Northern Mariana Islands: Procedures for Processing Aliens and
Merchandise (Letter Report, 05/26/2000, GAO/GGD-00-97).
The Northern Mariana Islands are a U.S. territory with commonwealth
status in the western Pacific. Since 1984, Members of Congress and
successive administrations have raised concerns about the Islands'
ability to effectively implement their immigration laws and control the
export and import of goods. This report provides data on the Islands'
procedures for controlling the flow of aliens and goods into and out of
their territory. GAO provides data on the aliens' use of public health
care and education and their involvement in crime in the Islands.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: GGD-00-97
TITLE: Northern Mariana Islands: Procedures for Processing Aliens
and Merchandise
DATE: 05/26/2000
SUBJECT: Aliens
Illegal aliens
Alien labor
Immigration information systems
Customs administration
Immigration and naturalization law
Territories and possessions
Exporting
Internal controls
Law enforcement
IDENTIFIER: Saipan (Mariana Islands)
Rota (Mariana Islands)
Tinian (Mariana Islands)
Philippines
China
Hong Kong
Korea
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GAO/GGD-00-97
United States General Accounting Office
GAO
Report to the Ranking Minority Member,
Subcommittee on International Security,
Proliferation and Federal Services, Committee on
Governmental Affairs, U.S. Senate
May 2000
GAO/GGD-00-97
NORTHERN MARIANA ISLANDS
Procedures for Processing Aliens and Merchandise
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Contents
Page 40401GAO/GGD-00-97 Immigration and Customs in the Northern
Mariana Islands
Letter 1
Appendix I 42
Federal Agencies
Represented in the CNMI
Appendix II 44
Comments From the
Department of the
Interior
GAO Comments 56
Appendix III 61
Comments From the
Immigration and
Naturalization Service
Tables Table 1: Population of Saipan, by 6
Citizenship Category, for Selected
Years During 1980-1999
Table 2: Permit Cards Issued to Alien 13
Workers, by Employment Sector, for
1997, 1998, and 1999
Table 3: Total Number of Exclusions, 14
1996-1999
Table 4: Total Number of Aliens 15
Deported, 1995 Through 1999
Table 5: Data on the Value of Garments 22
Exported from the CNMI to the United
States During Fiscal Years 1987
Through 1998
Table 6: Sanctions Issued for 23
Violations of CNMI Customs
Regulations in 1998 and 1999
Table 7: Information on U.S. Customs 26
Service Recommendations and Actions
Taken by the CNMI Customs Division to
Implement the Recommendations
Table 8: Data on the Results of Alien 31
Health Screenings for 1998 and 1999
Table 9: Data on the Allocation of 33
CNMI Public Health Care Expenditures,
by Number of Visits, for Fiscal Years
1994 through 1999, by Citizenship
Category
Table 10: Citizen and Alien Student 34
Enrollment in the CNMI Public School
System for School Years 1997-1998,
1998-1999, and 1999-2000
Table 11: Estimate of the Operating 35
Costs for Educating Citizen and Alien
Students in the CNMI Public School
System for School Years 1997-1998,
1998-1999, and 1999-2000
Table 12: Data on Arrests for the Five 36
Most Frequent Crimes in the CNMI, by
Citizenship, for July-December 1996
and 1997
Figures Figure 1: TB Cases in the CNMI, 1992- 29
1999
Abbreviations
AFE Authorization for Entry
ATB Authorization to Board
BMS Border Management Systems
CNMI Commonwealth of the Northern Mariana
Islands
DEA Drug Enforcement Administration
DOLI Department of Labor and Immigration
DPS Department of Public Safety
FAS Freely Associated States
FBI Federal Bureau of Investigation
HIV human immunodeficiency virus
INA Immigration and Nationality Act
INS Immigration and Naturalization Service
LIIDS Labor and Immigration Identification
and Documentation System
OIA Office of Insular Affairs
TB tuberculosis
B-283950
Page 17GAO/GGD-00-97 Immigration and Customs Issue
s in the CNMI
B-283950
May 26, 2000
Honorable Daniel K. Akaka
Ranking Minority Member
Subcommittee on International Security,
Proliferation and Federal Services
Committee on Governmental Affairs
United States Senate
Dear Senator Akaka:
The Commonwealth of the Northern Mariana Islands
(CNMI) is a U.S. territory with commonwealth
status in the western Pacific. In March 1976,
President Ford signed Public Law 94-241, which
formed the Covenant to Establish a Commonwealth in
Political Union with the United States.1 The
Covenant establishing the CNMI placed it under
U.S. sovereignty and provided for U.S. citizenship
for people born there, yet it pledged self-
government for local affairs. Among other things,
the Covenant allows the CNMI to implement and
enforce its own immigration and customs policies
and procedures. Since 1984, concerns have been
raised by Members of Congress and successive
administrations about the CNMI's ability to
effectively implement its immigration laws and
control the export and import of goods.
Accordingly, you asked us to provide data on the
CNMI's procedures for controlling the flow of
aliens and goods into and out of the CNMI. In
addition, we agreed to obtain data on aliens' use
of public health care and education and their
involvement in criminal activities in the CNMI.
We did not, however, evaluate the effectiveness of
the CNMI's customs or immigration policies or
procedures or the political ramifications of the
presence of a large alien worker population in the
CNMI.
Results in Brief
The CNMI does not have consulates or
embassies in foreign countries. It does not
require visas for people entering the CNMI, nor
does it have the capability to prescreen all
aliens who enter the CNMI. However, the CNMI has
implemented procedures for prescreening
prospective alien workers and all aliens who wish
to enter the CNMI from those countries that it
considers "high risk."2 These countries are
considered high risk because they have not always
been willing to repatriate their nationals. In
addition, some countries are also included because
they have a history of fraudulent alien worker
recruitment schemes that originate in the home
countries in which prospective alien workers paid
fees for jobs in the CNMI that did not exist. The
CNMI has included them on the list as a means of
preventing this practice.
Alien workers are required to provide the
results of criminal background checks from their
home countries to CNMI immigration officials when
they enter the CNMI or to have the results
provided directly to the CNMI Department of Labor
and Immigration (DOLI). 3 According to the Acting
Director of the CNMI Immigration Division, law
enforcement agencies in Hong Kong and South Korea
provide the results of criminal background checks
for prospective workers directly to DOLI. In
contrast, alien workers from the Philippines and
China bring the results of their criminal
background checks with them to the CNMI. The
Acting Director of the CNMI Immigration Division
would prefer to have the law enforcement agencies
send the results of all prospective alien workers'
criminal background checks directly to DOLI. Under
this approach, the CNMI would require that the law
enforcement agencies in the aliens' home countries
supply the results of the background checks
directly to DOLI. This requirement could reduce
the ability of prospective alien workers with
disqualifying criminal backgrounds to alter the
results of the criminal background checks, thereby
reducing the possibility of fraud. According to
CNMI government officials, the CNMI is exploring
the possibility of making arrangements for the
Philippines and China to send these reports
directly to DOLI.
Alien workers are also required to bring
health certificates with them to the CNMI. In
addition, alien workers are required to undergo
screenings at a CNMI-certified health clinic
within 10 days of entering the CNMI and every year
thereafter.
Employers are financially responsible for
their alien workers' health care and return
airfare while the workers remain in the CNMI. In
some cases the law also requires employers to
provide free food and housing. In addition,
employers generally cannot hire a new alien worker
to replace a departing one unless they can show
that the original worker departed the CNMI,
transferred to another employer, or died.4 The
CNMI Immigration Division relies on employers to
report aliens who remain in the CNMI beyond the
end of their employment periods. In addition,
according to CNMI officials, CNMI governmental
agencies are also used as a means to monitor the
status of illegal aliens. The Department of
Public Health, the Public School System, the
Mayor's Office, the Marriage License Section, the
Department of Public Safety, and other CNMI
governmental agencies will report to the Division
of Immigration if they identify an alien who has
stayed beyond the approved period.
The CNMI manually records the date of entry
and the date of departure of visitors. By manually
tracking the departure dates, CNMI Immigration
officials can identify those visitors who have not
left the CNMI. The CNMI has identified a computer
system to perform this function and is in the
process of attempting to procure it. The CNMI
hopes to have this system operational in July
2000.
According to CNMI government officials, the
current CNMI administration has given priority to
enforcement of labor and immigration laws. This
has led to increased enforcement activities and
legislation to provide greater control over labor
and immigration and to improve the conditions for
aliens who work in the CNMI.
According to the CNMI Customs Director, the
Customs Division is to inspect all cargo
containers coming from Asian countries and
randomly inspect containers arriving from non-
Asian countries, including the United States.
Garments manufactured in the CNMI account for an
estimated 99 percent of the CNMI's exports, and
containers of garments ready for export are
inspected on a periodic basis. The U.S. Customs
Service has conducted a number of joint
investigations with the CNMI Customs Division over
the past few years. Although these investigations
have uncovered some drug-smuggling activities, the
investigations have found no evidence of
diversions or transshipments.5
Aliens accounted for 58 percent of the
population of Saipan6 in 1999, 26 percent of the
fiscal year 1999 public health care expenditures,
and about 11 percent of the public school system's
operating costs for the 1999-2000 school year.7
Aliens accounted for between 44 percent and
69 percent of the arrests for the five most
frequent crimes in the CNMI in those years for
which data were available, and these percentages
roughly align with the aliens' proportion of the
CNMI population.8
In commenting on a draft of this report, CNMI
provided technical comments that have been
incorporated, where appropriate. The Department
of the Interior felt that the report lacked the
critical evaluation and analysis to determine
whether the CNMI's procedures for processing
aliens and merchandise met required standards. The
Immigration and Naturalization Service (INS) said
our report should clearly state that our
objectives were not to address immigration policy
issues and thereby avoid creating the impression
that we reviewed the procedures. We have modified
the report to more explicitly state that our
objectives were not to evaluate the effectiveness
of the CNMI's procedures and policies.
Background
The Northern Mariana Islands are located just
north of Guam in the Pacific Ocean. Of the 14
islands that make up the CNMI, only 3 (Saipan,
Rota, and Tinian) are inhabited with significant
populations.9 The United States took control of
the Islands during the latter part of World War
II. In 1947, the U.S. Congress approved the
Trusteeship Agreement that made the United States
responsible to the United Nations for the
administration of the Islands. Under the Covenant
established in 1976, the first elected government
of the Northern Mariana Islands took office in
January 1978, although the Islands remained a part
of the Trust Territory of the Pacific Islands
under the jurisdiction of the Secretary of the
Interior. In 1986, upon termination of the United
Nations Trusteeship, the Northern Mariana Islands
became a full commonwealth in political union with
and under the sovereignty of the United States.
Within the U.S. Government, the Department of the
Interior's Office of Insular Affairs (OIA) is
responsible for assisting the CNMI with achieving
its political, economic, and social goals.
The Covenant
Under the Covenant between the CNMI and the United
States, the CNMI is under U.S. sovereignty but has
self-government for local affairs. The Covenant
also provides U.S. citizenship for people born in
the CNMI. In general, federal law applies to the
CNMI; however, a basic objective of the Covenant
was to encourage economic growth and a standard of
living comparable to that in the United States. To
that end, the Covenant provided several economic
incentives in the form of exemptions from federal
law. For example, clothing made in the CNMI that
does not contain foreign substances valued at more
than 70 percent of the garments' worth is exempt
from U.S. textile quotas and from U.S. Customs'
duties if exported to the United States. In
addition, garments made in the CNMI are entitled
to bear labels identifying them as having been
made in the United States. Current exceptions from
federal law provided by the Covenant are that: 10
� The CNMI is not within the customs territory
of the United States.
� Federal minimum wage provisions do not apply.
� Federal immigration laws do not apply.
� The CNMI can establish its own tax and fee
structure.
� The Jones Act, which requires goods shipped
between U.S. ports to be carried on U.S.-
registered ships, does not apply to the CNMI.
CNMI Immigration Policies
CNMI immigration policies allow the use of alien
workers. The workers are employed mostly in the
garment and tourist industries. In 1995, these two
industries were responsible for about 85 percent
of the CNMI's total economic activity.11 The CNMI
issues permits that do not lead to U.S.
citizenship for these alien workers. The CNMI also
issues permits to alien business owners and their
families. Due in large part to the influx of these
aliens, the population of Saipan increased from
14,549 in 1980 to an estimated 71,790 in 1999, as
shown in table 1.12 The percentage of aliens in the
population increased from 23 percent in 1980 to 56
percent in 1990 but increased only slightly
between 1990 and 1999.
