International Mail Security: Costs and Benefits of Using Electronic Data to Screen Mail Need to Be Assessed
Released: 2017-09-07T00:00:00

Letter

Background

Several federal agencies and other entities have responsibility for the movement of inbound international mail and express cargo into the United States. The Universal Postal Union (UPU), a United Nations specialized agency with over 190 member countries, governs the international movement of mail amongst member countries under the Universal Postal Convention. The Department of State (State Department) represents the United States, along with USPS, at the UPU Congress and other UPU meetings, including those at which policies and requirements related to mail security are discussed. As the designated postal operator in the United States, USPS accepts and delivers inbound international mail on behalf of designated postal operators around the world. Inbound international mail generally arrives in the United States via five international service centers (ISC) located in New York City, New York; Miami, Florida; Los Angeles, California; San Francisco, California; and Chicago, Illinois. Ground handlers employed by air carriers transport mail to ISCs, where it is accepted by USPS. In general, USPS is required to present all inbound international mail to CBP for inspection.

Express consignment operators accept items from customers in foreign countries and transport and deliver those items in the United States. For cargo arriving by aircraft, express consignment operators are required to provide EAD to CBP prior to the scheduled arrival of express cargo in the Unites States.

A number of federal agencies are responsible for screening mail and express cargo upon arrival in the United States. Under the Department of Homeland Security, CBP has, among other responsibilities, primary responsibility for enforcing customs and agriculture laws and regulations and for preventing terrorists and their weapons from entering at U.S. ports of entry. As such, CBP operates 328 ports of entry at which it inspects inbound cargo, including express cargo and mail, to enforce laws and regulations while seeking to ensure the safe and efficient flow of goods through U.S. ports of entry. CBP coordinates with other federal agencies—including TSA, the U.S. Postal Inspection Service (USPIS), and the Food and Drug Administration (FDA)—to assess the compliance of inbound items with applicable laws and regulations. For additional information on the above entities as well as others with a role in ensuring the security of inbound international items, see appendix II.

CBP Seizes a Variety of Inbound Items That May Pose Threats to U.S. Security

CBP has identified and seized a variety of inbound international items that may pose a threat to U.S. security, health and safety, business, and ecology. Screening and review to identify illegal and prohibited items may occur either prior to or after the items’ arrival in the United States.

CBP’s highest priority in screening inbound international items is to prevent terrorists and their weapons—including hazardous materials or weapons that may threaten the safety of airline passengers and crew— from entering the United States. Generally, measures to identify these types of threats occur prior to items arriving in the United States. For example, in 2010, individuals located in Yemen with ties to al Qaida attempted to ship explosive devices in express cargo on-board aircraft destined for the United States. Those items were identified and intercepted before reaching the United States. According to CBP, while no additional attempted attacks of that nature have been reported since, CBP has identified a substantial number of air cargo shipments that have potential ties to terrorism and that therefore may represent a threat.

CBP inspects mail and express cargo arriving in the United States and seizes illegal goods, including those that may pose threats to health and safety, ecology, and U.S. businesses. According to data from CBP’s Seized Asset and Case Tracking System (SEACATS), during fiscal years 2012 through 2016 CBP conducted about 308,000 seizures of threatening or illegal goods in inbound international items. Of those, CBP seized about 70 percent from mail and 30 percent from express cargo (see fig. 1). This does not necessarily indicate a higher rate of seizures from mail compared to express cargo, as seizure rates may be affected by differences in inbound volume among mail and express cargo, as well as differences in CBP inspection processes for each, as discussed later in this report. Seized items are categorized in SEACATS as either drugs or merchandise.

Drugs: Illegal or inadmissible drugs accounted for about 47 percent of total seizures from fiscal years 2012 through 2016 and, among those, the top 10 categories are shown in figure 2. Examples of seized drugs are shown in figure 3.

According to testimony by a U.S. Immigration and Customs Enforcement official, a recent increase in deaths related to the synthetic opioid fentanyl has resulted in an increased focus on identifying methods by which traffickers bring fentanyl into the United States. In fiscal years 2012 through 2015, CBP’s seizure data reflect zero seizures of fentanyl, but show 53 such seizures in fiscal year 2016 via both mail and express cargo. According to CBP, a specific category code for fentanyl was added to SEACATS in fiscal year 2016. Prior to that, seizures of fentanyl were captured under other categories in SEACATS.

Merchandise: Merchandise accounted for about 53 percent of total seizures in fiscal years 2012 through 2016. Common categories of goods seized were Cuban cigars, cigarettes, fraudulent identification documents, clothing, footwear, and other counterfeit goods (see fig. 4). CBP may seize merchandise based on several different types of violations. For example, according to SEACATS data, Cuban cigars may violate laws against trading with targeted foreign countries and regimes, including Cuba. CBP generally seizes clothing, footwear, watches, and other counterfeit goods based on laws against trademark infringement (see examples in fig. 5).

According to USPIS and CBP officials, USPIS works with CBP to seize fraudulent mail, such as illegal sweepstakes and lottery schemes. These seizures are tracked in SEACATS, but do not represent a large percentage of seizures. For example, there were approximately 2,000 seizures of illegal lottery mail reported in SEACATS from 2012 through 2016.

