[Congressional Record Volume 148, Number 123 (Wednesday, September 25, 2002)]
[Senate]
[Pages S9223-S9224]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              COMMERCIAL OPERATIONS OF THE CUSTOMS SERVICE

  Mr. BAUCUS. Mr. President, I am very pleased that the Senate agreed 
last night, by unanimous consent, to adopt an amendment that Senator 
Grassley and I offered to the homeland security bill. Our amendment 
will reinforce the commercial operations of the Customs Service within 
the new Department of Homeland Security.
  A key objective of the homeland security bill is to create coherence 
in law enforcement at our nation's borders. The Customs Service is 
vital to that endeavor. For the vast majority of people entering the 
United States, their first encounter with the U.S. Government is when 
they are cleared by a Customs officer.
  The Customs Service is the principal U.S. Government agency at most 
ports of entry. It enforces a multitude of commercial and other laws on 
behalf of itself and some 40 other Federal agencies. In addition to 
collecting duties, fees, and taxes on imports, Customs assists the 
Census Bureau in collecting trade data; enforces our environmental laws 
by ensuring that products of endangered species are not brought into 
this country; protects U.S. intellectual

[[Page S9224]]

property owners and consumers by barring entry to counterfeit and 
``gray market'' goods; prohibits illegal drugs and other contraband 
from coming into the United States; and enforces numerous other laws.
  It was a Customs inspector who apprehended the so-called millennium 
bomber in Port Angeles, WA in December 1999. Customs also has played a 
major role in putting an end to the scourge of child pornography on the 
Internet and to fighting the war on drugs. Unquestionably, Customs is 
an essential player in law enforcement at our borders and, for this 
reason, ought to be integrated into a new Department of Homeland 
Security. At the same time, we must not forget that the core mission of 
the Customs Service is a commercial mission. Customs is first and 
foremost responsible for the collection of duties, taxes and fees on 
imports. This is one of the oldest functions of the Federal Government. 
It was authorized by the second act of Congress, in July 1789.
  Today, duties collected by Customs constitute the second most 
important source of federal revenues, after the income tax. In fiscal 
year 2001, Customs processed over 25 million formal entries of cargo, 
worth over $1 trillion. Duties, fees, and taxes on that cargo amounted 
to about $20 billion. Thus, Customs' performance of its core commercial 
function is critical as a source of revenue to the U.S. Government. 
Customs' performance of its core commercial functions also is extremely 
important to the U.S. businesses that rely on imports and exports. The 
approximately 25 million formal entries that Customs processed in 
fiscal 2001 represented a 60 percent increase from only 5 years 
earlier. The volume of international trade is increasing significantly. 
To keep that trade flowing, Customs must perform its job with ever 
greater efficiency.
  For these reasons, we must ensure that in moving from the Department 
of Treasury to a new Department of Homeland Security, Customs is able 
to do its commercial job as capably as it does today. I commend 
Chairman Lieberman for recognizing this imperative and for working with 
the Finance Committee to secure the Commercial side of Customs within 
the new Department. I would like to point out that in mid-July, the 
Finance Committee held a very enlightening hearing on the issue of 
Customs' integration into a Department of Homeland Security. Following 
the hearing, Senator Grassley and I transmitted a set of 
recommendations to Chairman Lieberman and Ranking Member Thompson. I am 
very pleased that a number of the key recommendations are part of the 
pending bill. In particular: The bill preserves the Customs Service as 
a ``distinct entity'' in the new Department. The bill provides that 
appointments required to be made by the President, by and with the 
advice and consent of the Senate shall continue to be subject to that 
requirement. I understand that this will include the Commissioner of 
Customs. The bill preserves for the Secretary of the Treasury certain 
legal authorities regarding ``customs revenue functions.'' Thus, even 
though Customs will move to the Department of Homeland Security, the 
Secretary of the Treasury will remain the ultimate decision maker in 
issuing most commercial regulations administered by Customs. this is 
important, because it ensures that the national economic interest will 
guide the issuance of regulations affecting Customs' commercial 
operations.
  We must bear in mind that this bill will move a commercial agency--
Customs--from a Department whose primary focus is on the national 
economic interest, to a Department whose primary focus is on national 
security. The provisions I cited will help ensure that Customs' 
commercial mission does not get diluted in that process. The amendment 
accepted yesterday bolsters that objective.
  The amendment contains three provisions.
  First, it makes clear that certain user fees that Customs collects 
from passengers and conveyances entering the United States will be 
available for use by the Customs Service exclusively.
  Second, it sets up a special account at the Treasury to support 
development and implementation of Customs' Automated Commercial 
Environment, known as ``ACE.'' ACE is a modern computer system that 
will replace Customs' antiquated system for the processing of imports. 
Of the fees collected by Customs for processing merchandise, $350 
million per year will be deposited into the ACE account.
  Third, the amendment makes clear that the Advisory Committee on 
Commercial Operations of the United States Customs Service--known as 
the ``COAC''--will remain in existence following Customs' move to the 
new Department. The COAC was created by statute in 1987. It is a 
bipartisan group of 20 representatives of individuals and firms 
affected by commercial operations of Customs. Over the years, it has 
provided valuable advice to the Secretary of the Treasury. Under this 
amendment, ti will continue to do so, and will advise the Secretary of 
Homeland Security as well.
  I firmly believe that these provisions, along with the customs-
related provisions in the underlying bill will ensure that Customs 
remains a strong and effective trade agency, as well as a strong and 
effective law enforcement agency, in the new Department.
  Finally, I would like to say a word about another aspect of the 
Lieberman bill for which the Chairman should be commended. I am 
referring to the provisions protecting the rights of employees in the 
new Department. The most valuable resource of our government is the 
people who work for it. We must give every incentive for the best and 
the brightest to serve and to continue serving.
  I understand that the President has asked for enhancement 
``flexibility'' in dealing with employees of the new Department. 
However, it is not at all clear to me that depriving federal workers of 
collective bargaining rights, merit systems protections, and whistle-
blower protections, among other protections, is necessary to achieve 
improved homeland security. In fact, I believe that just the opposite 
is true. To improve homeland security, we need a top-notch workforce. 
Getting and keeping that top-notch workforce means assuring employees 
that they will be treated fairly and enjoy the same protections that 
other federal employees enjoy. I applaud Chairman Lieberman for 
recognizing this and embedding it in the bill.
  I thank the Chair.

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