Table 1: Population of Saipan, by Citizenship
Category, for Selected Years During 1980-1999
Citizenship 1980 1990 1999
category
Number Percent Number Percent Estimated Percent
number
All persons 14,459 100.0 38,896 100.0 71,790 100.0
U.S. citizens 11,195 76.9 17,171 44.1 30,154 42.0
Born in the CNMI 10,239 70.4 14,378 37.0 24,710 34.4
Born in U.S. or 956 6.6 1,968 5.1 3,543 4.9
territory
Born abroad of U.S. N/A N/A 212 0.5 199 0.3
parents
Naturalized citizen N/A N/A 613 1.6 1,702 2.4
Aliens 3,354 23.1 21,725 55.9 41,636 58.0
Permanent resident N/A N/A 2,056 5.3 5,477 7.6
Temporary resident N/A N/A 19,669 50.6 36,158 50.4
N/A: Not available
Source: 1980 Census Report, 1990 Census Report,
and 1999 Labor Force Quarterly Survey.
Included in the alien category are immediate
relatives of U.S. citizens. Some of these
individuals are nonresident spouses of U.S.
citizens who are not legal permanent resident
aliens but are residing in the CNMI under the CNMI
Immigration category of "immediate relative."
Included in the category of permanent resident are
FAS citizens.
Data on Illegal Aliens
No firm data are available on the number of
illegal aliens present in the CNMI. The CNMI
Government estimated that there were between 2,000
and 5,000 illegal aliens in the CNMI prior to
September 1998; however, INS estimated that there
were between 2,000 and 4,000 illegal aliens. To
address the issue of illegal aliens in the CNMI,
Public Law 11-33, which was enacted on September
2, 1998, provided illegal aliens with the
opportunity to register to enable them to become
lawfully employed in the CNMI. The registration
period ended on June 2, 1999, with 3,111 aliens
having registered. CNMI government officials
believe that the registration figure is fairly
representative of the true number of illegal
aliens in the CNMI because every effort was made
to build trust to encourage illegal aliens to
register and to show them the validity of the
grant of amnesty. In addition, the CNMI officials
believe that the profiles and numbers of people
who eventually came in to register indicated that
trust was established, and officials believe that
most illegal aliens present in the CNMI availed
themselves of this opportunity.
Role of INS and Customs in the CNMI
Because the CNMI operates its own immigration
system, the role of INS in the CNMI is limited.
INS has provided (1) input to CNMI Immigration
officials to help prevent unauthorized aliens from
entering the CNMI and (2) training to CNMI
immigration officers.
The CNMI is outside U.S. Customs' territory; thus,
U.S. Customs does not have the authority to
conduct inspections or examinations of cargo,
baggage, or people entering the CNMI. The CNMI has
its own Customs Division that is responsible for
collecting duties and taxes and inspecting
passengers, baggage, and imported and exported
cargo. The U.S. Customs Service can, however,
investigate certain violations of federal law,
including money laundering, counterfeiting, and
drug smuggling activities in the CNMI.
Scope and Methodology
To provide data on the CNMI's procedures to
control the flow of aliens into and out of the
CNMI, we met with INS officials in Washington,
D.C., as well as with immigration officials in the
CNMI. We also collected documentation on the
CNMI's immigration policies, procedures, and
practices, as well as available data on alien
exclusions and deportations. Further, we observed
the procedures used by CNMI immigration inspectors
for screening aliens upon arrival into and
departure from the CNMI.
We met with officials at INS and with
immigration officials in the CNMI regarding the
status, capabilities, and evaluations performed of
the current automated immigration system-the Labor
and Immigration Identification and Documentation
System (LIIDS). Specifically, we met with its
Secretary of Labor and Immigration, its Acting
Director of Immigration, its Director of Labor,
and its LIIDS Project Manager. We also gathered
relevant documentation regarding the development,
capabilities, and evaluations of LIIDS. Further,
we observed LIIDS in use by immigration officials.
Finally, we collected information on DOLI's
proposed addition of an arrival and departure
component to LIIDS.
To obtain data on the procedures used by the
CNMI Customs Division for controlling imports to
and exports from the CNMI, we met with U.S.
Customs officials in Washington, D.C., to gather
documentation on investigations conducted in the
CNMI, the results of those investigations, the
interaction between the U.S. Customs Service and
the CNMI Customs Division, and the role U.S.
Customs has played in the CNMI Customs Division's
efforts. In addition, we met with CNMI Customs
officials and gathered documentation on the CNMI
Customs Division's policies and procedures, as
well as data on the results of cargo inspections.
In addition, we observed CNMI Customs agents'
inspections of cargo containers.
To obtain data on aliens' use of public
health care and education, as well as the
involvement of aliens in criminal activities in
the CNMI, we met with officials of the United
States Census Bureau, the Department of Justice,
and OIA in Washington, D.C.; and with officials
from the Centers for Disease Control in Atlanta,
GA, via videoconference. In the CNMI, we met with
representatives from the Department of Public
Health, the CNMI Department of Commerce's Central
Statistics Division, and the CNMI Public School
System to gather available data on (1) visits to
public health care facilities, public health care
expenditures, and disease rates in the CNMI and
how these differ between the resident and alien
populations; and (2) student enrollment in the
CNMI Public School System, including children of
aliens and CNMI citizens. Further, we met with the
Commissioner and staff of the CNMI Department of
Public Safety, officials from the U.S. Attorney's
Office in the CNMI, and representatives from U.S.
law enforcement agencies stationed in the CNMI to
collect available data and discuss aliens'
involvement in criminal activities in the CNMI.
(App. I contains information on the federal
agencies represented in the CNMI.)
In this report we did not evaluate the
effectiveness of the CNMI's customs or immigration
policies or procedures, or the political
ramifications of the presence of a large alien
worker population in the CNMI. Although we tried
to use the most accurate data available, we did
not independently verify the accuracy of the data
provided to us.
We conducted our work in Washington, D.C.,
and in the CNMI between October 1999 and April
2000 in accordance with generally accepted
government auditing standards. We requested
comments on a draft of this report from the
Governor of the CNMI, the Secretary of the
Interior, and the Commissioner of INS. In
addition, we discussed pertinent sections of the
draft report with U.S. Customs officials. The CNMI
provided technical comments, which have been
incorporated into the report, where appropriate.
The Department of the Interior and INS provided
comments that are summarized at the end of the
letter; incorporated into the report, where
appropriate; and reproduced in appendixes II and
III, respectively. U.S. Customs Service officials
told us that they agreed with the facts presented
in the draft pertaining to the U.S. Customs
Service and had no further comments on the report.
The CNMI's Immigration System
The CNMI does not require visas for travel to
the Commonwealth. Unlike sovereign countries, the
CNMI has no embassies or consulates in foreign
countries and, therefore, is unable to interview
applicants for admission or issue them visas while
they are still in their home countries. However,
the CNMI has its own system for (1) preapproving
CNMI employers' petitions for alien workers, (2)
preapproving the entry of aliens from high-risk
countries, (3) inspecting passengers upon arrival
and departure, (4) investigating compliance with
immigration laws, (5) excluding unauthorized
aliens from entering the CNMI, and (6) deporting
aliens who are in the CNMI illegally. In addition,
the CNMI uses LIIDS to document alien workers in
the CNMI. LIIDS is not used to track visitors or
workers, so the CNMI is in the process of
developing an expanded computer system to track
CNMI visitors and alien workers. To address
immigration-related problems, the CNMI has
increased its enforcement activities and made
legislative changes.
Prearrival Screening
of Passengers
The CNMI requires all alien visitors from
high-risk countries who are not entering for
employment purposes to have an Authorization to
Board (ATB) letter from the Secretary of Labor and
Immigration prior to boarding a CNMI-bound
carrier. 13 In addition, aliens who enter the CNMI
to work are to have an Authorization for Entry
(AFE) permit granted in advance of their arrival
at the port-of-entry.
Prescreening of Aliens
from High-Risk Countries
In 1999, DOLI instituted procedures to
control entry of individuals from certain high-
risk countries into the CNMI. According to the
Secretary of Labor and Immigration, experience has
shown that individuals from these countries have
been difficult to repatriate. These countries are
considered high risk because these countries have
not always been willing to repatriate their
nationals. In addition, some countries are also
included because they have a history of fraudulent
alien worker recruitment schemes that originate in
the home countries in which prospective alien
workers paid fees for jobs in the CNMI that did
not exist. The CNMI has included these countries
on the list as a means of preventing this
practice. All individuals from high-risk countries
who are not entering the CNMI for employment
purposes must first obtain an ATB letter from the
Secretary of Labor and Immigration prior to
boarding a CNMI-bound carrier.
In order to obtain an ATB letter, the
applicant must, in advance of traveling to the
CNMI, provide
� a valid passport,
� statement on the purpose of traveling to the
CNMI,
� the name of a contact or sponsor in the CNMI,
� his/her occupation in the home country, and
� a security bond (at the discretion of the
Director of Immigration or Secretary of Labor and
Immigration).
Individuals with an ATB letter must present it to
a carrier representative prior to boarding a CNMI-
bound carrier and, upon entry, to a CNMI
immigration officer. It is also the policy of the
CNMI Immigration Division to retain custody of
high-risk citizens' passports until their
departure from the CNMI. In those cases where an
individual without an ATB letter is allowed to
board a CNMI-bound carrier, the carrier is
required to return the individual to his/her point
of departure at its expense.
Prescreening of Alien Workers
The CNMI has a screening process for
approving alien workers prior to their entry into
the CNMI. Each alien seeking employment in the
CNMI must submit an application to DOLI. In some
cases, immediate relatives may accompany alien
workers.14 As part of this screening process, each
prospective alien worker is required to have a
health screening15 and a criminal background check
conducted in the alien's home country. In
addition, employers are required to post a bond
for each prospective alien worker to cover 3
months' salary, $3,000 in medical coverage, and
the cost of the alien's return carrier ticket. 16
Because of the large number of alien workers who
come to the CNMI from the Philippines,17 the CNMI
works with the Philippines Overseas Employment
Agency 18 and the Philippines Consulate in the CNMI
to assist prospective workers in obtaining the
required health screens and to ensure that
prospective workers do not have disqualifying
criminal histories. According to the Acting
Director of Immigration, Hong Kong and South Korea
are the only countries whose law enforcement
agencies provide the results of criminal
background checks for prospective workers directly
to DOLI. In contrast, alien workers from the
Philippines and China19 bring the results of their
criminal background checks with them to the CNMI.
The CNMI is exploring the possibility of making
arrangements for the Philippines and China to send
these reports directly to DOLI. The Acting
Director of Immigration would prefer to have the
law enforcement agencies send the results of all
prospective alien workers' criminal background
checks directly to DOLI. Under this approach, the
CNMI would instead rely on the law enforcement
agencies in the aliens' home countries to directly
supply the results of the background checks. This
approach could reduce the ability of alien workers
with disqualifying criminal backgrounds from
altering the results of the criminal background
checks, thereby reducing the possibility of fraud.
DOLI does not have the means to verify the
criminal histories of arriving alien workers. For
example, if it had staff in foreign countries with
access to criminal history databases, its staff
could independently determine the criminal
histories, if any, of prospective workers.
When an application for an alien worker is
approved, DOLI completes an AFE and sends a copy
to the alien worker. The AFE contains basic
biographical and employment information, a
photograph of the alien worker, and a permit
number. Each alien worker is assigned a unique
permit number by LIIDS. The AFE is the document
that the alien worker will use to enter the CNMI.
In addition to providing a copy of the AFE to the
alien worker, DOLI also provides a copy to CNMI
immigration inspectors at the Saipan International
Airport.
Screening of Aliens
Upon Entry
All visitors to the CNMI who are not U.S. citizens
must complete an Arrival and Departure Record,
which includes name; citizenship; date of birth;
passport number; carrier flight number; address
while staying in the CNMI; the purpose of their
visit; and, in the case of alien workers, the
entry permit number.
Upon presentation of the Arrival and Departure
Record, immigration inspectors stamp the Record
with the date of arrival and retain one copy (the
arrival portion) for their files. The departure
portion is attached to the alien's passport and is
collected by an immigration inspector when the
alien departs the CNMI. The departure portion also
has the date the alien entered the CNMI stamped on
it so that immigration inspectors can manually
match the arrival and departure portions of the
record for each alien and thereby know the length
of their stay in the CNMI.
