CUSTOMS AUTOMATION SEEN AS A FOCUS IN AAEI PARLEY

Byline: Jennifer Owens

WASHINGTON — U.S. Customs’ first attempt to bring Nineties automation to a specific import industry — in this case cars and car parts — is expected to be the hot topic at the annual international trade conference sponsored by the American Association of Exporters & Importers.
That’s because while trade associations have united in opposition to a White House proposal to increase a Customs user fee to modernize the agency’s computer system, importers still want to see some improvement.
The AAIE’s 77th annual International Trade Convention and Exhibition, called “The New Trade Environment 2000 and Beyond,” runs for two days, starting today, at the Marriott Marquis hotel in New York. About 500 attendees are expected.
According to Eugene Milosh, AAEI president, U.S. Customs officials will announce at the parley a plan to roll out this year a prototype automation program to speed up processing for automobile importers. “It’s a huge volume [of imports],” Milosh said. “So if they can tackle that, that will be a big step.”
It’s a step that importers of all stripes have been awaiting for at least four years now, or since Congress passed the Customs Modernization Act. For while that act requires major new automation programs, Customs still has not developed the decentralized computer system needed to replace its aging Automated Commercial System.
Some experts worry that with the rising volume of imports, ACS may crash this summer while a replacement is still six years away. Meanwhile, to pay for the automation, the Clinton administration has proposed increasing the merchandise processing fee to 0.25 percent of the value of formal cargo entries into the U.S. from 0.21 percent. It’s an increase that’s expected to cost a midsized importer at least $200,000 more a year.
The prototype program for auto importers “means some of the automation programs are getting a jump start,” Milosh said, while there is concern among textile and apparel importers that automation for their sector may be long delayed unless momentum starts to build. Said Milosh: “There have been complaints from our members that textile and apparel importers have not gotten the quid pro quo of other industries.”
Much of the reason, he said, is because international trade in textile and apparel issues has long had political ramifications.
Said Milosh, “Now the question is whether there’s enough gas in the [Customs automation] tank” to push forward the textile and apparel matter once the auto system is in place, rather than some other category.
In other issues, Milosh said attendees will likely be concerned this year with the continuing confusion over rules of origin as well as the increasing political push for Customs to increase its fight against drug smuggling. Milosh cited, for example, a recent vote in which Congress approved the use of military personnel along the Mexican border.
While importers are happy to see that Customs remains a high priority with Congress, the vote still “changes the balance” between trade facilitation and drug interdiction, Milosh said. And, he said, additional searches may mean “you could have delays, and business takes a hit.” He said, “But if it’s done thoughtfully and managed properly — I mean both technically and politically — then it won’t be much of a problem.”
Finally, said Milosh, increased penalties for noncompliance with Customs law, particularly as automation takes further hold, will also be a concern for conference attendees who will range from importers to Customs law attorneys to brokers and forwarders.
“They better be concerned, because the penalties are very severe now,” he said. “That’s one of the problems. You’re more or less honor-bound in an automated environment [to comply], but if you’re caught, then you pay the price.”
For the formal conference program, each panel will feature speakers from both Customs and industry. For example, Richard Crichton, Customs’ international trade manager for textiles, and Michael Laden, director of import administration and Customs compliance for Target Stores, will participate in a discussion of textiles, apparel and footwear issues.
Other speakers will include Matt Rohde, director of Customs issues for the World Trade Organization’s office of multilateral affairs, who will serve on a U.S. trade policy panel, and Bradley Shorser, manager for governmental issues and Customs compliance for Sears, Roebuck, who will participate in a discussion on Customs compliance issues.
AAEI membership is varied, representing importers and exporters of products ranging from textiles and apparel to chemicals and food to automotive parts and glassware.

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