’s creation of a list 

of persons who deserve special scrutiny by virtue of their past infringing conduct, and a corresponding list of trustworthy partners 

whose goods can be approved speedily and move through the ports 

without delay. 

We also greatly applaud a landmark provision in the bill that requires the Department of Homeland Security to initiate an eduVerDate Nov 24 2008 18:12 May 31, 2011 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 R:\DOCS\66049.000 TIMD
6 

cation campaign for travelers on the harms visited by IP theft, 

countering the pernicious canard that it is just a victimless nuisance crime. We do suggest that the campaign would be enhanced 

considerably if the bill also required a declaration on the Customs 

Form stating that the traveler is not knowingly bringing illegal 

counterfeit physical goods into the U.S. 

Last year, Laura Tyson, former Chair of the Counsel of Economic 

Advisors, conducted a major study that documented the farreaching corrosive impact of counterfeiting and piracy on the U.S. 

economy. But the Tyson study also documented that adopting the 

kind of sensible and effective measures this bill contains would return more than $5 in Federal tax revenues for every dollar spent 

on enforcement and likely create a minimum of 200,000 new jobs 

in 3 years. 

In conclusion, this committee knows all too well the far-reaching 

impact of the recession and of today’s unacceptably high unemployment rates. Every day we delay, we lose more jobs and sap more 

economic vitality that could help us get out of today’s economic 

ditch. 

We urge rapid passage of the Baucus-Grassley bill and express 

the hope that the committee will carefully evaluate the few, but important, suggestions we have made today. 

Thank you very much. 

The CHAIRMAN. Thank you very much, Mr. Cotton. 

[The prepared statement of Mr. Cotton appears in the appendix.] 

The CHAIRMAN. Mr. Sherman? You are next. 

STATEMENT OF TED SHERMAN, DIRECTOR, GLOBAL TRADE 

SERVICES, TARGET CORPORATION, MINNEAPOLIS, MN 

Mr. SHERMAN. Chairman Baucus, Ranking Member Grassley, 

and members of the Finance Committee, thank you for inviting 

Target to testify before you today. 

My name is Ted Sherman, and I am the director of Global Trade 

Services for Target. I also currently serve as the co-chair of BACM, 

the U.S. Business Alliance for Customs Modernization. 

At Target, I lead a team of 100 team members responsible for all 

customs operations, compliance, brokerage, and trade finance activities within Target. Target is active in the Retail Industry Leaders Association, the American Association of Exporters and Importers, the American Apparel and Footwear Association, and a number of other trade groups. 

I want to thank you for giving us this opportunity to have our 

voice heard in the discussions of the Customs Facilitation and 

Trade Enforcement Act of 2009. My testimony will specifically address the areas of facilitation, partnership programs, and automation. 

For background, Target is a $62-billion U.S.-based retailer operating approximately 1,700 stores in 49 States. We currently employ 

approximately 350,000 team members. Our import volumes include 

more than 160,000 individual Customs filings each year, making us 

one of the largest U.S. importers by transaction volume. 

We strongly support efforts by Congress to encourage U.S. Customs and Border Protection to increase its focus on trade facilitation, while at the same time fulfilling its border security mission. 

7 

A focus on true trade facilitation should eventually yield processes that are consistent, reasonable, and simple for importers such 

as Target. To effectively plan our business, we need to be able to 

operate with some degree of certainty as to the regulatory landscape we will need to navigate in the near-to-medium-term. 

Decisions to formulate new rules and regulations should be made 

as part of a holistic view of the requirements currently being 

placed on importers. New requirements, such as the Importer Security Filing and the Lacey Act declaration, will by definition place 

strains on the resources of even the healthiest companies. 

Given the necessity of carrying out these requirements, consideration should be given to any current initiatives and requirements 

impacting importers before new rule changes are implemented. 

This will not only ease the burden on importers, but will improve 

compliance, as importers will be able to direct resources to what is 

most important for the country. 

Target has partnered with CBP to improve security practices and 

reduce supply-chain risks. Target is a charter member of the 

Customs-Trade Partnership Against Terrorism, or C-TPAT, and 

participates in the Importer Self-Assessment Program, meaning 

our internal controls have been validated and found to be best in 

class by CBP. 

When correctly structured and administered, voluntary partnership programs can deliver benefits to both industry and government. For example, the Customs Facilitation Partnership Program 

should be as broad as possible and should include tangible benefits 

for importers found to have the best handle on trade compliance. 

Companies involved in such partnership programs could be 

among the first to benefit from a transition to true account management. They could eventually move toward account-based processing, where most information is submitted to Customs on a periodic basis rather than transaction-by-transaction. 