When an alien worker arrives, he or she is to
present the copy of the AFE to the immigration
inspector for entry into the CNMI. The inspector
is to compare the Immigration Division's copy of
the AFE to the alien worker's copy to confirm (1)
the consistency of the information, including the
photographs on both documents; and (2) the
identity of the worker. After reviewing the AFEs,
the immigration inspector stamps the AFE copies to
certify that the alien worker has entered the
CNMI. The alien worker is then to take the AFE to
DOLI to exchange it for a plastic permit card.20
The permit cards are produced by LIIDS.21 Since
1995, the CNMI has been using LIIDS to account for
and document alien workers in the CNMI. The LIIDS
database collects information on each alien's (1)
full name; (2) address in the CNMI; (3)
citizenship; (4) gender; (5) employment status;
(6) immigration classification (e.g., missionary,
alien worker); and (7) where appropriate, the
employment contract period. The LIIDS database
also contains a photograph of each alien worker,
along with the alien's permit number.
According to DOLI, in 1999, about 88 percent
(33,027 out of 37,557) of the total number of
permit cards issued were to alien workers.22 As can
be seen in table 2, the garment industry is the
single largest employer of alien workers in the
CNMI. The number of permit cards issued to alien
workers fluctuated between 1997 and 1999.23
Table 2: Permit Cards Issued to Alien Workers, by
Employment Sector, for 1997, 1998, and 1999
Employment sector 1997 1998 1999
Banking 36 31 13
Construction 4,289 2,794 2,888
Garment 12,593 11,152 16,533a
Hotels 2,063 2,328 2,106
Government 22 25 73
Private household 2,276 1,690 2,163
Restaurant/night club 2,436 1,586 1,736
Servicesb 10,369 6,702 7,366
Otherc 27 71 149
Total 34,111 26,379 33,027d
a This number includes new permits issued within
the same year to an alien worker for such things
as having a consensual transfer from one employer
to another, replacing a lost card, etc. According
to CNMI officials, the actual number of workers
who were issued permits in 1999 for the garment
industry (excluding re-issues discussed above) was
15,641. We did not have a breakout of this figure
for 1997 and 1998.
b The Service sector includes duty-free shops,
retail stores, auto repair shops, and other
businesses that provide services to the general
public.
c "Other" includes all other business sectors that
were not entered into LIIDs.
d In commenting on this report, the Department of
the Interior stated that this number (33,027)
excludes workers employed under temporary work
authorizations while their labor complaints are
being investigated by various local and federal
agencies.
Source: CNMI Department of Labor and Immigration.
Aliens Excluded From
Entering the CNMI
The CNMI can exclude aliens from entry into the
CNMI for a number of reasons. Excludable aliens
include those who (1) have been convicted of
certain crimes, (2) have no means of support, (3)
have been deported from the CNMI within the past 5
years, (4) attempted to enter the CNMI with
invalid or fraudulent travel documents, or (5)
pose a threat to the public health of the CNMI.
Table 3 summarizes the total number of exclusions
during years 1996 to 1999.24 Data were not
available on the reasons for the exclusions;
however, according to the Acting Director of
Immigration, the aliens were likely excluded from
entry because they did not have the proper
documents to enter the CNMI.
Table 3: Total Number of Exclusions, 1996-1999
Year Number of exclusions
1996 144
1997 423
1998 279
1999 83a
a This number does not include 541 Chinese boat
people who were intercepted by the U.S. Coast
Guard and detained temporarily on the island of
Tinian while being processed by U.S. immigration
staff.
Source: CNMI Division of Immigration.
Deportation of Aliens from the CNMI
To determine if a tourist has remained in the CNMI
beyond his/her authorized period, immigration
staff have to manually compare the Arrival and
Departure Records each month. If there is no
Departure Record, the tourist is presumed to still
be in the CNMI. If the 30-day period authorized
for visitors has passed, an immigration inspector
is to provide this information to the Immigration
Division's Enforcement Unit, which is responsible
for locating the visitor and beginning deportation
proceedings.
Although LIIDS can document how long an alien
worker has been in the CNMI, it is not being used
to generate reports on alien workers who have
overstayed their authorized employment periods.
The Immigration Division has relied on employers
to report alien workers who remain in the CNMI
beyond the end of their employment period.
According to the Nonresident Workers Act,25
employers are responsible for their alien
employees' health care costs and return airfare
until they depart the CNMI. In some cases, the law
also requires employers to provide free food and
housing. In addition, according to the CNMI's
Moratorium Law,26 employers generally cannot
legally hire a new alien worker to replace a
departing alien worker until the original worker
has departed the CNMI, has been transferred to
another employer, or has died. As a result,
employers have both financial and business
incentives to report alien workers who have
remained in the CNMI beyond the end of their
employment periods to DOLI for deportation.27
According to CNMI officials, CNMI governmental
agencies are also used as a means to monitor the
status of illegal aliens. The Department of Public
Health, the Public School System, the Mayor's
Office, the Marriage License Section, the
Department of Public Safety, and other CNMI
governmental agencies will report to the Division
of Immigration if they identify an alien who has
stayed beyond the approved period.
The CNMI can deport an alien for a number of
reasons, such as if the alien (1) was excludable
at the time of entry, (2) entered without
inspection or in violation of law, (3) has become
a public charge, (4) violated the terms of entry,
(5) stayed beyond his/her approved period, or (6)
has been convicted in the CNMI of a felony or two
or more misdemeanors. Table 4 provides information
on the number of aliens who have been deported
from the CNMI each year from 1995 through 1999.
Table 4: Total Number of Aliens Deported, 1995
Through 1999
Year Number of deportations
1995 42
1996 192
1997 247
1998 417
1999 66a
aAccording to the Division of Immigration, the low
number of aliens deported in 1999 was due to the
implementation of the "Amnesty Law" (P.L. 11-33),
which affected the active enforcement and
deportation of aliens in that year.
Source: CNMI Division of Immigration.
Data on the reasons for the deportations were
available only for 1998 and 1999. Of the 417
aliens deported in 1998, 413 were deported for
overstaying the authorized period of stay, 2 were
deported for felony convictions, and 2 were
deported for failure to follow the prescribed
treatment for tuberculosis. Of the 66 aliens
deported in 1999, 61 were deported for overstaying
the authorized period of stay, and 5 were deported
for felony convictions.
The CNMI's Immigration
Control System
The CNMI has been seeking to develop a
complete immigration tracking system that would
include an automated system to track alien workers
while in the CNMI, as well as their arrival and
departure. Since July 1995, the CNMI has been
using LIIDS, a computer tracking system that
contains biographical, employment, and arrival and
scheduled departure data on all alien workers in
the CNMI. As of April 2000, the CNMI was in the
final stages of implementing an automated arrival
and departure component that will allow the CNMI
Division of Immigration to track not only alien
workers, but also visitors and others who enter
the CNMI.
Overview of LIIDS
In 1994, OIA provided a $1.5 million grant to
the CNMI for development of an immigration
identification and tracking system. At that time,
the CNMI Division of Labor was using a separate
system to document, track, and issue permit cards
for aliens entering the CNMI to work. However, the
Labor Division's system failed. As a result, the
prototype of LIIDS was engineered to perform those
functions, and this has delayed the development of
an arrival and departure component.
Since July 1995, the CNMI has been using
LIIDS to account for alien workers in the CNMI.
Initially, LIIDS was used only for collecting data
on alien workers because it was a substitute for
the prior system used by the Division of Labor.
Then, in May 1996, DOLI began to use LIIDS to
generate plastic permit cards for all aliens who
immigrate to the CNMI, regardless of immigration
classification. Near the end of the first year of
the LIIDS prototype, a separate Division of Labor
database had not been developed. Thus, with the
assistance of vendors, several different fixes and
supplements were created to support LIIDS for
continued use. According to the LIIDS Project
Manger, this method of extending the LIIDS
prototype's life ultimately resulted in an immense
and extremely complex database that was difficult
to use for generating the required reports.
The LIIDS Project Manager told us that the
most serious problems with the LIIDS prototype
were related to system security and integrity, the
processing times, and accuracy of the data.
Although the LIIDS prototype was secured from
people not authorized access into the system, data
entry personnel could delete and/or change data in
the system, and there was no way to track which
files were deleted and by whom. Anyone with access
to the LIIDS prototype could issue an illegal
permit and either delete the entry or make it
appear valid in the system. The LIIDS Project
Manager added that (1) the size of the photograph
files slowed the system's access and processing
times considerably, (2) extracting data for
required reports was time consuming, and (3) data
extracted for reports were often inaccurate.
According to the LIIDS Project Manager, the
revisions made to LIIDS have addressed the
problems found in the prototype version. In
addition to being year-2000 compliant, the revised
version of LIIDS corrected security problems found
with the prototype version. For example, the input
operator's name is now automatically entered on
the appropriate fields, and changes or corrections
to a permit card or application can now be made
only by key personnel authorized by the network
administrator.
The LIIDS Project Manager also said that in
addition to improving security measures, the
revised version of LIIDS also improved the process
for tracking and extracting information. For
example, additional information, such as the
approval date of employment applications and the
date the application package is received in the
LIIDS section, are now required fields for entry.
The revised version of LIIDS also allows DOLI
staff to extract data for required reports faster
and in a more simplified format by using
preformatted screens.
Examples of benefits of the revised version
of LIIDS reported by the LIIDS Project Manager
include
� improved capability to locate and extract
information on a particular alien worker,
� more accurate identification of aliens
because their photographs are captured on file,
� capability to print reports for investigative
and other purposes, and
� a history of each alien worker's employment
in the CNMI.
In addition to the system changes, the plastic
permit cards printed through LIIDS have been
changed. The cards still contain the alien's LIIDS
number, full name, citizenship, gender, birth
date, employer, occupation, and the issuance and
expiration dates, but the following information
was also added:
� To differentiate between alien workers and
other immigration classifications, a blue stripe
has been added across the top of all labor (work)
permit cards, and a red stripe has been added to
the top of all other immigration permit cards
(e.g., missionaries).
� To reduce the likelihood of counterfeiting,
the official seal of the CNMI is embedded in the
center background of the card.
� To increase the security features of the
cards, two bar codes are printed on the cards. The
first bar code encodes the LIIDS number and is
located on the bottom left of the card. The second
bar has an encoded number to identify the alien's
record in the system. This bar code and number are
generated by LIIDS and are hidden from data entry
personnel. If the two bar codes on the card do not
match records in LIIDS, the card could be
counterfeit.
Development of the Arrival and Departure Component
According to CNMI officials, the CNMI needed
additional information not contained in LIIDS.
Specifically, the CNMI still needed a system that
would record alien arrivals and departures and
identify those aliens who remain in the CNMI
longer than authorized. The LIIDS Project Manager
identified an existing system-Border Management
Systems (BMS)28-that he stated could meet the
CNMI's immigration requirements and run on the
newly upgraded LIIDS infrastructure. The system
stores records of all persons entering the country
and records data on aliens who have been
authorized to extend their stay in the country.
Users of BMS enter arrival and actual departure
data from arrival and departure cards from major
ports-of-entry.
In addition to being compatible with LIIDS,
BMS could incorporate an "alert list" made up of
names that the CNMI has compiled, as well as
INTERPOL notices. The CNMI Immigration Division
does not currently have access to any watch lists.
In addition, BMS will match arrival and departure
data that will allow the Immigration Division to
identify persons who have stayed longer than
permitted.
According to the LIIDS Project Manager, the
estimated cost for the BMS software and hardware
is $543,924.29 The CNMI has $166,703 left from its
original $1.5 million grant from OIA, leaving a
balance of $377,221. The LIIDS Project Manager
said that once BMS is funded, hardware can be
purchased, the system can be installed, staff can
be trained, and the system can be operational
within a few months. In commenting on the draft
report, CNMI officials stated that the CNMI will
be funding the project locally and hope to have
BMS operational in July 2000.
CNMI Government
Actions to Improve its
Immigration System
According to CNMI government officials, the CNMI
administration has given priority to enforcement
of labor and immigration laws. The officials told
us that DOLI and the CNMI Attorney General's
Office were investigating and pursuing labor and
immigration cases. According to these officials,
this has led to increased enforcement activities,
such as surprise inspections at work sites30 and a
multiagency effort to reduce crime in tourist
areas. In addition, legislation has been passed to
provide greater control over labor and immigration
and to improve working conditions for alien
workers in the CNMI. The legislative changes
include the following:
� Public Law 11-6,31 effective March 1998,
imposes a moratorium on the hiring of alien
workers. It also allows alien workers already in
the CNMI to transfer from one employer to another.