CBP also coordinates with the U.S. Department of Agriculture (USDA) to intercept agricultural items including plants and pests that could be harmful to consumers or U.S. agriculture. In fiscal year 2016, CBP reported about 170,000 such interceptions at ports of entry (including mail, express cargo, and other cargo). However, these interceptions may be undercounted in SEACATS. For example, CBP officials stated that if inspection of a package containing many items results in identification of one prohibited agricultural item, CBP would likely intercept only the prohibited item and allow delivery of the rest of the package, so it would not be counted as a seizure.

Express Consignment Operators and USPS Work with CBP to Inspect Inbound International Items, but USPS’s Pilot Programs Lack Assessment Plans

Express Consignment Operators Work with CBP to Screen Inbound International Items

Express consignment operators accept items for delivery to the United States at points of sale in foreign countries and maintain control of items until they are delivered to addressees in the United States. Express cargo undergoes screening at various points as required, including before and after it arrives in the United States. (see fig. 6).

As a result of their control over the collection of EAD, express consignment operators are able to provide EAD to CBP at two different stages: (1) prior to loading items on aircraft at foreign airports under the currently voluntary Air Cargo Advance Screening (ACAS) pilot and (2) prior to items’ scheduled arrival in the United States: 1. CBP and TSA have established the Air Cargo Advance Screening (ACAS) pilot project to receive EAD from participating air carriers on cargo bound for the United States as a means to identify cargo that may have a catastrophic impact on the aircraft prior to being loaded onto that aircraft. Under the pilot, passenger air carriers, freight forwarders, and all-cargo air carriers voluntarily send EAD for air cargo to CBP. CBP and TSA review EAD under the ACAS pilot prior to the cargo’s being loaded onto the aircraft and conduct analyses only to identify threats to aviation security—not threats to, for example, public health, ecology, and U.S. businesses. Additionally, the ACAS pilot does not include inbound international mail. 2. All cargo carriers, including those transporting express cargo, are required to provide EAD to CBP for all inbound cargo arriving by aircraft prior to its scheduled arrival in the United States.

As express consignment operators unload and process express cargo in the United States, items are routed based on the results of CBP’s analysis of EAD. CBP and other federal agencies each separately determine which arriving shipment items should be inspected. Express consignment operators scan each item as it is unloaded and, depending on the results of the scan, route items for CBP or other inspection, for other review including brokerage assessment, or to be processed for delivery. CBP officials told us that analysis of EAD is only one tool among many that help CBP identify threats in inbound international express cargo items. For example, even with access to EAD, CBP officials stated that they conduct random inspections in order to identify new trends.

USPS Coordinates with CBP to Screen Inbound International Mail, but Has Not Established Performance Targets for Pilot Programs

USPS and CBP Screening Processes

As mail arrives in the United States, USPS takes possession of the mail and presents it to CBP for inspection. Mail undergoes screening at various steps as required, including before and after it arrives in the United States (see fig. 7).

At each location, CBP determines which mail it inspects based on risk determinations made by CBP. Additionally, CBP officials may target mail based on intelligence and characteristics resulting from past experiences and seizures. As such, CBP officials at each ISC may use different criteria to target and inspect different types of mail. At all five ISC locations, USPS and CBP officials stated that they meet and communicate regularly to discuss logistics and that they generally have a good working relationship. For example, during the holiday season, CBP and USPS officials coordinate to establish expanded operating hours to accommodate the increase in mail volume.

USPS and CBP described challenges in screening mail: Increase in Mail Volume: USPS reported a 54 percent increase in inbound international mail volume from fiscal year 2012 to fiscal year 2016, an increase that, according to USPS and CBP officials, has presented a challenge for USPS and CBP to process and inspect mail. USPS receives inbound mail from foreign postal operators in various types of receptacles—including sacks and bins—that are scanned as they are accepted at the ISCs. Each receptacle may, in turn, contain many (in some cases hundreds) individual pieces of mail. As shown in figure 8, for example, the ISCs may receive thousands of large sacks of mail—transported via large pallets or dollies—per day. USPS and CBP officials at one ISC told us that, because the volume of mail has increased in recent years, CBP asked USPS to sort mail in a manner that will allow CBP to focus on items they consider to be higher risk. According to USPS officials, they are currently developing an automated system to sort mail per CBP’s preference, as manual sorting was too time consuming.

Presentation of Mail: The USPS Office of Inspector General (OIG) recently found that at one ISC, USPS did not consistently present all mail to CBP as required. CBP officials we spoke with generally said they believe USPS is trying to follow requirements for presenting mail, but CBP officials at two ISCs said that there are occasional lapses. In response to the OIG’s finding, USPS management stated that they had clarified requirements with CBP officials, issued new procedures, and provided training and instructions for employees. Additionally, USPS and CBP are developing a memorandum of understanding (MOU) that is intended to detail the work methods and processing procedures for presenting mail to CBP. According to officials, CBP is hopeful that the MOU will be completed by December 31, 2017.