True periodic reporting will take time and a considerable amount 

of partnership between CBP and the trade. In the near term, we 

have concerns surrounding the potential use of advance filing data 

for commercial compliance targeting purposes. There are different 

standards and penalty regimes for filing of advance data used for 

security and the filing of data used for Customs entry purposes. 

If advance data is to be used for commercial targeting purposes 

in the near term, there must be safeguards in place to ensure the 

two penalty regimes are recognized and kept separate. That is, the 

use of Importer Security Filing (ISF) data for commercial compliance targeting must not lead to new penalties or to the wholesale 

use of traditional commercial enforcement tools as a remedy for 

ISF discrepancies or omissions. 

With regard to automation, we strongly favor the full funding 

and completion of the Automated Commercial Environment and 

the implementation of the International Trade Data System. Large 

importers, such as Target, must plan their systems resources over 

a long period of time. The certainty and timing of ACE’s full 

functionality is critical to these planning efforts. 

Complementary to the vision for completing ACE, we support efforts to provide a single window for the entry and release of import 

transactions. A holistic, systematic approach is needed for colVerDate Nov 24 2008 18:12 May 31, 2011 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 R:\DOCS\66049.000 TIMD
8 

lecting information at the border. Currently, in some cases, disparate communication methods are used for interacting with the 

various other government agencies that have a role in determining 

admissibility of merchandise into the U.S. To that end, we support 

continued funding for the International Trade Data System. 

Before I conclude, I would like to recognize Chairman Baucus, 

Ranking Member Grassley, and the Senate Finance Committee for 

introducing the Customs Facilitation and Trade Enforcement Reauthorization Act of 2009. In general, this Act seeks to renew the 

commercial operations mandate for CBP and to provide increased 

predictability and efficiency for the import community. We share 

these objectives and welcome the opportunity to be a partner as the 

process moves forward, contributing to our mutual goals of enhancing trade facilitation and our Nation’s security. 

Thank you for the opportunity to speak to you today, and I welcome any questions. 

The CHAIRMAN. Thank you, Mr. Sherman. 

[The prepared statement of Mr. Sherman appears in the appendix.] 

The CHAIRMAN. Ms. Comstock? Welcome. 

STATEMENT OF MARY ANN COMSTOCK, BROKERAGE COMPLIANCE MANAGER, UPS SUPPLY CHAIN SOLUTIONS, INC., 

SWEET GRASS, MT 

Ms. COMSTOCK. Chairman Baucus, Ranking Member Grassley, 

and members of the committee, I appreciate the opportunity to discuss components of the Customs Facilitation and Trade Enforcement Reauthorization Act of 2009. 

My name is Mary Ann Comstock, and I am a native Montanan 

employed in the customs brokerage business. I live and work in 

Sweet Grass, MT, which is by volume the eighth-busiest port of 

entry on the northern border. 

I have been a licensed customs broker for more than 30 years, 

and I bring a unique perspective, having owned my own small brokerage firm. And I now work as a compliance manager for UPS, 

one of the world’s largest brokerage firms. 

UPS would like to thank the committee for its work on this significant piece of legislation. We view this bill as a way to enhance 

the relationship between the public and private sectors through increased trade facilitation. 

The committee’s continued focus and support of the Automated 

Commercial Environment, or ACE, and the International Trade 

Data System is very welcome. 

I would like to focus on three topics today, the first of which is 

of utmost importance to UPS. We strongly support the increase in 

de minimis and informal entry values. We commend the committee 

for recognizing the importance of this issue. 

To meet the demands of inflation and the global economy, we 

suggest the de minimis amounts for section 321 be raised from 

$200 to $800, and the informal entry limits from $2,000 to $5,000, 

both of which have not been changed since 1993 and 1998, respectively. 

The Trade Act of 2002 provided for an increase in the return 

travelers’ personal exemption from $400 to $800. This is an approVerDate Nov 24 2008 18:12 May 31, 2011 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 R:\DOCS\66049.000 TIMD
9 

priate benchmark for increasing the de minimus. We recommend 

that the Secretary of Treasury periodically consider adjusting these 

values to ensure the limits are consistent with the rate of inflation. 

Increasing the value thresholds offers benefits to U.S. Customs 

and Border Protection and the importing public. ACE has allowed 

Customs to focus their efforts on security and high-risk targeting, 

and this value change offers all levels of business, particularly 

small and medium-sized, the opportunity to reduce brokerage expenses and provide for simplified procedures for entry and release. 