� Public Law 11-33, effective December 1998,
provided a period of limited immunity during which
illegal aliens had the opportunity to register to
enable them to become lawfully employed.32
� Public Law 11-66, effective February 1999,
provides compensation and repatriation
capabilities for alien workers who have been
awarded damages that are not collectable.
� Public Law 11-69, effective March 1999,
requires alien workers to exit the CNMI
periodically before reemployment in the CNMI and
limits their stay in the CNMI to 3 consecutive
years.33
� Public Law 11-76, effective March 1999,
imposes a cap on the number of alien workers in
the garment industry. Combined with the Moratorium
Law (P.L. 11-6), this law is intended to decrease
the number of alien workers in the garment
industry.
� Public Law 11-123, effective February 2000,
grants the CNMI Customs Division the authority to
deny the issuance of a certificate of origin on
exports from any the CNMI garment factory found in
violation of U.S. and the CNMI labor protection
laws.34
In addition to these legislative reforms, DOLI
issued regulations in 1998 to prohibit security
and manpower firms from hiring workers from
outside the CNMI as a means to reduce recruitment
fraud in which prospective alien workers paid fees
for jobs in the CNMI that did not exist. The CNMI
government also increased efforts to work with
federal law enforcement agencies in the CNMI to
address labor and immigration problems. For
example, DOLI has been working with the INS
representative in the CNMI to increase the
training opportunities for CNMI Immigration
Division staff.
Recent Legislative Actions
The CNMI House of Representative recently
passed a bill (H.B. 12-39) that would, among other
things, eliminate the moratorium on the hiring of
alien workers (P.L. 11-6), repeal the cap on the
number of alien workers in the garment industry
(P.L. 11-76), and repeal Public Laws 11-69 and 11-
123 in their entirety. Staff of the CNMI
Governor's Office stated that even if H.B. 12-39
passes the Senate, the Governor is committed to
the cap on the number of garment factory workers
and will not approve any legislation that impairs
controls on the number of alien workers in the
CNMI. Because the CNMI Governor cannot line item
veto a nonappropriations bill, he would have to
veto the entire bill should it pass the CNMI
Senate.
Customs Operations
in the CNMI
The CNMI Customs Division inspects all
imports from Asian countries and randomly inspects
imports coming from the United States and other
non-Asian countries. According to the Director of
the CNMI Customs Division, garments manufactured
in the CNMI account for about 99 percent of the
CNMI's exports. The CNMI Customs Division has
production verification and inspection procedures
in place to ensure the proper reporting and
declaration of garment factory exports. Further,
all other exports are inspected to verify the
value of the goods being returned or sold outside
of the CNMI for purposes of excise tax refunds.35
Data on imports to the CNMI are generally not
available,36 but data are available on the value of
garments exported to the United States. The U.S.
Customs Service has conducted some joint
investigations with the CNMI Customs Division and,
on the basis of these investigations, identified
no diversions, transshipments, or other violations
of U.S. Customs laws.
CNMI Imports and Customs Procedures
The CNMI Customs Director told us that about
60 percent of the goods imported into the CNMI are
general merchandise goods for stores and
construction materials. These goods are primarily
imported from the United States, the Philippines,
Taiwan, Korea, Hong Kong, and China. The remaining
40 percent of the goods imported into the CNMI are
textiles, equipment, and accessories for use in
the CNMI's garment factories. The primary sources
of these goods are Hong Kong, Korea, and Taiwan.
The CNMI Customs Director told us that goods
imported from Asian countries are to be considered
"high risk".37 Therefore, all containers arriving
at the seaport from Asian countries are inspected.
In contrast, containers of general merchandise
imported from the United States38 and other non-
Asian countries are randomly inspected.
When goods arrive at the seaport, CNMI
Customs agents are to board the vessel and collect
all required documents for the imported goods,
including bills of lading. The Customs agents are
to review and date stamp the paperwork. The
appropriate consignees or their authorized agents
are then informed by the carrier's agent that
their goods have arrived at the seaport and are
ready for inspection. When the consignees or
their agents arrive at the CNMI Customs Office to
clear their imported goods, CNMI Customs agents
determine if the imported goods are taxable or
not. If the goods are taxable, the CNMI Customs
Division assesses duties. Importers have 30 days
to pay for the assessed goods, after which
penalties and interest are imposed, and future
incoming goods may be held until taxes are paid.
After the paperwork is processed, the consignees
or their agents proceed to the inspection area.
During the inspection of an imported cargo
container, CNMI Customs agents are to review the
related bill(s) of lading for the container to
ensure that the seal number and container number
on the bill(s) of lading match the container and
to ensure that the seal on the container has not
been broken.39 If the Customs agents decide to
inspect the contents of the container, the seal is
broken and the container is opened. The agents are
then to compare the contents of the container with
the information on the bill(s) of lading,
invoice(s), and the shipping list(s) to ensure
that all imported goods have been declared.
CNMI Exports and
Customs Procedures
The CNMI Customs Director estimated that
garments manufactured in the CNMI's garment
factories account for about 99 percent of the
goods exported from the CNMI. Although no specific
data are available, the CNMI Customs Director
stated that most garments are exported to the
United States, with a small percentage of the
garments exported to countries like Canada and
France. The remaining 1 percent of exports
consists of general merchandise goods that are
being exported or sold to a buyer outside of the
CNMI by stores within the CNMI that had originally
imported the goods. CNMI Customs agents are
required to inspect all containers of goods being
returned to verify the appropriate tax refunds and
to randomly inspect containers of garments to be
exported.
The CNMI Customs Division maintains data on
the volume of and wholesale value of exported
garments and collects user fees on these goods.
Table 5 shows data on the value of the CNMI's
garment exports to the United States for fiscal
years 1987 through 1998. The data show that the
values of the garment industry's exports to the
United States have increased almost 15 times
during this period. In 1998 dollars, the increase
was about 12 times for the same period.
Table 5: Data on the Value of Garments Exported
from the CNMI to the United States During Fiscal
Years 1987 Through 1998
Fiscal year Export valuea Export value in 1998
(millions) dollarsa (millions)
1987 $67.3 $79.9
1988 131.3 151.7
1989 121.7 137.2
1990 156.6 171.9
1991 264.4 285.0
1992 278.7 294.4
1993 296.7 309.5
1994 319.2 331.6
1995 419.1 431.9
1996 513.7 522.6
1997 792.5 799.0
1998 994.6 994.6
Note: In calculating the constant dollar
calculation (in 1998 dollars), we used the
relevant components from the producer price index,
which reflects producer prices from a U.S.-based
perspective. No similar index exists using CNMI
prices. Had there been a CNMI-based index, the
results of the constant dollar calculation might
have been different.
aValues are based on wholesale prices.
Source: CNMI Department of Finance.
According to U.S. Customs officials, U.S.
exports to the CNMI are not subject to U.S.
Customs export controls. The U.S. Customs Service
does not have authority to inspect cargo in the
CNMI, but officials in the U.S. Customs' Office of
Investigations told us that they have no
indication that the CNMI is violating U. S. export
control laws (e.g., diversions). The CNMI Customs
Director told us that, although businesses and
retail stores in the CNMI import computers and
other technology goods from the United States,
none of these goods are subsequently exported to a
third country. According to the Customs Director,
the only company in the CNMI that imports goods
from the United States that are subsequently
exported is a licensed beverage distributor that
imports beer and soft drinks from the United
States for export to other islands in Micronesia.
Because garment manufacturing accounts for
almost all of the CNMI's exports, the CNMI Customs
Division focuses most of its inspection efforts on
verifying the production capabilities of the
garment factories and the amount of imported
fabric that the garment factories are using.40 When
garment manufacturers export garments, they are
required to prepare a number of documents to
verify, among other things, the quantity of fabric
used, the type(s) of garments manufactured, and
the wholesale value of the goods manufactured.
Before garments can be certified for export, an
agent from the Customs Garment Section is to
review these export documents to verify how much
imported fabric the garment factory used (in yards
or pounds) to produce the finished products by
comparing the export documents to Customs' records
of fabric on-hand for the garment factory to
ensure they reconcile. In addition, agents in the
Customs Garment Section are to verify the value of
the goods to be exported.
Sanctions Issued for
Customs Violations
According to CNMI Customs officials,
sanctions are entered into a computer system, and
hard copies of the sanctions are retained.41 The
Customs Division provided us a listing of all
sanctions levied in 1998 and 1999 (see table 6).
The CNMI Customs Director stated that sanctions
can range from a letter of reprimand to a fine of
$10,000.
Table 6: Sanctions Issued for Violations of CNMI
Customs Regulations in 1998 and 1999
Year Number of Monetary fines
letters
of reprimand
Number of Total value
fines of fines
1998 23 37 $20,025
1999 27 45 $47,350
Totals 50 82 $67,375
Source: CNMI Customs Division.
The data did not include the reasons for the
sanctions issued; however, the CNMI Customs
Director stated that the sanctions were for
unreported goods and added that the vast majority
of the sanctions were levied against small stores
or businesses, with very few sanctions levied
against garment factories. The Customs Director
added that because the garment factories can
import fabric to be used in garment manufacturing
duty-free, the limited violations the garment
factories have had have been for undeclared
taxable goods, such as sewing machines and other
equipment used in the manufacturing of garments.
Joint U.S. and CNMI Customs Investigations
According to officials within U.S. Customs'
Office of Investigations, fraud, diversions, or
transshipments of goods involving the CNMI do not
appear to be a problem. Since 1996, officials from
the U.S. Customs Service have conducted 16
investigations in the CNMI in cooperation with the
CNMI Customs Division. U.S. Customs provided
summary information on four of these cases. Three
cases involved narcotics smuggling, and the fourth
case involved a fugitive who fled the CNMI with
$10,000 in stolen money. U.S. Customs cited no
cases involving transshipments or diversions of
U.S.-protected goods. An Executive Director within
U.S. Customs' Office of Investigations told us
that transshipments were unlikely due to (1) the
relatively inexpensive labor available in the
CNMI, (2) the authorization to put "Made in USA"
labels on garments manufactured in the CNMI, and
(3) the fact that no quotas or duties are placed
on CNMI-manufactured garments exported to the
United States.
Further, U.S. Customs investigations of CNMI
garment factories' production capabilities have
not uncovered any problems. One of the most recent
joint U.S. and CNMI Customs investigations took
place in September 1998. U.S. and CNMI Customs
officials reviewed shipments of raw textile
materials being imported into the CNMI by garment
factories to determine if garment factories were
transshipping finished textile products through
the CNMI with the intent to obtain the duty- and
quota-free status that garments manufactured in
the CNMI receive. The review was implemented
simultaneously in two areas.
� First, physical examinations were conducted
on a limited number of containers that were
labeled as containing raw materials being imported
for production by the garment factories. During
the review, U.S. and CNMI Customs officials
conducted physical examinations of 51 containers
that had arrived from Hong Kong, Taiwan, Korea,
and Japan. Additionally, the Customs officials
reviewed CNMI Customs garment factory records and
conducted visits to garment factories.
� Second, U.S. Customs officials reviewed entry
documents, balance logbooks, and field container
inspection reports and interviewed various CNMI
Customs officials in order to identify fraud
involving the shipments of garments through the
CNMI.
U.S. Customs officials said that this
investigation did not uncover any evidence of
garment transshipments. These officials noted,
however, that the investigation identified gaps in
CNMI Customs' procedures that could allow for
possible transshipments to occur. For example,
containers are only randomly reviewed on export,
meaning that CNMI Customs agents do not routinely
physically verify quantities of garments exported.
On the basis of the garment factory
investigation, U.S. Customs said that CNMI Customs
inspections were generally thorough. U.S. Customs
officials also said that the importers'
representatives and the laborers who unloaded the
containers appeared very familiar with the way
CNMI Customs agents operated and that CNMI Customs
agents appeared to be well-respected by both
management and labor at the garment factories. The
U.S. Customs officials said that the possibility
of finished garments arriving in, or being
concealed within, inbound garment factory
containers appeared low.
The U.S. Customs Service did, however, make
several recommendations for improving CNMI
Customs' inspection procedures on the basis of its
assessment of the export controls in place during
the September 1998 investigation. Table 7 below
summarizes U.S. Customs' recommendations and the
actions the CNMI officials stated it has taken in
response to those recommendations.