USPS’s Efforts to Obtain EAD

Unlike express consignment operators, USPS is not currently required to provide CBP with EAD for inbound international mail and does not have control over mail prior to its arrival in the United States. Thus, USPS relies on foreign postal operators to collect and provide EAD voluntarily or by mutual agreement. According to USPS data, USPS received EAD for about one third of all inbound international mail (excluding letters, flats, and military/diplomatic mail) for the period from April 2016 through March 2017.The most recently available data for the month of March 2017 indicate that EAD was unavailable for roughly half of all inbound international mail (excluding letters, flats, and military/diplomatic mail).

While USPS takes part in data-sharing agreements involving over 30 countries to obtain EAD for several types of mail, the agreements do not currently cover EAD for all products or necessarily require participating countries to provide EAD. According to USPS officials, they participate in two types of data-sharing agreements: (1) agreements that establish standards for, but do not require, data sharing; and (2) agreements that establish rates for specific types of mail and require participants to provide EAD for mail covered under the agreements. Even for products covered under agreements that establish data-sharing requirements, USPS does not receive EAD for all covered inbound mail. USPS stated several reasons foreign postal operators may not share EAD for mail covered under EAD-sharing agreements, including:

The foreign postal operator, or some of its retail outlets, may not have the technology infrastructure to collect and transmit EAD to USPS.

The foreign postal operator has focused on providing EAD only for a certain type of mail (such as commercial versus retail).

The costs of collecting and transmitting EAD are prohibitive or not justified by the small amount of mail.

According to USPS officials, as foreign postal operators with which USPS has established binding data-sharing agreements make progress in fulfilling obligations to share EAD, USPS officials plan to monitor progress and use appropriate contractual remedies if they determine there is a breach of contract.

USPS’s and CBP’s Pilot Programs Lack Performance Targets

In 2014 and 2015, USPS and CBP initiated two pilot programs at the New York ISC to target certain mail for inspection using some of the EAD obtained under data-sharing agreements with foreign postal operators. According to USPS documents, the goal of these pilots is to test the effectiveness of placing holds on mail that has been targeted based on EAD. Currently, CBP does not use EAD to target mail for inspection outside of these pilots.

In the first pilot (Pilot 1), USPS agreed to provide EAD to CBP for certain mail from a country with a small mail volume. CBP targets an average of five pieces of mail per day for USPS to provide to CBP for inspection.

In the second pilot (Pilot 2), USPS provides CBP with EAD on certain mail from a country with a large mail volume, from which CBP targets an average of 10 pieces of mail each day for USPS to locate and provide for inspection.

According to USPS officials, when USPS employees scan either individual targeted pieces or larger sacks containing targeted mail, they are alerted to the CBP hold and set it aside for inspection. USPS provided information on the implementation costs for these pilots thus far, though further costs could be incurred as USPS identifies solutions to address challenges: $1.8 million for information technology upgrades to exchange $75,000 annually in personnel costs related to identifying and providing targeted mail to CBP, and $1.3 million to upgrade mail receptacle scanning technology.

Since each pilot began, USPS has made efforts to locate and provide CBP with the targeted mail. For these pilots, CBP has collected performance data on the percentage of targeted mail USPS has provided for inspection as well as the percentage of inspected mail seized. According to GAO’s analysis of available data on the percentage of targeted mail provided for inspection:

For Pilot 1, for the period from July 2014 through January 2017 (the time period for which these data were available), USPS provided about 82 percent of targeted mail for inspection.

For Pilot 2, for the period from November 2015 through December of 2016 (the time period for which these data were available), USPS provided approximately 58 percent of targeted mail for inspection.

These percentages reflect a rolling average of targeted mail provided for inspection during this period and percentages vary substantially from month to month. As discussed below, USPS is currently testing methods for identifying targeted mail that may improve their ability to provide targeted mail to CBP.

According to USPS and CBP, USPS has been unable to provide some targeted mail for inspection because locating targeted mail once it arrives at an ISC has been a challenge. As discussed earlier, each sack may contain hundreds of pieces of mail that are not individually scanned upon arrival, so locating a targeted item requires manually sorting through the entire sack, and USPS employees may overlook the item while sorting through the larger sack to locate targeted mail. According to USPS officials, they are currently testing an automated method to identify targeted mail within these larger sacks.

Another challenge that USPS officials identified in implementing the pilots is that USPS relies on data from foreign postal operators on which pieces of mail are contained in each sack or receptacle, which may be inaccurate. As such, USPS may not be able to locate targeted mail because (1) the item was actually located in a sack that had already been processed or (2) the item is located in a sack that has not yet arrived in the United States. USPS officials stated that if the sack containing targeted mail is not set aside as sacks are scanned—before sacks are opened and emptied—USPS is unlikely to identify individual pieces of mail again until they are individually scanned; either at delivery or as they move between post offices. According to USPS officials, they are currently collecting data to better understand this problem.