The second topic relates to Account-Based Management, which is 

an existing Customs program. The concept of Account Management 

was developed by Customs in 1994 to work with importers and brokers handling significant volumes of goods entering the United 

States. 

The goal of the public-private partnership was to achieve a highlevel of compliance and focus on trade issues. The current program 

can be improved upon, as suggested by the May 7, 2009, ‘‘COAC 

(Commercial Operations Advisory Committee) Report of AccountBased Processing’’ publication. 

Revitalizing the existing program would be an immense step forward in trade facilitation, without hindering security. The program 

should include commercial, security, interagency, and information 

technology components with an enhanced role for the Customs’ National Account Managers. 

My third topic is the pilot program for establishing 24-hour land 

border ports of entry. Coming from the fourth-largest State in the 

Union that has only two commercial ports on our 550-mile-long 

northern border, this proposal can benefit the borders. State and 

local governments eligible for a new 24-hour land border port must 

be willing to commit resources and infrastructure improvements to 

support a commercial port designation. 

A new commercial port could benefit importers by cutting down 

on transit times, while providing local economies a boost from increased traffic. The proposal also fosters dialogue with Canada and 

Mexico, our closest trading partners. 

The written testimony submitted for the record also addresses 

the use of trade data for commercial targeting purposes, Commercial Customs Operations Advisory Committee appointee terms, 

C-TPAT benefits, ACE ITDS implementation, intellectual property 

rights, and the Importer of Record program. 

In closing, I would like to applaud the committee for their renewed focus on trade. By providing Customs the tools to facilitate 

legitimate trade and reorganizing their structure to emphasize 

trade’s importance to the U.S. economy, you have taken a huge 

step at re-balancing the border. Security and Trade Facilitation 

should be of equal concern. 

On behalf of more than 415,000 UPS employees world-wide, and 

over 900 located in Montana, thank you for allowing me the opportunity to testify today. 

The CHAIRMAN. Thank you, Ms. Comstock. 

[The prepared statement of Ms. Comstock appears in the appendix.] 

The CHAIRMAN. Senator Grassley? 

10 

OPENING STATEMENT OF HON. CHUCK GRASSLEY, 

A U.S. SENATOR FROM IOWA 

Senator GRASSLEY. Yes. I am sorry that I was late getting here, 

because I had some high school kids I was visiting with. 

Mr. Chairman, you and I have worked together productively on 

Customs oversight for many years. In 2002, we reauthorized the 

Customs Service’s part of the Trade Act of that year. That same 

year, we worked to transition the Customs Service into the newlyestablished Department of Homeland Security. In 2006, we introduced a Customs Reauthorization Bill, and our efforts contributed 

to the development of the SAFE Port Act that year. That effort also 

served as the basis for our work this year to produce legislation 

subject to our hearing. 

During our years of oversight, we have generally enjoyed a good 

working relationship with dedicated personnel of U.S. Customs and 

Border Protection. We all know them as the CBP and the U.S. Immigration and Customs Enforcement, known as ICE. But in the 3 

years since we enacted the SAFE Port Act, some new concerns 

have come before us. 

One concern is that the balance at CBP between protecting our 

Homeland Security and safeguarding our economic security via 

trade facilitation is not quite right. So, our bill beefs up the trade 

facilitation vision of CBP by a restructuring of the Office of Trade 

and authorizing dedicated Customs Facilitation and Trade Enforcement personnel to the Office of Field Operations. 

Another concern is that there has not been sufficient political accountability to Congress by Customs, so our bill establishes a 

Senate-confirmed position of a Principal Deputy Commissioner to 

oversee commercial operations in that subdivision. And more generally, our bill updates Customs laws to reflect the existence of 

CBP and ICE within the Department of Homeland Security. 

Another concern is that consultation between Customs and the 

public, as well as between Customs and other Federal agencies, has 

not been as robust as it should be, so our bill reconstitutes the 

Commercial Customs Operations Advisory Committee (CCOAC) to 

provide greater independence of the committee. 

Our bill establishes a new interagency review board to ensure 

that changes in Customs rules and regulations are consistent with 

our international trade obligations. And, separately, our bill 

strengthens the commercial targeting functions performed by Customs and ICE by authorizing commercial targeting groups and repealing the firewall between use of information for security purposes and commercial enforcement purposes. 

In particular, our bill contains provisions intended to strengthen 

enforcement of intellectual property rights and import product safety measures. We have continued to hear concerns that more can be 

done by CBP to facilitate trade. 

So, the bill disciplines the development and implementation of 

the Automated Commercial Environment computer system and the 

International Trade Data System for obtaining cargo clearance for 

other government agencies. The bill also includes a duty drawback 

modernization provision to simplify drawback for both government 

and the private sector. 