Table 7: Information on U.S. Customs Service
Recommendations and Actions Taken by the CNMI
Customs Division to Implement the Recommendations
U.S. Customs Service recommendation Action taken by the CNMI Customs
Division
Amend the CNMI Customs regulations so CNMI Customs has proposed amending
that consignees are not required to the regulations to permit inspections
be present during examinations of with or without the presence of the
containerized cargo. consignee or his/her authorized
agent.
Abolish "conditional releases" in The conditional release to
which cargo containers were released consignees' premises for inspection
to consignees under seal to be ceased when CNMI Customs moved into
inspected at the consignees' premises its new facilities at the seaport in
at a later time. June 1999.
Establish a CNMI Customs CNMI Customs has established a
Containerized Freight Station at the containerized freight station at its
seaport for inspections of all seaport facilities in which suspected
containerized cargo, rather than containers are examined.
sending Customs inspectors to the
consignees' premises.
Reevaluate the process used by the CNMI Customs is working on this. It
CNMI Customs Garment Section for plans to conduct a survey of the
verifying yards of fabric used and garment factories to determine types
its correlation to pieces produced to of garments produced and the amount
make the process more consistent. of fabric used to produce those
garments in order to make the
verification process consistent.
Increase the examinations of outbound Garment factory production schedules
containerized cargo from the garment are submitted to the CNMI Customs
factories to verify quantities of Garment Section on a biweekly basis.
exported goods These production schedules are used
by CNMI Customs agents to conduct
unannounced visits to the factories
to verify the production, as well as
to conduct inspections of out-bound
containers of finished goods.
Computerize the balance logbooks that Customs in currently pursuing the
are maintained on each garment funds needed to purchase the computer
factory and input field inspection systems and software, but funds are
reports into this system for cross- currently not available locally.
reference purposes.
Provide formal training to Garment CNMI Customs has contacted the Saipan
Section agents on (1) how to Garment Manufacturing Association to
determine garment production identify agencies specializing in
capabilities, and (2) indicators of garment manufacturing to provide
transshipments. training. In addition, CNMI Customs
is also seeking assistance from U.S.
Customs to provide training.
Ensure that the Customs certification The CNMI Customs Director issued a
stamps and seals are not accessible written directive to Garment Section
to the public and are only used by staff outlining these requirements.
authorized CNMI Customs officials. In addition, the Secretary of Finance
reiterated these requirements in a
written directive.
Source: U.S. Customs Service and the CNMI Customs
Division.
Violation of CNMI Procedures
On January 19, 2000, we visited the CNMI
Customs Division's Garment Section in the course
of obtaining documentation on the procedures used
by CNMI Customs for certifying exports of garments
to the United States. Upon entering the Garment
Section, we saw an employee of one of the garment
factories using an official CNMI Customs stamp to
certify the factory's export documents. U.S.
Customs officials had also noted this when they
visited the CNMI in September 1998. We brought
this to the attention of the CNMI Customs
Director, as well as staff within the CNMI
Governor's office. The CNMI officials said that
this was a clear violation of CNMI Customs
procedures. In response to the incident, the CNMI
Customs Director issued a written directive the
following day stating that no customer is allowed
to stamp or seal export documents and that all
official stamps should be placed in a drawer out
of reach of customers and taken out only by
Garment Section staff when needed to stamp
documents. The Customs Director also warned that
staff who failed to abide by the directive could
face disciplinary action. All Customs Garment
Section staff were then required to initial and
date the directive to acknowledge the
requirements. In addition, the Customs agent who
was responsible for the incident submitted his
resignation. Staff from the CNMI Governor's Office
researched the matter and told us they determined
the Garment Section staff did follow remaining
procedures to ensure the export documents were
accurate. In addition, the staff informed us that
the Customs Division rotated its Customs agents on
a regular basis to ensure that the agents did not
become overly familiar with the customers or lax
in their duties.
Aliens' Use of Public Health Care and Public
Education and Their Involvement in Criminal
Activities
Aliens accounted for 58 percent of the
population of Saipan in 1999, 26 percent of the
fiscal year 1999 public health care expenditures,
and about 11 percent of the public school system's
operating costs for the 1999-2000 school year. The
arrest data for the five most frequent crimes in
the CNMI show that aliens accounted for between 44
and 69 percent of the arrests for these crimes,
and these percentages roughly align with the
aliens' proportion of the CNMI's population.
Health Care Issues
Regarding Aliens
According to the CNMI Department of Public
Health, tuberculosis (TB), the human
immunodeficiency virus (HIV), and syphilis are a
threat to the overall health of the population of
the CNMI. The Department of Public Health reported
that the rapid influx of poorly screened and
monitored alien workers has contributed to these
growing disease rates. In commenting on the draft
report, CNMI officials said that it has instituted
a comprehensive screening system that requires
both testing in the home country prior to entering
the CNMI and again within 10 days of entering the
CNMI. This permits the Department of Public
Health to identify and refer for treatment alien
workers to prevent the spread of infectious
diseases.
According to Department of Public Health
staff, no one in the CNMI is denied health care on
the basis of citizenship or ability to pay. In
addition, according to the CNMI's Nonresident
Workers Act, employers are required to pay for all
medical expenses of alien workers. As a result,
the expense for any health care provided to an
alien worker is to be borne by the employer. Thus,
aliens who enter as visitors and overstay would
have no insurance but would be treated.
As shown in table 1, aliens accounted for 58
percent of the population of Saipan in 1999. In
contrast, data from the Department of Public
Health show that aliens accounted for 26 percent
of the visits to and related expenditures for the
Department of Public Health in fiscal year 1999.42
Health Trends of Aliens with Infectious Diseases
in the CNMI
According to a draft of the Department of
Public Health's annual report for 1997-1998,43 the
CNMI's current health care system was developed to
meet the demands of a CNMI population of
approximately 20,000 people. The report states
that one of the greatest challenges to the CNMI's
health care system has been the rapid population
growth (see table 1). The annual report further
states that, as a result of this unanticipated
population increase, the CNMI health care system
could not provide adequate services. The impact of
infectious diseases in the CNMI is also a major
public health concern, according to the Department
of Public Health. The Department attributed this
major health concern to the rapid influx of poorly
screened and monitored alien workers who have
higher rates of TB, HIV, and syphilis than the
indigenous population of the CNMI.
TB continues to be a major health threat in
the CNMI. According to the Department of Public
Health, although the majority of active TB cases
involved alien workers, TB among the indigenous
population continued to increase at a steady rate.
Of the alien workers who have developed active TB,
most of them were already living in the CNMI
before they developed active TB, or it was
inactive at the time of their arrival. The
Department of Public Health further reported that
in 1998, 93 of the 110 diagnosed active TB cases
were from the CNMI's alien population. In 1999, 58
of the 66 diagnosed active TB cases were from the
CNMI's alien population.
The number of reported TB cases in the CNMI
increased from 1996 to 1998 (see fig. 1). Because
of the increase in the number of alien workers, in
1996 the Department of Public Health developed
regulations requiring the screening of alien
workers for TB, as well as HIV and syphilis.44 This
increased screening contributed to the reported
increase in TB cases from 1996-1998.
Figure 1: TB Cases in the CNMI,
1992-1999
Source: CNMI Department of Public Health.
According to the CNMI Department of Public
Health, the true incidences of HIV and syphilis
are not clear. Although the Department of Public
Health has mandated that these diseases be
reported, the Department stated that several
factors make the reported rates of these diseases
questionable. One such factor has been the
increase in Chinese "clinics." The Secretary of
Public Health stated that many Chinese workers in
the garment factories are not familiar with
Western medicine and medical care and may seek
treatment from a Chinese clinic rather than report
to a Department of Public Health facility.
Investigative staff from the Department of
Public Health visited known clinics to inspect
their facilities and ensure that the clinics were
not dispensing prescription drugs or practicing
medicine without a license. However, the Secretary
of Public Health recognized that an unknown number
of these clinics were operating in private homes
and had not been inspected.
Alien Health Screening Program
The CNMI Department of Public Health reported
that many alien workers and their families were
coming from countries that have endemic infectious
diseases that could ultimately become a public
health concern for the residents of the CNMI.
Furthermore, the Department of Public Health found
that diseases transmitted by alien workers
frequently originated from infected workers who
showed little outward appearance of being ill. As
a result, infected alien workers could transmit a
wide range of communicable diseases and infections
to other alien workers and the general public. To
deal with these health concerns and the increasing
rate of TB among alien workers, the Department of
Public Health instituted a mandatory health
screening program for all alien workers in the
CNMI. Effective February 25, 1998, the CNMI
Department of Public Health's Alien Health
Screening Program required all alien workers and
their families already present in the CNMI to be
screened for TB, HIV, and syphilis. The Alien
Health Screening Program also required health
screens for aliens within 10 days of entering the
CNMI, and every year thereafter for those aliens
remaining in the CNMI.45
According to the rules governing the CNMI's
Alien Health Screening Program, alien workers are
required to schedule an appointment for a physical
examination with a physician approved by the
Department of Public Health within 10 days of
their arrival in the CNMI.46 These health screens
are in addition to the required medical
examinations that prospective alien workers are
required to have in their home countries prior to
coming to the CNMI. The physical examinations
conducted in the CNMI by private clinics as part
of the Alien Health Screening Program involve
tests that screen for TB, HIV, and syphilis. The
costs of the physical examinations and screening
tests for alien workers are to be paid by the
aliens' employers. Results of the physical
examinations are to be provided to the worker and
the Department of Public Health within 45 days
from the date of the examination. The Department
of Public Health then has up to 10 working days
from receipt of the physical examination form to
determine whether the alien worker qualifies to
receive a health certificate. If the alien worker
is found to be physically fit, in good health, and
free from the screened communicable diseases, the
worker receives a health certificate good for 1
year from the date it was issued. At the end of
the year, if the alien intends to remain in the
CNMI, he or she is required to undergo testing
again to receive a new certificate for another
year. The cost of the health certificate is $20
and is to be paid by the employer.47 If the alien
worker tests positive for any of the communicable
diseases, the alien will receive a health
certificate subject to a treatment regimen. If the
alien worker fails to comply with the treatment
regimen, the Department of Public Health will
recommend to DOLI that the worker be deported.
According to data provided by DOLI, only two
aliens have been deported since the inception of
the Alien Health Screening Program for
noncompliance with the prescribed treatment
regimen. Both aliens had tested positive for TB.
In addition to screening alien workers, the
Department of Pubic Health also requires physical
examinations and health screens for the dependents
of alien workers living in the CNMI. The same
rules that apply to alien workers apply to their
dependents, except that dependents who are age 15
and under are screened only for TB. These
dependent minors, however, do need to have
documentation that they have received all the
childhood immunizations required by the Department
of Public Health. The other difference is that
depending on the agreement between the alien
worker and the employer, the alien worker may have
to pay for the health screens and health
certificates for any dependent.
Results of the Alien Health Screening Program
Since February 25, 1998, the total number of
alien health screens conducted through the end of
1999 was 70,161. Table 8 shows data on the numbers
and results of the alien health screens conducted
in 1998 and 1999.
Table 8: Data on the Results of Alien Health
Screenings for 1998 and 1999
Year Health TB HIV Syphilis
screens
Cases Positive Cases Positive Cases Positive
referred cases referred cases referred cases
1998 37,280 309 93 6 6 170 96
1999 32,881 165 58 20 3 105 36
Note: Referred cases are those where initial tests
showed possible infection.
Source: CNMI Department of Public Health.
Aliens' Access to and Use of Public Health Care
According to the Department of Public Health,
no one in the CNMI is denied health care that can
be provided in the CNMI on the basis of
citizenship or ability to pay. Health care
benefits differ, however, depending on the status
of the individual (i.e., citizen or alien). CNMI
citizens are eligible to participate in the
Medical Referral Program within the Department of
Public Health. Under this program, the Department
facilitates the referral of patients to recognized
health care facilities outside the CNMI for
extended medical care.48 This program is designed
to provide CNMI citizens with a means of receiving
medical care and treatment that is not available
in the CNMI.
In commenting on this report, CNMI officials
noted that alien workers also qualify for the
Medical Referral Program, but the costs of the
referrals are the responsibility of the employer.
