Customs officials believe that the more export information they have, the more focused their efforts to target illegal shipments will be. The trade community has varying views on AES. Finally, AES will not likely serve as a central point for collecting and processing all export documents because other export-related agencies have information needs that they say cannot be fulfilled through AES. Of the companies that plan to use AES, only 4 percent of the freight forwarders and 5 percent of the exporters have filed a notice with Customs that they plan to participate in AES or are testing AES. According to industry groups and several companies’ officials we interviewed, filing information predeparture is inconsistent with their business practices. Third, AES allows SED information to be transmitted only hours before a shipment’s departure (as with the current paper system), and inspectors told us that in most cases this is not sufficient time for targeting possible illegal shipments. Finally, since participation in AES is voluntary, an illegal exporter is unlikely to use the system for filing export data. Most Other Agencies’ Export Requirements Cannot Be Fully Satisfied by AES

According to both Census and Customs, AES has the potential to provide exporters with “one-stop shopping” by creating a single electronic filing center for all U.S. export data. For example, 8 of the 13 agencies identified by Customs as having regulatory authority over exports are not using AES to fulfill their export licensing or permit requirements because of existing regulations that require them to retain their own licensing procedures, including collecting information provided by the exporter. In making this assessment, attention needs to be given to determining whether predeparture filing of export data is critical to improved export statistics and enforcement of U.S. laws and regulations and, if so, how far in advance inspectors need the information for AES to be an effective enforcement tool; a link between AES and the databases of law enforcement agencies can be allowing some exporters to file SEDs after departure would undermine the objective of achieving improved export data and/or render AES ineffective as an enforcement tool; and the requirements of other agencies can be modified or otherwise accommodated to permit their use of AES. These errors are "fatal." Senator Orrin Hatch, Chairman of the Senate Judiciary Committee, has asked us to obtain the views of the export community regarding the Customs Service's new Automated Export System, AES, and to collect information on company export practices which may be affected by AES. 3. 11. (Asked of those planning to use AES or whose companies had not yet decided whether to use AES.) Are you concerned or not about the predeparture SED filing requirement of AES? Objectives, Scope, and Methodology

To determine whether AES is likely to achieve its objectives of improving export data, enhancing enforcement efforts, and streamlining export data collection, we interviewed Customs and Census headquarters officials and representatives of 12 government agencies with export-related responsibilities. 3. GAO Comments

1. 2.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the potential impact of the Customs Service's Automated Export System (AES) and the views of the export community regarding AES, focusing on whether AES is likely to achieve its objectives of improving export data, enhancing enforcement efforts, and streamlining export data collection.

What GAO Found

GAO noted that: (1) it is not yet clear what benefits will result from the use of AES because many critical implementation issues remain unsolved; (2) although AES has the potential to improve export reporting and enhance enforcement efforts, it is unlikely to achieve these objectives unless more exporters are willing to participate and limitations that prevent other agencies from fully using the system are resolved; (3) concerning the trade community's limited participation, GAO found that: (a) only a small fraction of the export community is using AES; (b) most exporting companies responding to GAO's survey are not likely to use AES over the next 3 years; and (c) twenty-five percent of all U.S. ocean freight forwarders had not heard of AES; (4) benefits cited by companies using AES include automated filing, reduced paperwork, personnel, and administrative costs, participating in the initial development of AES, and filing all data at a central filing point; (5) some segments of the trade community contend that the predeparture filing requirement is inconsistent with their business practices and costly; (6) AES is designed to help target illegal shipments, identify high-risk shipments, and compile exporter histories; (7) the system's usefulness as an enforcement tool is limited because: (a) it is not linked with the databases of other law enforcement agencies; (b) a proposal to allow exporters to file data after shipment could undermine efforts to detect export violations; (c) AES allows export data to be transmitted only hours before a shipment departure, which may not provide sufficient time to target possible illegal shipments; and (d) many Customs inspectors anticipate that illegal exporters are unlikely to use AES to file their export data; (8) AES faces limitations in achieving its goal to create a single information collection and processing center for the electronic filing of required export documentation; (9) many export-related agencies are subject to existing regulations requiring them to retain their own licensing procedures and have requirements that will not be satisfied through AES; (10) Customs is attempting to resolve these issues through several means; and (11) a cost-benefit analysis is needed to determine how or whether to proceed with implementation of AES.