11 

The bill includes a number of miscellaneous provisions, the most 

significant of which is an update of the ban on importing goods 

made by convict labor. During Finance Committee consideration of 

legislation to implement our trade agreement with Oman in 2006, 

I committed to working with Senators Conrad and Baucus for an 

update on this ban. Our bill reflects the product of our effort to 

work together to expand the ban to prohibit importation of goods 

made by convict labor, forced or indentured labor, coerced labor, 

and the labor of trafficked persons. 

In sum, our bill beefs up the commercial operations at CBP without detracting from the agency’s dual Homeland Security mission, 

and it provides for greater cohesion between CBP, ICE, and other 

Federal agencies with a stake in the process of clearing cargo for 

entry. Those were our motivations in introducing this legislation. 

I thank all of our witnesses, as well. I am glad I was here to be 

able to hear all of you. 

Thank you very much, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator, very much. 

One question I have, basically, for want of a better way to express this is, how much will this bill really help? We establish new 

positions, confirmed by the Senate, to give more power to the Customs trade side. We are also setting up this trade enforcement 

state-of-the-art mechanism, and some other provisions as well. 

What do you think is the most—I am going to ask all of you— 

important part of this bill, and what more might you add? Here is 

your chance. What else would you suggest? 

I will start with you, Mr. Cook. 

Mr. COOK. To start with, I think this is an outstanding bill. I 

think it reconnects the whole commercial operation with security, 

it invigorates the industry input, and I think the creation of the 

new positions in the Commerce section putting up, specifically the 

Secretary, having the Commissioner report to the Secretary of 

Homeland Security, brings the commercial side directly into the 

whole Homeland Security. 

The only piece that I would look at adding is having the Field 

Ops report into the Office of Trade directly so that the policy, as 

it is designed, also includes the full implementation, because, if 

there is a malfunction, it is typically getting policy fully implemented. 

The CHAIRMAN. That is a good point. So, would Homeland Security have a problem with that, or not? Most might have a problem 

with that. 

Mr. COOK. I do not think so. I think one of the great things that 

you are doing is re-envisioning where in Homeland Security Commerce is, and that the U.S. business groups need the commercial 

facilitation. And the way you and Senator Grassley have outlined 

this, the second appointed position, so that you have double time 

to talk, is a great envisioning. 

The CHAIRMAN. But you would extend that down so the Field Officer, you say, would report directly to the new Principal Deputy? 

Mr. COOK. I would. 

The CHAIRMAN. All right. 

Mr. Cotton? 

12 

Mr. COTTON. Well, Mr. Chairman, I think the bill is critically important, and I think, if I can speak on behalf of all of the sectors 

who are members of the Coalition Against Counterfeiting and Piracy, I can report to you that every single sector has reported in 

our deliberations that the problem of counterfeiting is getting 

worse, not better. 

And it is against that background that I think the reforms contained in your bill are so critically important. It is clear that if enforcement of laws with respect to counterfeiting and piracy are left 

to law enforcement officers of general authority, given the history 

here, they simply fall to the bottom of the priority list. 

So, I think that the dedicated leadership and the itemization of 

specific dedicated agents to IP enforcement is critically important. 

So point one I would make, is that I think that right now the bill 

mandates 10 at 10 ports. I think that having specialized resources 

at all of the high-volume ports would be very important. 

The second point, which again the bill addresses, is I think we 

are not going to make progress in this area without enhanced technology. I think words and enforcement resources not backed up by 

technology, in terms of being able to separate shipments that need 

inspection from those that do not, without that, it is simply not 

likely that we are going to make progress. 

So, I think all of the emphasis on technology and on cooperation 

between Customs and the private sector is critically important. 

The third point I would make is that the Joint Strategic Plan 

that the bill contains right now, I think is excellent, because what 

is needed is a strategic approach and a smart approach to these 

issues. I would simply urge, in the bill, that there be clarification 

that the strategic elements which are currently, in general, identified with respect to broad enforcement of trade provisions, that 

there be a specific subset of the Joint Strategic Plan which addresses each of the critical elements in terms of technology, in terms of 

cooperation with the private sector, in terms of transfer of best 

practices, which is an observation that the GAO made that is not 

taking place today. The imposition and the requirement on CBP 

and ICE to think about these issues strategically and report to the 

committee and the Congress on that would be critically important. 

The fourth point I would make, which actually is a point that I 

think has come out in conversations, frankly, with some CBP personnel themselves, is that, on the terrorism side and the security 

side, the thought process is to make our borders the last line of defense, not the first line of defense. 