If an alien worker needs further medical
attention, the alien's physician is to present the
case to the Medical Referral Committee. In turn,
the Committee is to make the decision on whether
to refer the alien worker off-island or not,
purely on the basis of medical justification. Most
medical referrals of alien workers usually go to
Manila, Philippines, because of the immigration
issues related to entering either Guam or Honolulu
(where most of the CNMI citizen medical referrals
are sent). If the case is a medical emergency, the
CNMI has been able to obtain permission from INS
to have the patient enter Guam for medical
treatment. Also, according to the CNMI officials,
there have been cases in the past where the CNMI
would send an alien worker off-island for medical
referral who also happens to be either unemployed
or illegal. In either event, the issue is not
status, but the medical needs of the patient.
In addition to the medical referral program,
CNMI law requires employers to acquire bonding on
each employee. Part of the bond covers $3,000 in
medical expenses or the expenses of embalming and
repatriation.49 Further, the Department of Public
Health's Medicaid Program does not pay health care
benefits for alien workers or their dependents,
but it will cover the dependents of alien workers
who are born in the CNMI and are thus citizens.
Officials from the CNMI Department of Public
Health had no specific data, but they estimated
that about 15 percent of the alien patients
reporting to the Department of Public Health
facilities during 1998 and 1999 were either
unemployed or illegal aliens whose medical costs
may have had to be borne by the CNMI government.
Available population and patient data show
that comparatively few aliens visit Department of
Public Health facilities for treatment compared to
the resident (citizen) population. Although aliens
accounted for about 58 percent of the population
of Saipan in 1999, as shown in table 9, they
accounted for between 26 and 29 percent of the
patient visits to Department of Public Health
facilities each year during 1994 through 1999. In
contrast, although they accounted for 42 percent
of the Saipan population in 1999, CNMI citizens
accounted for between 71 and 74 percent of the
patient visits to Department of Public Health
facilities each year during 1994 through 1999.
Table 9: Data on the Allocation of CNMI Public
Health Care Expenditures, by Number of Visits, for
Fiscal Years 1994 through 1999, by Citizenship
Category
Yea U.S. citizens/residentsa Aliensb Totals
r
No. Percent No. Percent Expenditur No. Expenditu
of of Expenditur of of esc of visits res
visits visits esc visits visits
199 113,037 73 $18,236,90 42,565 27 $6,867,255 155,602 $25,104,1
4 5 60
199 103,414 73 19,844,330 37,397 27 7,176,189 140,811 27,020,51
5 9
199 101,670 73 21,895,317 37,281 27 7,985,642 138,951 29,880,95
6 9
199 88,026 72 20,499,700 34,676 28 8,075,427 122,702 28,575,12
7 7
199 93,214 71 22,770,271 38,389 29 9,377,647 131,603 32,147,91
8 8
199 91,344 74 24,863,215 32,158 26 8,753,189 123,502 33,616,40
9 4
Notes: Data on patient visits and expenditures are
as of the end of each fiscal year (Sep. 30th).
The expenditure data do not include medical
referrals or Medicaid expenses.
aIncludes those born in the CNMI, U.S. citizens
born outside the CNMI, and permanent resident
aliens.
bIncludes aliens, alien workers, those with no
U.S. passport or permanent resident card, and
other patients-mainly Micronesians, Pacific
islanders, and people from the FAS.
cThe public health care costs for each of the
citizenship categories for each year were
approximated by taking the total expenditures and
dividing that by the total number of visits to
come up with an average cost per patient visit.
This figure was then multiplied by the relevant
number of patient visits per year to arrive at the
public health care costs for each citizenship
category.
Source: CNMI Department of Public Health.
According to the Secretary of Public Health, alien
workers may account for such a comparatively low
percentage of the patient visits because the vast
majority of the alien workers in the CNMI are
young (in their 20s); do not have chronic diseases
(e.g., diabetes); and do not need frequent care.
Another factor that could explain this is that
alien workers may be receiving needed health care
at facilities other than those operated by the
Department of Public Healthsuch as Chinese
clinics.
Aliens' Use of CNMI Public Schools
The alien student population in the CNMI
Public School System is not proportional to the
overall alien population in the CNMI.50 Survey data
show that aliens have accounted for the majority
of the population of the CNMI in recent years.
However, data collected by the CNMI Public School
System show that alien students have accounted for
less than 15 percent of the total student
enrollment in the CNMI's public schools during the
past 3 years, and the percentage of alien students
has decreased each school year since 1997.
Alien Student Enrollment
The CNMI's Board of Education requires
compulsory school attendance for every child
between the ages of 6 and 16, regardless of the
student's citizenship. The first year for which
the CNMI Public School System began to collect
data on the citizenship of the students enrolled
in its schools was 1997. As table 10 shows, the
enrollment of alien students in the CNMI Public
School System has decreased each year since the
1997-1998 school year. For school year 1999-2000,
alien students accounted for about 11 percent of
the student population.
Table 10: Citizen and Alien Student Enrollment in
the CNMI Public School System for School Years
1997-1998, 1998-1999, and 1999-2000
School year Citizen students Alien studentsa Total students
Number Percent Number Percent
1997-1998 7,386 85.3 1,272 14.7 8,658
1998-1999 7,742 86.3 1,230 13.7 8,972
1999-2000b 8,115 88.8 1,028 11.2 9,143
aIncludes children of alien workers and other
nonresidents-mainly Micronesians, Pacific
islanders, and people from the FAS.
bEnrollment data are as of February 2000.
Source: CNMI Public School System.
Impact of Aliens on the Public School System's
Operating Costs
As part of the CNMI government's austerity
program, the current administration has reduced
its funding of government programs, including
education. The operating budget for the CNMI
Public School System has declined each year since
the 1997-1998 school year. At the same time the
school system's operating budget has been
declining, student enrollment has increased. As a
result, the per student operating costs have also
decreased each year since the 1997-1998 school
year, as shown in table 11. However, the school
system has experienced an increase in student
enrollment since the 1997-1998 school year due to
the growing number of citizen students. As a
result, the operational costs for providing
educational services to alien students declined
from about $8.3 million for the 1997-1998 school
year to about $7.3 million for the 1998-1999
school year, and then to about $6.0 million for
the 1999-2000 school year (see below).51
Table 11: Estimate of the Operating Costs for
Educating Citizen and Alien Students in the CNMI
Public School System for
School Years 1997-1998, 1998-1999, and 1999-2000
School Total Total Per Citizen students Alien studentsc
year enrollme operating student
nt budgeta operating
costsb
Number Operating Number Operatin
costsb g costsb
1997- 8,658 $56,616,832 $6,539 7,386 $48,297,0 1,272 $8,317,6
1998 54 08
1998- 8,972 53,091,133 5,917 7,742 45,809,41 1,230 7,277,91
1999 4 0
1999- 9,143 53,024,322 5,799 8,115 47,058,88 1,028 5,961,37
2000 5 2
aThe CNMI Public School System's operating budget
figures exclude small amounts of revenues from
donations, tax credit gifts, interest earned,
program revenues from federal school meal
programs, or local tax revenues dedicated to
assist school meal programs.
bAll costs have been rounded to the nearest whole
dollar. Because of rounding, the sum of the
operating costs for citizen and alien students may
not equal the total operating budget.
cAccording to a CNMI study, FAS residents made up
4.4 percent of the CNMI's population but accounted
for 7.8 percent of fiscal year 1998 public school
costs.
Source: CNMI Public School System.
Involvement of Aliens in Criminal Activities
Table 12 compares the arrest rates for
citizens and aliens in 1996 and 1997.52 Aliens
comprised between about 44 percent and 69 percent
of the arrests for the five most frequent crimes
in the CNMI in those years for which data were
available, and these percentages roughly align
with the aliens' proportion of the CNMI
population.
Table 12: Data on Arrests for the Five Most
Frequent Crimes in the CNMI, by Citizenship, for
July-December 1996 and 1997
Arrest/citizenshi July-December 1996 July-December 1997 Total
p category
Number Percent Number Percent Number Percent
Assault
Citizens 69 39.9 128 41.6 197 41.0
Aliens 104 60.1 180 58.4 284 59.0
Burglary
Citizens 5 31.3 13 50.0 18 42.9
Aliens 11 68.8 13 50.0 24 57.1
Criminal mischief
Citizens 18 51.4 32 56.1 50 54.3
Aliens 17 48.6 25 43.9 42 45.7
Disturbing the
peace
Citizens 75 38.3 104 43.2 179 41.0
Aliens 121 61.7 137 56.8 258 59.0
Theft
Citizens 27 39.1 46 47.9 73 44.2
Aliens 42 60.9 50 52.1 92 55.8
Totals
Citizens 194 39.7 323 44.4 517 42.5
Aliens 295 60.3 405 55.6 700 57.5
Overall totals 489 100.0 728 100.0 1,217 100.0
Note: Arrest data were available only by
ethnicity. Therefore, in this table, citizens
consist of Chamorros and Caroliniansthe two ethnic
groups indigenous to the CNMIand Caucasians. Other
ethnic groups, such as Filipinos and Chinese, are
considered aliens.
Source: CNMI Statistical Analysis Center.
Criminal Background Checks Required for Entry and
Renewal of Permit cards
As previously discussed, each alien worker is
required to have a criminal background check
conducted in the alien's home country as part of
the CNMI's approval process for allowing alien
workers entry into the CNMI. In addition to the
background check for criminal activity provided by
the alien before or when entering the CNMI, the
Department of Public Safety is to perform a check
for criminal activity in the CNMI for each alien
worker who remains beyond 1 year. This check is
done as part of the permit renewal process. If the
alien worker is found to have been convicted of a
crime, such as a felony or two or more
misdemeanors, the alien can be deported. Data
provided by DOLI showed that two aliens were
deported in 1998 and five aliens were deported in
1999 because they had felony convictions.
Conclusion
Alien workers are required to provide the
results of criminal background checks from their
home countries to CNMI Immigration officials
personally when they enter the country or to have
the results sent directly to DOLI officials by
their home countries. According to the Acting
Director of Immigration, law enforcement agencies
in Hong Kong and South Korea provide the results
of criminal background checks for prospective
employees directly to DOLI. In contrast, alien
workers from the Philippines and China bring the
results of their criminal background checks with
them to the CNMI. Although no data are available
on the number of alien workers submitting
fraudulent criminal history records, the
opportunity exits for this to occur when records
are carried by hand. Furthermore, the CNMI does
not have any practical means to verify the
criminal histories of arriving alien workers.
Exploring the feasibility of having additional
home countries' law enforcement agencies send the
results of all prospective alien workers' criminal
background checks directly to DOLI could reduce
the opportunity for fraud. Alien workers with
disqualifying criminal histories would not be able
to alter the results of the criminal background
checks because the documents would not be in their
possession. The Acting Director of Immigration
indicated that he would prefer to have the law
enforcement agencies send the results of all
prospective alien workers' criminal background
checks directly to DOLI.
Agency Comments
We requested comments on a draft of this
report from the CNMI Governor's Office, the
Department of the Interior, and INS. In addition,
we discussed with U.S. Customs Service officials
sections of the draft report that related to its
operations involving the CNMI. U.S. Customs
officials informed us on April 7, 2000, that they
concurred with the report sections pertaining to
the U.S. Customs Service's involvement in the
CNMI.
CNMI Government
The Governor of the CNMI provided technical
comments on a draft of this report on April 7,
2000. The comments have been incorporated into
the report, where appropriate.
Department of the Interior
On April 28, 2000, the Deputy Secretary of
the Interior for Policy, Management and Budget
provided written comments on a draft of this
report (see app. II). Overall, the Department of
the Interior felt that the report lacked the
critical evaluation and analysis to determine
whether the CNMI's procedures for processing
aliens and merchandise met required standards and
that the report could be interpreted as an
endorsement of the CNMI's procedures. However,
our objectives were not to evaluate the
effectiveness of the CNMI's procedures for
controlling aliens and merchandise but to discuss
the CNMI's policies and procedures for processing
aliens and merchandise. We have modified the
report to more explicitly state our objectives. A
large number of the Department of the Interior's
comments fall into concerns about the scope of our
work and requests to include data that were not
available.
First, the Department of the Interior offered
a number of comments related to expanding the
scope of our work to address additional topics.