Standards for Internal Control in the Federal Government states that defining program goals in specific and measurable terms allows for the assessment of performance toward achieving objectives. As stated by USPS, the goal of these pilots is to test the effectiveness of placing holds on mail that has been targeted based on EAD.

However, USPS and CBP have not defined the goal for these pilots in specific and measurable terms. While USPS and CBP have collected some performance information for these pilots, including the percentage of targeted mail identified and provided to CBP, this information is not linked to a specific performance target agreed upon by USPS and CBP— such as a specific percentage of targeted mail provided to CBP for inspection. Further, the agencies have not conducted an analysis to determine if the pilot programs are achieving the desired outcomes. In November 2016, USPS officials told us they were planning to expand the pilots to other ISCs to include additional products and mail from other countries—and CBP headquarters officials stated that the expansion would happen as early as that month for one ISC. However, as of February 2017, CBP officials involved in the pilot did not agree that it was ready for expansion based on USPS’s frequent inability to provide targeted mail to CBP for inspection. The CBP officials estimated that to expand the pilot, they would want USPS to be able to locate close to 100 percent of the targeted mail. CBP headquarters officials stated in June 2017 that they would consider the pilots to be successful if USPS provided more than 95 percent of targeted mail for inspection.

Because USPS and CBP have not agreed to specific performance goals or targets, it is difficult to make well-informed decisions regarding the possible expansion of these pilots in the future. Without established performance goals against which the success of the pilots are to be evaluated, USPS and CBP may risk using resources to expand or implement a program that may not further efforts to provide targeted mail to CBP for inspection.

Various Options for Obtaining Electronic Advance Data Pose Trade-offs, but Costs and Benefits of Using Data Are Unclear

USPS and State Department Officials Identified Options to Obtain More Electronic Advance Data and Related Considerations

USPS and State Department officials identified three options to obtain more EAD, as well as potential tradeoffs associated with each.

Strategically pursue additional agreements with foreign postal operators to provide EAD: The USPS OIG recently recommended that USPS pursue collection of additional EAD in future bilateral agreements with foreign postal operators based on USPS and CBP recognition of the importance of EAD in targeting mail for inspection. USPS has been pursuing this option in recent years, as discussed above, and, according to USPS officials, is currently negotiating with several additional countries to reach agreements on providing EAD. USPS officials stated that in future negotiations, their intention is to establish binding bilateral data- sharing agreements, rather than agreements that establish standards for, but do not require, data sharing. In addition, according to a State Department official with responsibility for international postal policy, the Department is considering elevating the issue of mail security and related agreements into the diplomatic arena, a step that could have the effect of prioritizing this issue, though USPS would continue to lead negotiations with foreign postal operators. According to USPS officials, this option could result in availability of EAD for a large percentage of inbound mail if the focus is on negotiating with large-volume countries.

However, using this option, USPS and CBP would still be dependent on foreign postal operators to provide data voluntarily or by mutual agreement. Additionally, according to USPS officials—even if they participate in a data-sharing agreement with USPS—foreign postal operators retain the ability to send mail without EAD to the United States under standard Universal Postal Union (UPU) requirements (USPS stated that foreign postal operators might not provide EAD as established in agreements for a variety of reasons, as discussed above). Further, according to a State Department official, establishing data-sharing agreements with some countries may present privacy concerns. According to the official, some of the countries that are most eager to exchange EAD tend to be countries that have an interest in surveilling their citizens. Conversely, the official stated that some countries are concerned about collecting the personal information of citizens and are reluctant to enter into agreements for sharing EAD.

Pursue EAD requirements through the Universal Postal Union: During the 2016 UPU Congress, member countries agreed to changes—including future requirements for barcodes on small packets—that have laid the groundwork for EAD requirements in the future. The United States drives this effort as joint chair with India on a UPU committee focused on issues related to security, customs, transportation, and standards. Additionally, USPS officials told us they are participating—along with 52 other postal operators—in a UPU program designed to increase transmission of EAD for e-commerce shipments. According to a State Department official, changes to UPU requirements could result in more universal adoption of EAD collection than current efforts to establish data- sharing agreements. The official also stated that while adoption of universal EAD requirements may occur incrementally over many years, the data-sharing standards and tools that are currently being developed through this UPU process could provide countries with capacity-building resources that would not be available to them outside of a UPU-driven process (in a bilateral negotiation, for example). However, State Department and USPS officials stated that universal adoption of EAD requirements through the UPU will likely take many years because many foreign postal operators lack the infrastructure and capacity to collect EAD and it is unclear how willing some countries are to build that capacity.

Legally Require Collection of EAD: On February 14, 2017, versions of the Synthetics Trafficking and Overdose Prevention Act of 2017 (STOP Act) were introduced in both the House of Representatives and the U.S. Senate. The STOP Act bills, if passed, would require that all inbound international mail—those items USPS receives from foreign postal operators—be accompanied by EAD, which would be provided to CBP for analysis. The bills would also authorize the collection of an additional customs fee as well as establish penalties for non-compliance. According to a State Department official, the requirements in the two pending bills could cause some countries to provide EAD to USPS. However, according to USPS and State Department officials, many countries do not currently have the ability to carry out the provisions in the bills. As a result, the officials stated that the requirement would likely result in a temporary disruption to the flow of inbound international mail and commerce and potentially result in a long-term halt to the flow of mail from some countries. Additionally, the officials stated that the proposed requirement could have implications related to USPS participation in the UPU and, thus, the exchange of mail between the United States and UPU member countries.