I think that that same strategic approach to the issue of counterfeiting and the protection of IP would really represent a major step 

forward, so that the investigative resources in terms of identifying 

shippers, identifying warehousers, identifying importers, and enabling ICE to investigate those essentially from start to finish, so 

that you identify those before they reach our borders and scrutinize 

those shipments coming from suspicious sources or going to suspicious receivers, would be a major advance in terms of the investigative approach to IP crime. 

The CHAIRMAN. All right. 

Mr. Sherman? 

13 

Mr. SHERMAN. Yes, Senator. I think this absolutely will help, and 

I think that it addresses one of our major concerns, and that is predictability. Over the last several years, we have had our hands full 

as importers with things that we all know we need to do to deal 

with security issues, safety, things like the Lacey Act, and one of 

the things that has been challenging is that, at times, there has 

not been that situational awareness of everything importers are 

dealing with. New initiatives are introduced, for example, to 

change the Rules of Origin, do away with First Sale, and that is 

very difficult to administer with limited resources. 

And so, to the extent we could have greater visibility to what 

changes are contemplated, better predictability, that will be very 

beneficial. One thing I think that could be emphasized more in the 

bill, potentially, is this new facilitation program could eventually 

become a springboard to true account-based processing where we 

move away from this transaction-by-transaction interaction with 

government agencies and move towards a more holistic accountbased approach where we would periodically provide information. 

The CHAIRMAN. Well, my time has expired to spare. I will get to 

you, Ms. Comstock, next time around. 

Senator Grassley? 

Senator GRASSLEY. Mr. Sherman? I would like to have you describe some of the biggest challenges that Target has faced over the 

past few years. I guess you are one of the largest U.S. importers. 

I should probably know that for sure. By the way, you have a big 

facility in Cedar Falls, IA. 

Mr. SHERMAN. Yes, Senator. A couple of them. 

Senator GRASSLEY. Thank you for putting that there. I wish I 

had something to do with it getting there. [Laughter.] 

Could you identify, then, provisions in our bill that would address or mitigate some of these challenges? Parallel to that, could 

you identify improvements that might be needed to address and 

mitigate some of these challenges? 

Mr. SHERMAN. Thank you, Senator. I touched on it briefly a moment ago. It is the lack of predictability. If you really look at what 

happened over the last, say, 3 to 4 years, right when we are in the 

throes of trying to work on the importer security filing, we had this 

potential doing away with the first-sale rule. 

Then we were working through the Lacey Act and the Consumer 

Product Safety Improvement Act, and then we had to deal with the 

potential change in Rules of Origin. And in any big importer, it is 

the same people working on all of those issues. It is the same skill 

set, the same people, who have to direct their attention away from 

Importer Security Filing for a while to go figure out the impact of 

Rules of Origin. 

And so, to the extent there could be more coordination and more 

situational awareness of all the rules at any given time, the 

changes that are being contemplated so that we could all get on the 

same page. If you have any hope of executing these, that would be 

very helpful. To the extent that kind of oversight is in the bill, it 

is very much appreciated. 

So to the extent that could be firmed up, and again, carrying forward in the automation efforts, things like ACE, ITDS, and the 

14 

move towards account-based processing would be very, very helpful 

in overcoming a lot of these challenges. 

Senator GRASSLEY. All right. Then, for Ms. Comstock, but I 

would like to have Mr. Cotton listen to what Ms. Comstock says, 

and then maybe you could add to it. 

You raised concerns with respect to section 234, which would require CBP to maintain a confidential list of persons who repeatedly 

attempt to import goods that infringe intellectual property into our 

country. CBP is then directed to use the information in its commercial targeting methodologies. 

In your view, could this provision be improved by adding an intent requirement? In other words, what if the provision required 

CBP to maintain a confidential list of persons who repeatedly attempt to import goods into the United States, knowing that such 

goods infringe upon intellectual property rights? Will that change 

address your concerns? 

Ms. COMSTOCK. Yes, Senator. I think it would. 

I think that the bottom line is, for UPS and many of our counterparts, whether they are small, medium or large customs brokers or 

couriers, we are hired to facilitate trade. We carry goods, we help 

goods move across the border. We do not buy the goods, we do not 

sell the goods, we often do not know the contents. In fact, we normally, other than the declaration on the paperwork that we receive, do not know the contents of the package. 

So, if there is an infringed copyrighted article in a package and 

it simply says it is a teddy bear, we do not know that it is an 

infringed-upon article. We would like to work with Customs and 

Border Protection, and we would like to help get rid of the bad actors that are out there. I think having a willful knowledge and intent added to the bill would probably alleviate many of our concerns. 