These additional topics were not part of the work
and, as such, remain outside the scope of this
report. The topics the Department of the Interior
suggested we add included:
� an evaluation of the effectiveness of
employer-reporting as a means to evaluate the
effectiveness of the CNMI's deportation process;
� issues related to labor practices, including
the sale of work permits, cash bonding for
security guards, and the commitment of the CNMI
Government to improve labor conditions for alien
workers;
� an evaluation of the effectiveness of LIIDS;
� the lack of agreements reached between
federal agencies and the CNMI;
� an assessment of whether the CNMI's labor
practices meet standards addressed in Memoranda of
Understanding with federal agencies;
� discussion of alleged due process violations;
and
� an evaluation of the existence of fraud and
malfeasance within the CNMI's Customs and
Immigration Divisions.
Second, the Department of the Interior commented
that the report should include a more in-depth
discussion of crime and prosecution rates,
especially as they relate to the alien population.
What limited data that differentiate between CNMI
citizens and aliens in relationship to crime is
shown in table 12. No data were available from the
CNMI or the Department of Justice on prosecutions
that distinguished between the two groups. Also,
in relation to crime, the Department of the
Interior suggested adding data on organized crime
in the CNMI. According to Justice data, there were
no organized crime prosecutions for 1992 through
1999. We could not find any systematic data on
organized crime in the CNMI. With respect to
deportation data, we have devoted an entire
section of the report to deportation of aliens
(see pp. 14-15). This section includes the best
and most recent data available on both the number
of aliens who have been deported in recent years
and the reasons for those deportations.
In addition to the above comments, the Department
of the Interior made a number of suggestions
related to topics discussed in the report. We have
included Interior's suggestions in the report,
where appropriate. Also, the Department of the
Interior provided other comments for which we did
not make changes. See appendix II for a more
detailed discussion of the Department of the
Interior's comments.
INS
On May 1, 2000, the General Counsel for INS
provided written comments on a draft of this
report (see app. III). INS stated the
administration's position is that the Immigration
and Nationality Act (INA) should be extended to
the CNMI, with appropriate transition provisions.
INS added that this position is based on policy
reasons that have been thoroughly stated by other
agencies and INS. Further, INS recognized that we
have not been asked to address the policy
questions of applying the INA to the CNMI, but
rather what are the CNMI's current procedures.
Accordingly, INS said our report should clearly
state that our objectives were not to address
immigration policy issues and thereby avoid
creating the impression that we reviewed the
procedures and found them effective. We have
revised the report to more explicitly state that
our objectives did not include discussing the
CNMI's immigration policy or assessing the
effectiveness of the CNMI's implementation of its
immigration laws.
As agreed with your office, unless you
publicly announce its contents earlier, we plan no
additional distribution of this report until 30
days from its issue date. At that time, we will
send copies to Senator Ted Stevens, Senator Robert
C. Byrd, Senator Slade Gorton, Senator Peter V.
Domenici, Senator Frank R. Lautenberg, Senator
Frank Murkowski, Senator Jeff Bingaman,
Representative C.W. Bill Young, Representative
David Obey, Representative Ralph Regula,
Representative Norman D. Dicks, Representative Don
Young, and Representative George Miller in their
capacities as Chairman or Ranking Minority Member
of Senate or House Committees and Subcommittees.
We are also sending copies of this report to the
Honorable Jacob J. Lew, Director, OMB; the
Honorable Bruce Babbitt, Secretary of the
Interior; Ferdinand Aranza, Director, Office of
Insular Affairs; and the Honorable Pedro P.
Tenorio, Governor, Commonwealth of the Northern
Mariana Islands. We will also make copies
available to others on request.
If you or your staff have any questions
concerning this report, please contact me or James
M. Blume, Assistant Director, on (202) 512-8777.
The other major contributors to this report were
Christopher H. Conrad, Kristeen G. McLain, Michael
H. Little, and Ann H. Finley.
Sincerely yours,
Laurie E. Ekstrand
Director
Administration of Justice Issues
_______________________________
1 Hereafter referred to as the Covenant.
2 The high-risk countries include Afghanistan,
Albania, Armenia, Bangladesh, Bosnia, Bulgaria,
Croatia, Cuba, Czechoslovakia, Estonia, Hungary,
India, Iran, Iraq, Latvia, Libya, Lithuania,
Macedonia, Mongolian People's Republic,
Montenegro, Nepal, Nigeria, North Korea, Peoples
Republic of China (except for garment factory
workers), Poland, Romania, Russia, Serbia, Sri
Lanka, and Vietnam.
3DOLI encompasses separate divisions of
Immigration and Labor. A Director who reports to
the Secretary of Labor and Immigration heads each
division.
4 The CNMI allows employers whose employees have
left the CNMI to replace them (within 90 days)
with someone from outside the CNMI. The employer
is also entitled to replace the employee who left
with a locally hired alien worker. If the
employee has left the position but remains in the
CNMI, then the employer must find a replacement
from the workforce within the CNMI, either citizen
or alien.
5 In this report, (1) diversion is the movement of
cargo or a vessel from the United States to a port
other than that originally designated and thereby
shipping merchandise to countries that are not
permitted to obtain such merchandise (e.g.,
computer or other technology goods); and (2)
transshipment is the importation of goods to the
United States declaring a false country of origin
to circumvent quota and/or other restrictions
applicable to the shipment, such as manufactured
garments that were not manufactured in the CNMI
and as result should be subject to U.S. import
quotas and restrictions.
6 Saipan is the most populous island and accounts
for about 90 percent of the CNMI's population.
7 Included in the alien population are citizens of
the Republic of the Marshall Islands, the
Federated States of Micronesia, and the Republic
of Palau, which are generally called the Freely
Associated States (FAS). The FAS are sovereign
nations that have compacts of association with the
United States. FAS citizens are not U.S.
citizens, but they have the right to live and work
in the CNMI.
8 For the periods extending from July to December
in 1996 and in 1997, the five most frequent crimes
were assault, burglary, criminal mischief,
disturbing the peace, and theft.
9 The islands of Anatahan and Agrihan, which are
located at the north end of the island chain, are
inhabited by a handful of individuals.
10 Section 502 of the Covenant provides a formula
to determine which other laws apply or do not
apply.
11 An Economic Study of the Commonwealth of the
Northern Mariana Islands, Business Development
Center, Northern Mariana College, with funding
provided by OIA, Oct. 1999.
12Population data more current than 1995 were
available for Saipan only. To be consistent across
all years, we show population changes for Saipan
only, rather than all of the CNMI. The 71,790
figure was published by the CNMI Department of
Commerce and is based on census figures in 1995
and the growth rate of the population between 1990
and 1995. However, according to the CNMI
Governor's Office, immigration data, school
enrollment, hospital records, nonrenewal of
business licenses, and other sources all indicate
that there are fewer people in Saipan than 71,790.
13 According to CNMI officials, all alien workers
and the vast majority of the visitors who entered
the CNMI in 1999 entered through the Saipan
International Airport.
14 Only those alien workers who are employed in
managerial, professional, or technical occupations
in which they earn $20,000 or more per year are
allowed to bring immediate relatives to the CNMI.
In 1999, 33,027 permits were issued to alien
workers. An additional 891 permits were issued for
immediate relatives of alien workers.
15 For more information on alien health screens,
see the section entitled "Alien Health Screening
Program."
16 In commenting on this report, the Department of
the Interior noted that although small firms are
required to post cash to guarantee 3 months
salary, airfare to the worker's country of origin,
and a bond for medical coverage, large companies
are not required to make such cash commitments.
17 Approximately 40 percent of the work permits
issued in 1999 were issued to Filipinos.
18 This is the government agency in the Philippines
responsible for all aspects of overseas employment
of its citizens.
19 According to the Secretary of Labor and
Immigration, Chinese workers are hired only for
work in garment factories.
20In some cases, permit cards for alien workers are
made in advance and available to the alien workers
at the airport.
21See the section entitled "Overview of LIIDS" for
more information on LIIDS.
22The 33,027 figure does not reflect an actual head
count of alien workers because some workers are
issued new permits within the same year for such
things as having a consensual transfer from one
employer to another, replacing a lost permit card,
etc.
23In 1999, the CNMI Government signed into law
Public Law 11-76, which placed a cap on the number
of alien workers in the garment industry. The CNMI
House of Representative recently passed a bill
(H.B. 12-39) that seeks to, among other things,
remove the cap, but the Governor's Office has
stated that the Governor is committed to the cap
and will veto any legislation that seeks to repeal
the cap.
24 Data were not available on the reasons why the
number of excludable aliens significantly
decreased between 1998 and 1999.
25 P.L. 3-66, August 18, 1983.
26 P.L. 11-6, March 27,1998.
27 In commenting on this report, the Department of
the Interior noted that there may also be
incentives for employers not to report alien
workers who overstay their authorized time. For
instance, the employer could pay the alien worker
off the books, avoiding paying a legal wage.
28BMS is being used in Laos.
29 In addition to the BMS software, the new system
will also include a wide area network to link CNMI
Immigration sites and "Border Guard" passport
readers.
30 CNMI officials said that the Northern Mariana
Islands District Court ruled that these
inspections were unconstitutional (C.A. 99-0018).
As a result, these inspections have been halted,
and DOLI is redrafting the statutes to satisfy the
court.
31 P.L. 11-6 grants the CNMI Governor the
authority to grant exemptions from the moratorium
for certain purposes. In commenting on this
report, the Department of the Interior stated that
the Governor has granted over 2,384 exemptions.
32 In commenting on this report, the Department of
the Interior stated that aliens who were granted
this limited immunity could apply for a temporary
work permit, and the Moratorium Law (P.L. 11-6)
did not prohibit employers from hiring them.
33 After remaining outside of the CNMI for at least
6 months, they can become eligible to return to
the CNMI to work. Those alien workers holding
"professional" or "executive" positions who earn
$30,000 per year or more are exempt from this law.
34 These laws include the Nonresident Workers Act,
the CNMI Minimum Wage Act, and the Federal
Occupational Health and Safety Act.
35 Excise taxes are imposed on the goods when they
first enter the CNMI.
36 The CNMI Customs Division does, however,
maintain data on fabric imported for use in the
CNMI's garment factories.
37 Asian countries are considered high risk because
of the increased likelihood that there will be
unreported goods or that the values listed for the
imported goods will be understated.
38 According to the CNMI Customs Director, all
goods imported into the CNMI from the United
States are shipped via Guam rather than shipped
directly to the CNMI.
39A broken seal is an indication of possible
tampering with the contents of the container.
40 Because fabric imported into the CNMI for use in
garment factories is duty free, CNMI Customs
tracks the quantities of the fabric used to ensure
that it is being used for manufacturing garments
and not for resale purposes.
41 The CNMI Customs Compliance Section processes
the sanctions.
42 We do not know if aliens were receiving needed
health care at facilities other than those
operated by the Department of Public Health, or if
the aliens were not in need of health care.
43 The draft report is dated February 4, 2000.
44 The delay between the development of the
regulations in 1996 and the implementation of the
Alien Health Screening Program in February 1998
was mainly due to the concerns by the prior CNMI
administration regarding the financial burden
being placed on the business community to pay for
the Program.
45 The categories of aliens covered by the Alien
Health Screening Program include alien workers,
the immediate relatives of alien workers, and
aliens who are employed by the CNMI government.
46 According to CNMI officials, any physician,
health maintenance organization, or other CNMI
medical provider licensed by the Medical
Profession Licensing Board can provide the health
screenings.
47 According to the Secretary of Public Health, the
CNMI Government has collected about $1.3 million
in health certificate fees since the inception of
the Alien Health Screening Program in February
1998. He added that it takes about $600,000 a year
to operate the Alien Health Screening Program.
48 For example, the Department of Public Health has
agreements with medical facilities in Guam;
Hawaii; and San Diego, CA, for providing medical
care to CNMI residents that cannot be provided in
the CNMI.
49 According to CNMI officials, these bonds are
purchased by employers from private sector
insurance agencies who sell bonds that conform to
the standards required by the alien labor rules
and regulations. Thus, there is no CNMI
Government bond fund, and each private company
that sells the bonds maintains its own funds.
50 One possible reason why the alien student
population in the CNMI Public School System is not
proportional to the alien population is because
anyone born in the CNMI becomes a citizen. Thus,
although the parents may be aliens, the children
could be citizens.
51We did not include data on capital costs because
they were not available.
52Arrest data were available only by ethnicity.
Therefore, citizens consist of Chamorros and
Caroliniansthe two ethnic groups indigenous to the
CNMIand Caucasians. Other ethnic groups, such as
Filipinos and Chinese, are considered aliens.