USPS and CBP Have Not Evaluated Relative Costs and Benefits of Increased Use of Electronic Advance Data

According to USPS and CBP officials, increasing the use of EAD to target mail for inspection may have benefits, such as reducing the volume of inspected mail and increasing the percentage of inspections that result in identification of a threatening or illegal item. This potential outcome could decrease time and resources needed for the screening process— potentially decreasing costs—and may increase the security of inbound mail. However, the costs of collecting and implementing the use of EAD are not yet known and neither USPS nor CPB currently collect the data necessary to know whether using EAD might increase the security of inbound mail or decrease the time and costs associated with screening.

Regarding the costs of collecting EAD, USPS has not calculated the current costs of collecting EAD from countries with which USPS has data- sharing agreements, but USPS officials stated that USPS does not incur significant additional costs for each new designated postal operator or type of mail for which USPS begins collecting EAD. While some of the costs of obtaining EAD may be borne by designated postal operators in other countries, rather than directly by USPS, costs to USPS to use EAD to target mail for inspection may include:

Equipment and personnel required to identify targeted mail (such as equipment required to sort through hundreds of pieces of mail to identify a single piece of mail): For example, USPS estimated that the cost for software upgrades needed for Pilots 1 and 2 (currently the only efforts USPS and CBP have underway to use EAD to target mail for inspection) to identify individual pieces of mail within larger sacks was about $150,000. This technology is currently being tested—so any further costs are unknown—but USPS officials stated that it will be included as a part of these pilots if they are expanded to other ISCs.

Software upgrades required to exchange data with foreign postal operators and with CBP: USPS officials stated, as noted above, that developing the technological capability to receive and utilize EAD from foreign posts related to Pilots 1 and 2 cost about $1.8 million.

An analysis of the costs associated with planned efforts is particularly critical given USPS’s financial challenges. As we recently found, USPS reported a net loss of $5.6 billion in fiscal year 2016—its 10th consecutive year of net losses. We have reported that USPS urgently needs to restructure to align its costs with revenues. In light of this situation, any expenditure of financial resources to make any additional infrastructure and information technology upgrades necessary to implement the use of EAD for targeting merit careful consideration.

Beyond costs, USPS and CBP have not performed an analysis of the benefits of using EAD to target mail for inspection, including the effectiveness of targeted inspection based on EAD relative to other methods of selecting mail for inspection. Thus, the extent to which targeting based on EAD might result in an increased ability to identify threats or other benefits over current methods is unknown. For example, CBP has collected data on the percent of inspections resulting in a seizure for mail inspected as a result of targeting in Pilots 1 and 2. However, CBP does not collect comparable data for seizures resulting from inspections conducted based on current methods of choosing mail for inspection.

Although CBP has been using EAD to target express cargo for inspection since approximately 2004, it has not evaluated whether this method results in benefits relative to other methods of choosing express cargo, or cargo more generally, for inspection. We recently reported that CBP generally lacks targets for its trade enforcement activities, which include targeting inbound items for inspection. We found that this may impede CBP’s ability to assess the effectiveness of those activities, and recommended that CBP develop such targets.

Moreover, USPS and CBP experience challenges related to inspecting mail that may limit their ability to effectively use EAD to target mail for screening, and, thus, to experience EAD’s possible benefits. For example, in discussing the implementation of Pilots 1 and 2, USPS and CBP officials described several challenges:

High inbound international mail volumes may make individual scanning time consuming and possibly impractical. According to CBP data, there were about 571-million inbound international air-cargo packages in fiscal year 2016, of which express cargo would account for only a portion. Comparatively, USPS alone accepted about 621 million pieces of inbound international mail in fiscal year 2016. According to representatives we spoke to from express consignment operators, they are able to individually scan each item upon arrival, providing an opportunity to identify and set aside express cargo targeted for CBP inspection based on EAD. Conversely, individually scanning hundreds of millions of pieces of mail may limit USPS’ ability to process mail in a timely manner or could require additional personnel and resources.

USPS depends on foreign postal operators, which, according to USPS and State Department officials, may not share the same security priorities as USPS and CBP, to make EAD available. In March 2017, including countries with which USPS has agreed to share EAD, USPS received EAD for roughly half of inbound mail. Further, lack of control over data collection may result in lower quality and/or reliability of EAD, as compared to that collected by express consignment operators. As such, while CBP has access to EAD for express cargo as a result of the Trade Act of 2002, obtaining EAD for mail may present substantial challenges, as discussed earlier. If the amount of available EAD remains limited for inbound mail, this may limit the effectiveness of CBP’s targeting efforts or could limit CBP’s ability to reduce the volume of mail it inspects.