Senator GRASSLEY. Now, Mr. Cotton, you have a little different 

product that you are having infringed upon. Do you have a view, 

in addition, or agreement with, Ms. Comstock? 

Mr. COTTON. I would begin by saying that I think it is important 

that the criteria by which individuals or our shippers are put on 

such a list be clear. But I think such a list is critical if we are asking CBP to act smarter, so that there is a clear set, there is a black 

list and there is a white list in terms of being able to distinguish 

between shippers that have had a bad record, others who have had 

a bad record, and those who are clearly trusted and whose shipments can move through ports quickly. 

I think the one question that deserves some attention, which is 

one that I think we face throughout the economy, is that there are 

many sectors which are intermediary sectors, which are infrastructure companies which are the bloodlines, the arteries through 

which our commerce flows. 

And what we are seeking here in terms of supply chain and in 

terms of those sectors, is that they not facilitate the easy distribution of counterfeit goods and, therefore, my best analogy here is 

money laundering, which is that we do impose on banks and other 

financial institutions the obligations to know their customers. It is 

not acceptable simply for banks to receive cash from anyone who 

15 

walks in the door without certain reporting requirements and without certain investigation requirements. 

So, I think, in general, in the question of what would the eligibility requirement extend to, it probably should be based on experience. It should be based on some sense that there is a repeated 

issue of Customs identifying counterfeit goods coming from particular shippers or others. So I think that knowing requirement is 

not unreasonable, but it should be informed by the fact that it 

should not also permit a see-no-evil, hear-no-evil, simply take-themoney-and-run approach to facilitating shipments over the border. 

Stopping counterfeiting really has to become some degree of best 

practices on the part of importers-exporters to take commercially 

reasonable steps. No one is asking for people to do things that are 

unreasonable, but there should be some degree of effort to ensure 

that no one is easily or simply closing their eyes to obvious counterfeiting practices. 

Senator GRASSLEY. Mr. Chairman, I am going to submit the rest 

of my questions for answering in writing. 

The CHAIRMAN. Thank you, Senator. 

[The questions appear in the appendix.] 

The CHAIRMAN. Senator Wyden? 

OPENING STATEMENT OF HON. RON WYDEN, 

A U.S. SENATOR FROM OREGON 

Senator WYDEN. Thank you, Mr. Chairman. 

Mr. Chairman, I strongly endorse this bill. I think it is a very, 

very important bill, and your legislation, if anything, is even more 

timely given what Mr. Bernanke said yesterday when he was talking about the trade imbalance. So, you will have my strong support. 

Folks in the Pacific Northwest, Mr. Chairman, are also concerned 

about intellectual property rights, if we could work with you in that 

area. American innovators and entrepreneurs are concerned that 

they are getting ripped off by people who are trying to skirt the 

trade laws because they cannot create anything on their own. 

If we could work with you on the computer processor issues, Customs sharing information with innovators about potential fake exports, and also some of the questions relating to patents, that 

would be great. 

I think it is a very important bill and look forward to working 

closely with you and getting it passed just as soon as we can. 

Mr. CHAIRMAN. Good. 

Senator WYDEN. Mr. Chairman, just a question, if I could, for the 

panel. 

I think one of the parts of the trade debate that always baffles 

me is, we are always about tariffs. So much of the discussion comes 

back to the question of tariffs, and saying something is duty-free 

is not all that important if you cannot get goods in and out of the 

country because of unnecessary administrative hurdles, and so 

often you have all of these varied and sundry trade barriers, and 

those issues simply are not recognized. 

Now, I read the written testimony last night, and my sense 

was—and we can just go right on down the row—that each of you 

16 

believes that this bill will significantly make it easier to facilitate 

the movement of goods in the international trade area. 

Is that correct? Anybody disagree with that? 

[No response.] 

Senator WYDEN. All right. Good. 

Now, with respect to the borders, can you give us some ideas 

about steps that we could take to reduce time-in-transit costs to 

our exporters? And, I think, let us have, for purposes of this question, Ms. Comstock, perhaps you and Mr. Sherman could give us 

your suggestions with respect to steps we could take to reduce 

time-in-transit costs to exporters. 

Ms. COMSTOCK. Well, thank you. Time-in-transit costs to exporters are exponential depending upon where the goods originate, 

what countries they have to pass through, and how they move into 

the United States. I am on the northern border, so you could get 

in your vehicle in Calgary, Alberta, with a truckload of oil field 

equipment, and head to Sweet Grass, MT, and probably cross the 

border within a matter of 25 or 30 minutes. That is not true at 

other ports of entry. 