Appendix I
Federal Agencies Represented in the CNMI
Page 43GAO/GGD-00-97 Immigration and Customs in th
e Northern Mariana Islands
Eight federal agencies have representatives
stationed in the Commonwealth of the Northern
Mariana Islands (CNMI). The following is a list of
these federal agencies, along with a brief
description of each agency's roles.
� Department of the Interior's Office of
Insular Affairs - Has authority over insular areas
like the CNMI that are not explicitly covered by
another federal agency.
� Department of Labor, Wage and Hour Division -
Investigates and brings charges for violations of
overtime pay requirements, child labor laws, and
recordkeeping requirements.
� Drug Enforcement Agency (DEA) - Enforces U.S.
drug laws and has entered into a Memorandum of
Understanding with CNMI's Department of Public
safety (DPS ) to form a Joint Task Force that
focuses on prevention of drug-related crimes. DEA
also assists DPS with local investigations of
crimes where drugs are involved and provides
training for local law enforcement agencies. DEA
also has a Memorandum of Agreement with CNMI
Customs. Two CNMI Customs agents are assigned to
DEA as taskforce agents.
� Federal Bureau of Investigation (FBI) -
Investigates violations of federal laws and
provides training, assistance and support to local
investigations by CNMI's DPS. The FBI also entered
a Memorandum of Understanding with CNMI's DPS to
form a Joint Task Force that works on a broad
spectrum of crimes. A FBI and CNMI Customs Joint
Task Force is being implemented. CNMI Customs is
to provide one member to the taskforce.
� Immigration and Naturalization Service (INS)
- Provides intelligence to CNMI's DPS concerning
illegal activities involving foreign nationals and
provides training to Immigration staff.
� National Labor Relations Board - Investigates
and brings charges for violations of the National
Labor Relations Act, such as employees' rights to
form unions.
� United States Attorney's Office - Prosecutes
violations of federal laws in the Federal District
Court in the CNMI.
� United States Marshal Service - Provides
security for the United States District Court and
escorts convicts in and out of the CNMI for
Federal Court proceedings.
In addition to the eight agencies represented in
the CNMI, other agencies are available to provide
assistance to the CNMI government as needed. For
example, the U.S. Customs Service has agents in
Guam and Hawaii who can provide assistance to CNMI
Customs; the Bureau of Alcohol, Tobacco and
Firearms can provide assistance regarding federal
firearms laws; the Occupational Safety and Health
Administration has staff that come to the CNMI on
a periodic basis to conduct investigations; and
the Centers for Disease Control and the U.S.
Public Health Service both have working
relationships with the CNMI Department of Public
Health.
Appendix II
Comments From the Department of the Interior
Page 57GAO/GGD-00-97 Immigration and Customs in th
e Northern Mariana Islands
See comment 3.
See comment 2.
See comment 1.
Note: GAO comments supplementing those in the
report text appear at the end of this appendix.
See comment 4.
See comment 6.
See comment 5.
See comment 10.
See comment 9.
See comment 8.
See comment 7.
See comment 15.
See comment 14.
See comment 13.
See comment 12.
See comment 11.
See comment 17.
See comment 16.
See comment 2.
See comment 22.
See comments 19 and 20.
See comment 21.
See comment 2.
See comment 18.
See comment 25.
See comment 24.
See comment 23.
See comment 3.
See comment 28.
See comment 27.
See comment 26.
See comment 32.
See comment 31.
See comment 30.
See comment 27.
See comment 28.
See comment 29.
See comment 34.
See comment 33.
See comment 13.
The following are GAO's comments on the Department
of the Interior's letter.
GAO Comments
1. According to information provided to us by the
CNMI Government on May 4, 2000, the Manila office
was not closed, just scaled down in size. However,
we have amended the report to delete the mention
of the Manila office.
2. Subsequent to when we originally drafted of
this report, the CNMI House of Representatives
passed House Bill (H.B.) 12-39. We have amended
the report to add a section on "Recent Legislative
Actions" to acknowledge the passage by the House
of this legislation that, among other things,
seeks to repeal some of the reform acts passed by
the CNMI's 11th legislature (see p.19).
3. We modified the report to recognize that
dependents of alien workers who are born in the
CNMI are citizens who are eligible for the
Medicaid program (see p. 32).
4. Because our report focussed mainly on CNMI's
immigration and customs issues, we provided the
CNMI, INS and U.S. Customs an opportunity to
comment on the draft report. Customs agreed with
the facts and had no further comments on the
report. INS' comments are discussed in the report
and are included in appendix III. We did not
solicit comments from other federal agencies. For
example, we did not seek comments from the
Department of Labor because labor issues were
outside the scope of our review. We did, however,
offer to discuss the job with Department of Labor
officials, but they declined.
5. We have amended the report to more explicitly
state that since 1984, Members of Congress and
successive administrations have expressed concerns
regarding the CNMI's ability to effectively
implement its immigration laws and control the
export and import of goods (see p. 1).
6. Much of the information we gathered from
federal officials in the CNMI was general
background information regarding the roles of
their respective agencies in relation to the CNMI.
In addition, none of the officials we interviewed
indicated that they needed more time with us to
cover the issues related to our work.
INS officials provided information on a number of
issues, including Labor and Immigration
Identification and Documentation System (LIIDS).
Unfortunately, the data INS provided on LIIDS were
not current.
We report on U.S. Customs Service investigations
conducted in the CNMI in the section entitled
"Joint U.S. and CNMI Customs Investigations" (see
p. 23).
We report that the Department of Justice provided
us with data that showed that there have been no
prosecutions of organized crime cases involving
the CNMI during the period 1992-1999 (see p. 38).
The Centers for Disease Control and Prevention
provided data on health trends and disease rates
in the CNMI, but we received more comprehensive
and current data from the CNMI.
Lastly, as stated earlier, the Department of Labor
informed us that it was not necessary to meet with
us to discuss this report.
7. A review of the allegations Interior identified
is beyond the scope of our audit. We did note,
however, that the Northern Mariana Islands
District Court ruled that surprise inspections to
work sites were unconstitutional (see fn. 30, p.
18). Finally, as stated earlier, an examination of
worker conditions and the extent to which
immigration controls are enforced was beyond the
scope of our review.
8. The report does not state that the CNMI has a
unique status. We simply describe the current
status and laws of the CNMI.
9. Pursuant to Public Law 94-241 (in which
Congress approved the Covenant), the Northern
Mariana Islands became a "self-governing
commonwealth" to be known as the Commonwealth of
the Northern Mariana Islands.
10. The report states that the Covenant allows the
CNMI to implement and enforce its own immigration
and customs policies and procedures. This is an
accurate statement. We did not state or intend to
imply that this is necessarily an attribute of
self-government.
11. As indicated earlier, the scope of our review
was to report on the status and laws of the CNMI.
Our report did not address the other United States
insular areas. We agree and stated in the report
that the CNMI lies outside U.S. Customs territory.
Further, Public Law 94-241 provides that the
Northern Mariana Islands will not be included
within the Customs territory of the United States.
12. Our report did not address the status and laws
of the other insular areas. With regard to the
applicability of federal laws in the CNMI, we
accurately describe certain current exceptions
from federal law that are provided by the
Covenant, as approved by Congress.
13. The text has been amended to state that there
are no firm data on the number of illegal aliens
in the CNMI and to include data on the estimates
from the CNMI and INS (see p. 6).
14. The report has been modified to recognize that
although there are incentives for employers to
report overstaying aliens, there may also be
incentives for them not to report (see fn. 27, p.
14).
15. The Department of the Interior's suggested
approaches for determining the number of illegal
aliens in the CNMI would not necessarily produce
more reliable data.
16. We have amended the report to state explicitly
that DOLI's number of 33,027 issued permits
excludes workers employed under temporary work
authorizations while their labor complaints are
being investigated by various local and federal
agencies (see p. 13).
17. We reported that the CNMI recognized the
limitation of LIIDS (see p. 14). We also state
that the CNMI has been seeking to develop a
complete immigration tracking system that would
include automated tracking of not only alien
workers, but arrival and departure information on
all visitors (see p. 15).
18. Prescreening is not nonexistent in countries
other than the Philippines. All prospective alien
workers, regardless of their home countries, are
required to go through the same prescreening
procedures for detecting disqualifying
communicable diseases and criminal histories (see
the section entitled "Prescreening of Alien
Workers" that begins on p. 10).
19. We do not attempt to address the effectiveness
of the reform legislation, but rather provide the
status of the legislative reforms passed by the
CNMI legislature in recent years that pertain to
alien workers.
20. CNMI P.L. 11-6 grants the CNMI Governor the
authority to grant exemptions from the moratorium
for certain purposes. According to CNMI Government
officials, exemptions have been granted, but we
did not confirm the number of exemptions granted
nor the reasons for those exemptions. We have
included the number of exemptions the Department
of the Interior reported in the report (see fn.
31, p.19 ).
21. CNMI P.L. 11-33 did allow for limited immunity
for illegal aliens who voluntarily came forward in
a 6-month period following the effective date of
the act. Aliens who were granted this limited
immunity could apply for a temporary work permit,
and the Moratorium Law (P.L. 11-6) did not
prohibit employers from hiring them. The report
now includes this information (see fn. 32, p. 19).
22. CNMI P.L. 11-76 established an absolute cap of
15,727 alien workers in the garment industry. In
table 2, we provided information on the number of
permit cards issued to alien workers by employment
sector (see p. 13). For 1999, the number indicated
for the garment industry is 16,533. However, as we
indicate in footnote 22 of the report, the numbers
in that column do not reflect an actual head count
of alien workers because some workers are issued
new permits within the same year for such things
as having a consensual transfer from one employer
to another, replacing a lost permit card, etc.
According to CNMI officials, the actual number of
workers who were issued permits in 1999 for the
garment industry was 15,641, which is below the
cap. We have included this information in the
report (see p. 13).
23. We have amended the report to add this
information (see fn. 16, p. 10). However, an
evaluation of the distinction between large and
small firms was beyond the scope of this review.
24. We make no statement regarding the
effectiveness of the safeguards that the CNMI
Customs Division has in place.
25. We disagree that the report dismisses the
possibility of transshipments. We report that
officials from the U.S. Customs' Office of
Investigations did not report problems of fraud,
diversions, or transshipments of goods involving
the CNMI. We state that since 1996, U.S. Customs
officials have conducted 16 separate
investigations in the CNMI, and none of these
investigations have uncovered evidence of
transshipments or diversions of U.S.protected
goods (see p. 24).
26. The regulations for the Alien Health Screening
Program were adopted on an emergency basis, but
they were implemented as permanent regulations and
are in effect today.
27. The report has been amended to recognize that
aliens may be receiving needed health care at
facilities other than those operated by the
Department of Public Health-such as Chinese
clinics (see fn. 42, p. 28).
28. The only data we had on alien health care was
the cost of that health care that was borne by the
CNMI government. We did not have data on the cost
of health care, if any, incurred by the alien
workers or their employers.
29. The report has been amended to note that
implementation of the Alien Health Screening
Program was delayed from 1996 to 1998, mainly due
to concerns by the prior CNMI administration
regarding the financial burden being placed on the
business community to pay for the program (see fn.
44 on p. 28).
30. We do not know whether the 78 nonresident
alien pregnant women actually gave birth in the
CNMI. Therefore, we do not know whether those
children would be eligible for Medicaid benefits,
or whether they actually received such benefits.
Further, the Department of Interior provided no
context for the figures (i.e., whether these
figures are representative of the average number
of such births during a similar time period).
31. We reported that the number of permits
increased from 1998 to 1999. However, the number
of permits decreased from 1997 to 1999, as shown
in table 2 (see p. 13).
32. If the CNMI implements the BMS system, data on
alien workers and tourists will be available.
33. Except for South Korea and Hong Kong, the
Department of the Interior is correct that the
CNMI relies on aliens to provide the results of
their criminal history background checks. With
respect to health screening, aliens bring with
them the results of a health screen from their
home countries. However, the CNMI conducts further
health screens on these workers within 10 days of
their arrival in the CNMI to ensure detection of
TB, HIV, and syphilis.
34. We did not evaluate the effectiveness of the
cooperation between DOLI and the countries of
origin. Each worker is dependent on his/her home
country for assistance in processing the required
DOLI paperwork and conducting the health and
criminal history checks in order to gain entry
into the CNMI.
Appendix III
Comments From the Immigration and Naturalization
Service
Page 62GAO/GGD-00-97 Immigration and Customs in th
e Northern Mariana Islands
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