Our prior work has found that, in designing preventive measures—such as the screening of inbound mail to identify potential threats—it is helpful to conduct a thorough assessment of vulnerabilities as well as cost- benefit analyses of alternative strategies. In the absence of information on the relative costs of various methods of selecting mail for inspection— including the use of EAD to target mail—as well as their effectiveness at identifying potential threats in inbound mail, USPS and CBP are unable to fully understand whether obtaining additional EAD for targeting purposes will provide security or resource benefits.

Conclusions

Protecting the U.S. citizens, economy, and ecology from threats in items shipped to the United States as mail and express cargo requires balancing risks to health and safety with maintaining the flow of international shipping. Beyond threats posed by concealed weapons and other hazards, the United States is experiencing an increase in deaths related to the use of fentanyl, an increase that may be exacerbated by drugs arriving from overseas via mail and express cargo. Express consignment operators, USPS, and CBP coordinate to conduct screening of inbound international items after their arrival in the United States and USPS and CBP have implemented pilot programs making limited use of EAD to target mail for inspection. However, because CBP and USPS lack clear performance goals for these pilots, they risk spending additional time and resources expanding them prior to fully assessing the pilots’ success or failure.

Similarly, because USPS and CBP have not conducted an analysis to identify the potential costs and benefits of using EAD for targeting mail in comparison with other methods of choosing mail for inspection, it is unknown whether using EAD would further efforts to identify threats in inbound mail. Particularly in light of the challenges that collecting and using these data present, it is important that CBP and USPS carefully consider actions to enhance inbound international mail security to avoid wasting time and money on potentially ineffective and costly endeavors. As USPS and CBP contemplate the expansion of pilot programs to other ISCs and types of mail, existing pilots could be used as an opportunity for CBP and USPS: (1) to articulate performance goals for the pilots, (2) to collect data and assess the pilots on their success in enabling USPS to provide targeted mail to CBP for inspection, and (3) to assess the costs and benefits of various methods of choosing mail for inspection.

Recommendations for Executive Action

To ensure that current pilot programs related to electronic advance data provide insights that help in assessing USPS’s effectiveness at providing mail targeted by CBP for inspection, the Secretary of Homeland Security should direct the Commissioner of CBP to, in conjunction with USPS, (1) establish measureable performance goals for pilot programs and (2) assess the performance of the pilots in achieving these goals.

To provide information on the costs and benefits of collecting electronic advance data for use in targeting inbound international mail for screening, the Secretary of Homeland Security should direct the Commissioner of CBP to, in conjunction with USPS, evaluate the relative costs and benefits of collecting electronic advance data for targeting mail for inspection in comparison to other methods.

Agency Comments and Our Evaluation

We provided a draft of this report to the U.S. Postal Service and Departments of State and Homeland Security for review and comment.

In its written comments, reproduced in appendix III, DHS concurred with our recommendations and indicated it would coordinate with USPS to implement the recommendations.

In its written comments, reproduced in appendix IV, USPS agreed with our findings and provided updates on the expansion of Pilots 1 and 2 and plans for coordinating with CBP to address our recommendations. USPS stated that it has expanded these pilots to the Los Angeles, California, ISC beginning on June 19, 2017 (after our audit work was completed). In light of this expansion, we believe it will be even more important for USPS and CBP to establish measureable performance goals for these pilots to aid in assessing their performance. Additionally, USPS reiterated the distinctions between USPS and express consignment operators related to USPS’s lack of control over the collection of EAD by foreign postal operators. Nonetheless, USPS affirmed its commitment to increasing the percentage of inbound mail for which EAD is available.

USPS and the Departments of Homeland Security and State also provided technical comments, which we incorporated as appropriate.

As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report’s date. At that time, we will send copies to appropriate congressional committees and the Secretary of Homeland Security, the Postmaster General of the United States, and the Secretary of State. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at 202-512-2834 or rectanusl@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff making key contributions to this report are listed in appendix V.

Appendix I: Objectives, Scope, and Methodology

In this report, we address (1) types of items CBP has seized from mail and express cargo sent to the United States; (2) how inbound international items are inspected as they arrive in the United States; and (3) options to collect electronic advance data for mail and the costs and benefits of using electronic advance data for targeting mail for inspection. Specific details related to the screening process and foreign postal operators that CBP and USPS considered sensitive are not included in this report. Express consignment operators are defined, in general, as those entities moving cargo by special express commercial service under closely integrated administrative control with reliable, timely, door-to-door delivery. Under the Trade Act of 2002, as amended, and implementing regulations, all cargo, including express cargo but not including inbound international mail, is subject to requirements for electronic advance data (EAD).