One of the things that has occurred, at least on the borders, is 

that early on Customs was able to roll out e-manifest for the truck 

mode of transportation. Therefore, we have electronic manifest reporting occurring on the borders, both the northern and the southern borders, and we have electronic filing of entries. So, those 

marry up together. Customs can do their targeting, their risk assessments, be able to determine whether to examine the goods, and 

move the cargo fairly quickly. 

I do not think that is the case in the air and ocean environment, 

simply because there is not a multi-modal manifest situation out 

there yet. And I am hoping that when multi-modal manifest—and 

they have to pick up the rail manifest as well—once those things 

get married up with the brokers’ entries, or the importers’ own entries, I think that will help facilitate trade movement. 

Senator WYDEN. Good point. Time matters, and especially for us 

in the West. 

Mr. Sherman? 

Mr. SHERMAN. Senator, given the diversity of products that we 

import, my thinking on this is that, to the extent that the methods 

of communication and the standards on the part of different government agencies that regulate trade at the border, to the extent 

that those could be harmonized and automated and made as much 

as possible one process and one single window that importers have 

to use to bring merchandise into the country, off the top of my 

head, I think that is the thing that would be the most helpful to 

increase the speed of merchandise flow. 

Senator WYDEN. I think that makes a lot of sense, to the extent 

you can harmonize or standardize these kinds of concerns. That is 

what I hear our shippers and traders talking about again and 

again. 

Would either of the other two of you like to comment on it? I do 

not want to coerce you into it. I thought the comments of Ms. Comstock and Mr. Sherman were very good. Would either of the other 

witnesses like to comment on that? 

17 

Mr. COOK. I would be happy to. If you look at it as an exporter 

out of the U.S., there are two ideas. One is certainly running the 

ports 24 hours, 7 days a week, would reduce the infrastructure 

cost, but it would also let trade move. A lot of trade becomes idle 

at night because things tend to work only in banking hours. 

The other is to give small, medium, and even the large size, a 

single Customs bond that works around the world. That would be 

a great facilitator that then mandates with other countries if they 

let those goods in and have direct delivery. 

Senator WYDEN. My time is up. 

The CHAIRMAN. Go ahead, Senator. 

Senator WYDEN. Yes, please? 

Mr. COTTON. I would just offer, just very briefly, that our concern 

in terms of the coalition is on IP enforcement, but we think that 

would be enormously enhanced by smarter-working, better technology, really all of the recommendations that the other witnesses 

have made, so that Customs concentrates on what are the problem 

shipments and allows the trusted shipments to get through more 

expeditiously. 

Senator WYDEN. Very good. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

On that point, how do you distinguish between the trusted shipments and those that are not trusted? I suppose that Homeland Security works on that on the security side. I am just curious what 

that might be. How do you implement that with goods on the Customs side? 

Mr. COTTON. Our reaction really has two points. One is what is 

in the bill, which is the creation of two lists in terms of entities 

that have a bad history, and on the other hand, companies and operations that have an excellent history and live up to certain security and other commitments, so that you do wind up with clarity 

in terms of being able to move shipments from a trusted shipper 

quickly, while you focus your efforts on shippers that have a checkered history. And I would say that, if one could move in that direction quickly, one would make a huge impact. I have to say, I have 

participated in many international conversations where that is a 

big, big element of the discussion. 

I think the second point, the big point here, is technology. That 

underlies everything in the web-enabled world that we currently 

inhabit in terms of the RFID technologies that exist where one has 

to move over time to technology-based authentication techniques, 

which involve cooperation between the private sector and Customs, 

where the ability of Customs quickly to authenticate shipments 

and distinguish those that clearly have a good pedigree from those 

that either have none or a bad pedigree, really has to be technology-based. 

So, our suggestion, as in particular, again, in terms of the strategic plan that the Baucus-Grassley bill envisions, is a heavy emphasis on what are the technology tools, and there are many in 

process that exist, and strategically looking forward, what would 

enable one really to get at exactly the question, Chairman Baucus, 

that you asked, which is technologically being able to identify 

trusted shipments from those that are not. 

18 

The CHAIRMAN. Well, the thought is that the additional emphasis 

in this bill on the Principal Commissioner, and also we pointed out 

other targeted areas—that will more likely happen than not. 

Mr. COTTON. I think with high-level leadership that is focused on 

acting smart, acting strategically, and employing technology that 

exists today, it should happen much more quickly. 

