CBP’s Priority Trade Issues

CBP’s Priority Trade Issues are high-risk issue areas in which violations  can cause significant revenue loss, harm the U.S. economy, or threaten  the health and safety of the American people, according to CBP. The Office of Trade develops policies to guide trade enforcement efforts,  while the Office of Field Operations conducts a range of trade processing  and enforcement activities at ports. CBP’s previously port-centric  approach to trade enforcement has shifted to a national-level,  industry- focused approach with the establishment of the Office of Field  Operations’ 10 Centers of Excellence and Expertise. Centers of Excellence and Expertise Change the Way CBP Conducts Trade Operations by Enhancing Industry Focus at a National Level

CBP’s 10 Centers of Excellence and Expertise have changed the way in  which CBP conducts trade operations, centralizing the processing of  imported goods on a national scale through a single industry-related  Center rather than through individual ports of entry. CBP Enforces Its Priority Trade Issues through a Layered, Risk-Based Approach but Generally Does Not Have Performance Targets for Its Activities

CBP uses a layered, risk-based approach to guide its trade enforcement  activities across its Priority Trade Issues but generally does not set  performance targets to assess the effectiveness of its activities. 8 for an example of  goods seized as a result of targeting). For example, CBP can seize imported goods if it believes there is a  violation of a trade law. CBP Has Not Met Its Staffing Targets for Some of Its Trade Positions, Which Can Impact CBP’s Trade Enforcement Efforts

Over the past 5 fiscal years, CBP generally has not met the minimum  staffing levels set by Congress for four of nine positions that perform  customs revenue functions, and it generally has not met the optimal  staffing level targets set by the agency for these positions. Staffing  shortfalls can lead to decreased effectiveness of trade enforcement. Staffing shortfalls in trade positions can impact CBP’s trade processing  and enforcement efforts, including CBP’s ability to enforce trade  effectively. Conclusions

As an agency tasked with collecting revenue and identifying  harmful and  noncompliant imports, such as counterfeit products and goods that are  misclassified to evade duties, CBP needs to ensure that it effectively  enforces U.S. customs and trade laws while at the same time facilitating  legitimate trade. In 2015, CBP officials processed more than $2.4 trillion  in imports through more than 300 ports of entry and collected around $46  billion in revenue, making CBP the second-largest revenue collection  agency in the United States. However, these plans generally lack  performance targets, contrary to leading management practices. CBP officials cited several challenges to  filling staffing gaps, including that hiring for trade positions is not an  agency-wide priority. Contrary to leading practices in human capital  management, CBP has not articulated how it plans to reach its staffing  targets for trade positions over the long term. Appendix II: Objectives, Scope, and Methodology

This report examines (1) U.S. Customs and Border Protection’s (CBP)  structure for carrying out trade enforcement, (2) how CBP conducts trade  enforcement across its high-risk issue areas and ensures that its  enforcement activities are effective, and (3) the extent to which CBP  meets its staffing needs for trade enforcement. We visited CBP ports and  field offices in Baltimore, Maryland;  Los Angeles/Long Beach, California;  and New York, New York to observe trade enforcement activities and  interviewed CBP officials located at the sea and air ports. We  subsequently worked with CBP in May 2017 to prepare this public version  of the original sensitive but unclassified report for public release.
Why GAO Did This Study

In fiscal year 2015, CBP processed more than $2.4 trillion in imports through more than 300 ports of entry, collecting around $46 billion in revenue. CBP facilitates legitimate trade coming into the United States and enforces U.S. trade laws. CBP is tasked with collecting revenue and identifying harmful and noncompliant imports, such as counterfeit goods and goods that evade duties.
In February 2016, Congress passed an Act that included a provision for GAO to review the effectiveness of CBP's trade enforcement activities. In this report, GAO examines (1) CBP's structure for carrying out trade enforcement , (2) how CBP conducts trade enforcement across its high-risk issue areas and ensures that its enforcement activities are effective, and (3) the extent to which CBP meets its staffing needs for trade enforcement. GAO reviewed agency documents, interviewed agency officials, and conducted field work at ports in Baltimore, Maryland; Los Angeles/Long Beach, California; and New York, New York. GAO selected ports to visit based on factors including volume of imports and number of trade enforcement units at each port.

What GAO Found

Two offices within U.S. Customs and Border Protection (CBP) enforce U.S. trade laws and protect revenue. The Office of Trade develops policies to guide CBP's trade enforcement efforts, while the Office of Field Operations conducts a range of trade processing and enforcement activities at U.S. ports. CBP's previously port-centric approach to trade enforcement has shifted to a national-level, industry-focused approach with the establishment of the Office of Field Operations' 10 Centers of Excellence and Expertise. These Centers represent a shift in trade operations, centralizing the processing of certain imported goods on a national scale through a single Center rather than individual ports of entry.
CBP conducts trade enforcement across seven high-risk issue areas using a risk-based approach, but its plans generally lack performance targets that would enable it to assess the effectiveness of its enforcement activities. Violations in the high-risk issue areas can cause significant revenue loss, harm the U.S. economy, or threaten the health and safety of the American people. CBP's trade enforcement activities reduce risk of noncompliance and focus efforts on high-risk imports, according to CBP. For example, CBP conducts targeting of goods, conducts audits and verifications of importers, seizes prohibited goods, collects duties, and assesses penalties. However, CBP cannot assess the effectiveness of its activities without developing performance targets as suggested by leading practices for managing for results.
Over the past 5 fiscal years, CBP generally has not met the minimum staffing levels set by Congress for four of nine positions that perform customs revenue functions, and it generally has not met the optimal staffing level targets identified by the agency for these positions. Staffing shortfalls can impact CBP's ability to enforce trade effectively, for example, by leading to reduced compliance audits and decreased cargo inspections, according to CBP officials. CBP cited several challenges to filling staffing gaps, including that hiring for trade positions is not an agency-wide priority. Contrary to leading practices in human capital management, CBP has not articulated how it plans to reach its staffing targets for trade positions over the long term, generally conducting its hiring on an ad hoc basis.
This is a public version of a sensitive but unclassified report that GAO issued in April 2017. Information that CBP deemed sensitive has been redacted.

What GAO Recommends

To strengthen its trade enforcement efforts, CBP should (1) include performance targets in its plans covering high-risk issue areas, and (2) develop a long-term hiring plan specific to trade positions that articulates how it will reach its staffing targets. CBP concurred with both recommendations.