Despite important differences—including the level of control of shipments at the point of acceptance—the door-to-door delivery provided by express consignment operators is more comparable to services provided by USPS than other cargo services. As such, we have reviewed efforts to screen inbound international mail and express cargo only, and have not included other types of cargo. For the purpose of this report, the term inbound international items will refer to those items handled by USPS and express consignment operators, but does not include non-express cargo shipped to the United States. For the purposes of this report, EAD refers to electronic data collected and shared among postal operators (such as USPS); cargo carriers (such as those transporting express cargo); and customs agencies (such as CBP) in advance of the scheduled arrival of cargo (including mail and express cargo) in the United States for the purpose of identifying inbound international items that may pose a threat to the United States. These data include the sender’s name and address, recipient’s name and address, contents description, number of pieces, and total weight. We use the term ‘screening’ to refer to the process of identifying inbound international items for further inspection. Additionally, in referring to any item handled by USPS—including letters and packages—we use the term ‘mail.’ When referring specifically to items handled by express consignment operators, we use the term ‘express cargo.’ To describe the types of items CBP has seized in mail and express cargo sent to the United States, we reviewed and analyzed CBP data on seizures of mail and express cargo items for fiscal years 2012 through 2016 documented in CBP’s Seized Asset and Case Tracking System (SEACATS). Specifically, we reviewed information on fiscal year, item description, and statute cited as the basis for the seizure. To determine the reliability of SEACATS data for the purposes of this report, we reviewed related documentation; conducted electronic and manual data testing to identify missing data, outliers, and obvious errors; and interviewed appropriate CBP officials about related internal controls and procedures and the limitations of the data. While we found this data to be sufficiently reliable for the purpose of providing contextual information about the types and quantity of threats identified by CBP in inbound international items, we have reported these data after taking into account some limitations, which may affect the reliability of the statistics we report:

About 20,000 of the 308,000 total seizures (about 6.5 percent) cited more than 1 item description or federal statute as the basis of the seizure because shipments containing more than 1 type of item are reported as a single incident. For example, a package containing both cocaine and marijuana would be counted as a single seizure, but would have two separate item descriptions (cocaine and marijuana). The statistics we report account only for the first item description listed. We have not reported seizures by cited federal statute because the first statute cited might not accurately represent the basis of the seizure. For example, the first statute cited in SEACATS may be laws granting CBP the authority to seize prohibited items; while this may be part of the basis for the seizure, it does not illustrate the type of threat that was identified. As a result, the frequencies we report represent the minimum number of seizures in each category.

Nine of the 308,000 total seizures were cited as both drug and merchandise seizures because the associated items contained both drugs and other goods, such as drug paraphernalia. As such, these incidents are counted twice—as both drugs and merchandise.

For about 118,000 of the seizures (about 38 percent), SEACATS data did not include a country of origin because, according to CBP, this field is not mandatory. As a result, we were unable to report seizures by country of origin.

To describe how inbound international items are inspected as they arrive in the United States, we reviewed applicable laws and regulations; USPS and CBP guidance; USPS Office of Inspector General reports; and international mail agreements, including requirements set by the Universal Postal Union (UPU). We conducted site visits to all five USPS International Service Centers (ISC)—the facilities at which USPS receives the majority of inbound international mail to interview officials, observe the CBP inspection process, and identify associated challenges. We interviewed officials from USPS, CBP’s Office of Field Operations and National Targeting Center, and the Transportation Security Administration (TSA) and representatives from the three largest express consignment operators (based on CBP cargo volume data for fiscal year 2015): UPS, FedEx, and DHL.

To describe changes in USPS inbound international volume, we reviewed USPS data on inbound international mail volume. To determine the reliability of these volume data, we interviewed appropriate USPS officials about the systems used to generate the data and related internal controls. We found these data to be reliable for the purpose of describing general trends in USPS inbound international mail volume.

We reviewed available reports, plans, and performance data from fiscal years 2015–2016 related to pilot programs conducted by USPS and CBP using EAD to target mail for inspection for the period from July 2014 through January 2017 (the time period for which data were available). To determine the reliability of performance data related to these pilots, we interviewed appropriate CBP officials about related procedures and the limitations of the data. We found this data to be sufficiently reliable for the purpose of providing information on the current status of the pilots. To assess CBP’s and USPS’s efforts related to these pilots, we compared available documentation on the goals and performance of the pilots to federal internal control standards related to defining program goals. We did not assess the effectiveness of CBP’s screening of inbound international express cargo or mail because that was outside the scope of our review.

To identify options for obtaining additional EAD for inbound mail as well as related considerations, we interviewed officials from USPS and the Department of State and reviewed existing agreements for EAD with foreign postal operators, UPU documents related to the collection and sharing of EAD, and proposed legislation. To identify the benefits and costs of using EAD for targeting mail for inspection, we interviewed officials from USPS and CBP’s Office of Field Operations and National Targeting Center and reviewed related agency performance data and reports, including performance data on the USPS and CBP pilot projects to use EAD to target mail for inspection, as discussed above. We also reviewed information provided by USPS in response to questions about equipment and personnel costs associated with the pilots. To assess USPS’s and CBP’s efforts to collect and implement EAD, we compared these efforts to GAO guidance on program evaluation, including assessing the quality of preventive measures.

We conducted this performance audit from August 2016 through August 2017 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Appendix II: Roles and Responsibilities for Security of International Mail and Express Cargo

A range of federal agencies and other stakeholders have a role in keeping prohibited items from entering the country in international mail and express cargo.