The CHAIRMAN. Ms. Comstock? Would you just address some of 

the unique problems that rural ports have? 

Ms. COMSTOCK. Well, the unique problems of rural ports really 

are that—well, I was visited by some of the staff members from the 

Senate Finance Committee, and one of the things that they asked 

me is, how do you live here? You are from Montana, Senator. You 

understand. We live in a very big State with fewer people than we 

have cattle. 

We have long distances to travel, we have challenges with weather, and we are in remote places, particularly—and I live in one of 

the bigger ports—east of us, and there are some very small ports 

west of Sweet Grass as well. 

Finding Customs officers who are willing to relocate to those 

places when they are from urban areas is a real challenge for the 

U.S. Customs Service. And I think, locally, the people who are 

working in those ports, they have determined, especially the leadership has determined, that, if they can hire people from those remote areas to become Customs officers, they are going to be more 

successful. 

So, there are some real challenges. One of them is in the infrastructure of a big State like Montana. We are fortunate in Sweet 

Grass—we have Interstate 15 that comes right up through there, 

but there are other parts of Montana that do not have the benefit 

of the Interstate system, and so that, in itself, is a challenge moving around the State. 

I hope I have answered your question. 

The CHAIRMAN. You have. Tell me about these pilot projects we 

are setting up. 

Ms. COMSTOCK. The pilot program, as far as the port goes, I really envision it as being able to move goods through multiple ports 

in Montana, and perhaps other States, that do not have the ability 

to move through today. We often, in our day-to-day business in 

Sweet Grass, have customers who want to cross in Wild Horse, MT, 

who want to cross in Morgan, MT, who want to cross in Roosville, 

MT, and those are considered ‘‘permit’’ ports; they are not commercial centers. So we are forcing those people who have goods north 

of those ports to actually go out of their way and funnel down 

through Sweet Grass, MT to be able to enter at a commercial port 

of entry. 

I think that in itself is a barrier, a drawback. Being able to move 

through Wild Horse or Roosville or any of the other ports really facilitates trade. It cuts down on the transit times, it gives the opportunity for Montana to work with Alberta, our largest trading partner, Province-to-State, as well as the U.S. and Canada. 

The CHAIRMAN. Yes. It is very interesting to me. It is quite sad. 

I have gone to some of those borders. They once were open, now 

closed. For example, up in North Fork Flathead. That was just totally closed. Now, you could tell that once was fairly thriving, the 

19 

size of the buildings there at one point. It is just very unfortunate, 

because it does, as you said, restrict trade. 

Ms. COMSTOCK. The other thing I will just point out is that many 

of the facilities that are on the northern border are Customs-owned 

facilities. They are not owned by GSA, and they are in sad need 

of repair. And I do know that the Department of Homeland Security Subcommittee is looking at that as well. 

The CHAIRMAN. Could you just address a little bit the AccountBased Management concept and how that—— 

Ms. COMSTOCK. Sure. Actually, I feel like what Customs started 

in 1994, the Account-Based Management program, really is what 

the committee may be envisioning for the trade facilitation partnership piece. It is there, but it is not well-implemented. 

For example, UPS has an Account Manager with Customs. They 

work with us to provide us information about our compliance rates; 

they provide some raw data that we can analyze to make better decisions on our own compliance needs and our issues. 

I believe that other members of the panel also have a National 

Account Manager. They actually have a lot of tools that they can 

utilize, but they are probably a little overworked in that they have 

a number of clientele and they cannot devote a lot of time to us. 

I think that with Account-Based Management, if the implementation of the COAC recommendations occurred—you could rename 

the program for all I care—I really think it would facilitate trade 

and that you would drive compliance, and that is what the committee, and obviously, all of us, want. 

The CHAIRMAN. Well, thank you all very much. 

We want to promote trade, and that is the whole point of all this. 

We have done our best to draft a bill that accomplishes that purpose. My trade staff and Senator Grassley’s trade staff have 

worked together, talking to a lot people, to try again to achieve 

that. I might say, though, after today’s hearing, the record is going 

to be open for another 10 days, and I am hopeful that you all will 

take advantage of that. 

You know, say what you have to say. This is your shot. We do 

not have many opportunities to pass new trade legislation, and this 

is it. So if you have some new ideas in addition to those you have 

already submitted, or you want to restate something that you have 

already stated, say it again. Sometimes repetition helps, so just 

take advantage. The record is open for 10 more days, and I encourage you to say what you want to say to help make sure we do the 

best job we possibly can. 

Thank you very much. 

The hearing is adjourned. 

[Whereupon, at 11:25 a.m., the hearing was concluded.] 

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66049148.eps