The Office of Inspector General (OIG) says U.S. Customs and Border Protection (CBP) needs to improve its oversight for its centers of excellence.
CBP’s 10 Centers of Excellence and Expertise (Centers) were officially established as a permanent organizational component in January 2017. They work to promote uniformity at each port of entry by centralizing trade enforcement and facilitation using an account-based approach. The Centers also execute policies issued by CBP’s Office of Trade.
The concept of the Centers arose in response to claims that similar goods entering the country received different treatment depending on the port of entry that processed the goods. This disparity led to trade disruptions, increased costs, and information lapses for both CBP and importers.
However, CBP does not have performance standards for the Centers, which made it difficult for OIG to determine how they had improved the assessment, collection, and protection of revenue. OIG was however able to identify areas in which CBP could improve its compliance with the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA), its oversight of the Centers, and the reliability of its trade import and enforcement data.
OIG found that CBP has not established performance standards for the Centers in accordance with the TFTEA. In addition, although CBP did report on Center operations in 2017 as required by the TFTEA, it has not evaluated the Centers’ ability to facilitate the assessment, collection, and protection of trade revenue since that time.
In addition, the watchdog determined that CBP does not have uniform, clear, and consistent procedures for the Centers and for other CBP offices that coordinate with the Centers. For example, CBP has not clearly outlined the Centers’ specific roles and responsibilities for initiating, processing, and tracking trade penalty cases. OIG also found that CBP did not consistently follow the enforcement processes it does have by holding monthly meetings to ensure timely enforcement actions are taken to protect revenues.
Additionally, OIG reported that the Seized Assets and Case Tracking System (SEACATS) showed 152 penalty cases were still open even though the statute of limitations for collecting assessed penalties appears to have expired. The watchdog added that data in SEACATS did not indicate if CBP had received waivers that extended the statute of limitations for any of these cases. As a result, OIG was unable to accurately estimate the actual dollar amount of revenues and cases lost to statute of limitations expirations. In its report, OIG notes that SEACATS data indicated $858 million in uncollected penalties. When the Inspector General brought this to CBP’s attention, officials stated they have a process for extending the statute of limitations for many penalty cases by requesting waivers from importers.
OIG has made five recommendations to the Executive Assistant Commissioners of CBP’s Offices of Trade and Field Operations:
- Establish performance standards for the Centers of Excellence and Expertise.
- Establish and implement procedures to periodically assess the performance of the Centers’ operations to assess, collect, and protect revenues. Specifically, CBP should ensure that the Centers are operating as intended; ensure that established goals are met; and assess the risk to the Centers’ ability to assess, collect, and protect revenue.
- Update all procedures to clearly define the Centers’ roles and responsibilities in revenue collection, ensure uniformity among Centers, and ensure personnel are trained on the updated procedures.
- Establish and implement enforcement procedures that include Center officials in the decision-making process and assist with corrective actions to promptly resolve importer violations.
- Update appropriate standard operating procedures for initiation, analysis, monitoring, and management of trade penalty cases that clearly delineate the Centers’ role and define ways to measure improvements.
CBP expressed some concerns with OIG’s audit, such as information sharing procedures, but concurred with each of the recommendations and stated that actions to meet them will be completed by October 31, 2022.