Entities with Responsibility for the Movement of International Mail and Express Cargo

U.S. Postal Service

As the designated postal operator in the United States, the U.S. Postal Service (USPS) accepts and delivers inbound international mail on behalf of foreign postal operators, which generally arrives via five international service centers (ISC) located in New York City, New York; Miami, Florida; Los Angeles, California; San Francisco, California; and Chicago, Illinois in addition to smaller facilities in Hawaii, New Jersey, Puerto Rico, and the U.S. Virgin Islands. USPS is required to present all inbound international mail, with some exceptions, to U.S. Customs and Border Protection (CBP) for inspection.

Universal Postal Union

The international movement of mail amongst member countries is governed under the Universal Postal Convention by the Universal Postal Union (UPU), a United Nations specialized agency with over 190 member countries. The UPU’s mission is “to facilitate communication between the inhabitants of the world.” The UPU facilitates the exchange of international mail by guaranteeing the free circulation of postal items over a single postal territory composed of interconnected networks; creating common standards, including those related to security and electronic advance data (EAD); establishing requirements for freedom of transit and basic services; and establishing the terms of reimbursement for certain services. Reimbursement for these activities (called the “terminal dues” rate) is determined based on each country’s gross national income per capita and the cost for each country’s designated postal operator to deliver mail.

Department of State

The Department of State (State Department) has responsibility for formulation, coordination, and oversight of foreign policy related to international postal services and other international delivery services. As such, the State Department represents the United States, along with USPS, at the UPU Congress and other UPU meetings, including those at which policies and requirements related to mail security are discussed.

Express Consignment Operators

Express consignment operators accept items from customers in foreign countries and transport and deliver those items in the United States. For cargo arriving by aircraft from any foreign port or place in North America, including locations in Mexico, Central America, South America (from north of the equator only), the Caribbean, and Bermuda, air carriers, including those carrying express cargo, are required to provide CBP with electronic advance data (EAD) no later than the time of the departure (“wheels up”) of the aircraft directly to the United States. For cargo arriving by aircraft from other foreign ports, air carriers are required to provide EAD no later than 4 hours prior to the scheduled arrival of items in the United States and to present all inbound items to CBP for inspection.

Federal Agencies with Responsibility for Inspecting Inbound International Mail and Express Cargo

U.S. Customs and Border Protection

Office of Field Operations

Under the Department of Homeland Security, CBP’s Office of Field Operations has, among other responsibilities, primary responsibility for enforcing customs and agriculture laws and regulations and for preventing terrorists and their weapons from entering at U.S. ports of entry. As such, CBP operates 328 ports of entry at which it inspects inbound cargo, including express cargo and mail, to enforce laws and regulations while seeking to ensure the safe and efficient flow of goods through U.S. ports of entry.

National Targeting Center

Under the Department of Homeland Security, CBP’s National Targeting Center (NTC) identifies high-risk people and cargo traveling to the United States prior to their arrival in the United States. The NTC coordinates examination of cargo that may be connected to terrorist or other crimes, such as narcotics smuggling, human trafficking, merchandise counterfeiting, and money laundering.

Transportation Security Administration

As part of its mission to secure the U.S. civil-aviation system, the Transportation Security Administration (TSA) is statutorily required to assess the effectiveness of security measures at foreign airports (1) served by a U.S. air carrier, (2) from which a foreign air carrier serves the United States, or (3) that pose a high risk of introducing danger to international air travel. In addition, TSA has statutory and regulatory authority to regulate security-related matters with respect to U.S. air carriers at airports around the world and foreign air carriers operating from last points of departure airports to the United States. These operations are subject to TSA-approved security program requirements, such as screening of air cargo (including express cargo and non-U.S. Mail) for any unauthorized weapons, explosives, incendiaries, and other destructive devices, items, or substances, prior to loading on the aircraft. TSA inspects these air carrier operations at international locations at least annually to ensure compliance with TSA security program requirements.

U.S. Postal Inspection Service

As the federal law enforcement, crime prevention, and security arm of USPS, the U.S. Postal Inspection Service’s (USPIS) mission is to ensure confidence in the U.S. mail. While USPIS does not have primary responsibility for inspecting inbound international mail, it coordinates with USPS and U.S. Customs and Border Protection to facilitate the inspection of inbound international mail.

Other Federal Agencies

More than 40 federal agencies coordinate with CBP to assess the compliance of inbound items with applicable laws and regulations. For example, the Food and Drug Administration (FDA) reviews pharmaceuticals, cosmetics, medical devices, and other items regulated by the FDA that have been identified in inbound mail and express cargo prior to CBP seizure. Other federal agencies coordinating with CBP in this way include the U.S. Department of Agriculture (USDA) and the Fish and Wildlife Administration.

Appendix III: Comments from the Department of Homeland Security

Appendix IV: Comments from the U.S. Postal Service

Appendix V: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, Derrick Collins, Assistant Director; Katie Hamer, Analyst-In-Charge; Geoff Hamilton; Greg Hanna; Thanh Lu; Amanda Miller; Josh Ormond; Minette Richardson; Rachel Stoiko; and Michelle Weathers made significant contributions to this report.