Statement of Jerry Cook,
Vice-President
of International Trade, Sara Lee Branded Apparel
Testimony Before the House Committee on Ways and Means
Hearing on Creation of Homeland Security Department
June 26, 2002
Introduction
Mr. Chairman and honored members of the Ways and Means Committee, my name is Jerry Cook and I am the Vice-President of International Trade for Sara Lee Branded Apparel. Some of our better-known apparel brands include Hanes, Champion, Bali, Wonderbra, Playtex and Just My Size. I am an active member in various trade groups including AAEI, JIG, AAFA, BACM and a former member of the Advisory Committee on the Commercial Operations of U.S. Customs.
I am presently a member of the ISAC-15 as well as a member of the Trade Support Network. Sara Lee Branded Apparel is a charter member of the Customs-Trade Partnership Against Terrorism (C-TPAT) and a member of BASC (Business Against Smuggling Coalition.) Thank you for this opportunity to testify today on the proposal to create a US Department of Homeland Security and the transfer of all assets and authority of the US Customs Service to this new Homeland Security Department.
Mr. Chairman, my remarks are based on my experiences working with the US Customs Service and the various regulatory agencies that manage our exports and imports. It is my belief that the proposed transfer of the US Customs Service and consolidation of the border security agencies into a new Homeland Security Department can only be beneficial if enforcement and commercial operations remain together.
The US Customs Service is an integral partner in our supply chain strategy. In addition to the US Customs mission to manage anti-terrorism and drug enforcement along our nation’s borders, Customs successfully managed last year:
Customs achieved this milestone while seizing over 1.7 million pounds of narcotics. Their achievement was accomplished with 19,000+ employees and in partnership with the business community. In addition, Customs continued to forge ahead with the development of the ACE system and to began building a new critical partnership with the business community known as C-TPAT (Customs-Trade Partnership Against Trade.)
Additionally, the U.S. Customs Service maintained the primary data repository for over 40 other government agencies and enforced over 400 laws ranging from public health, safety, social, economic, environmental, and transportation in a time sensitive environment. The ability to execute these respective activities is not only critical for our public safety, but in fostering our economic security.
Critical to the Business Community-The Totality Of The US Customs Service Must Be Transferred Together
With the advancement of the MODACT, the essential ingredients of combining trade facilitation along with enforcement were critically linked to improve security, compliance and predictable business execution. The US Customs Service has served for many years in this dual role. During their 200+ years of operating, the US Customs Service has developed a series of rules, regulations, but most importantly a process in which commerce is executed in a transparent and predictable environment.
The successful trade programs that the Ways and Means Committee crafted into legislation have created economic opportunities. The economic development of trade has decreased security threats to the United States beyond our borders. The sustained economic development of regions like the Caribbean Basin, Mexico, Sub-Saharan Africa and the Mid-East have placed the on-going development of those regions dependent on an efficient Customs Service.
To delink Customs’ enforcement from the business facilitation would likely have unintended consequences to the business community and the respective agencies involved in managing trade and managing enforcement.
In short, the process of enforcing trade laws has advanced a hybrid solution that both informs the trade community of the respective programs and seeks joint ownership in critical areas. Given the “hands-on” management style required to manage the operational and enforcement aspects of trade, I believe it is critical that those respective missions stay together to provide the balance, insight and agility necessary to work through issues we jointly encounter.
Accelerate and Insure A Robust And Fully Integrated Electronic Exchange Solution-ACE (Automated Commercial Environment)
While the full development and implementation of the Homeland Security Department is contemplated, we need to insure the hard work and leadership of this Committee and others to develop the ACE system in timely achieved. As a member of the Trade Support Network, Customs repeatedly seeks insight and inclusion on the development of the new Automated Customs Environment. US Customs strives to insure that it not onlyincorporates the trade community’s needs, but to also insure that ACE is able to facilitate the key roles of enforcement, risk assessment, centralized data repository for the US Government and Account Management.
It is important to note that as the blueprints for the Homeland Security Department are drafted, resources are provided to insure that the vision of ACE is fully achieved and the benefits to trade are incorporated. US Customs has fostered a model to gain the voluntary support of the trade community for key enforcement iniatives by their genuine understanding and interest in assisting valid trade to enter efficiently, challenge unknown shipments to determine their validity and thwart illegal trade from gaining access to the USA.
The ability to rapidly move data within the agency begins with source data populated once into one repository. The ACE program envisioned a robust environment that can both facilitate risk assessment and reduce the cost burden of paper documents and re-loading data.
Within the trade role of Customs, the determining factors for shipment admissibility are more often commercial related than anti-narcotic or anti-terrorism. The ability to determine and advise correct classification, valuation, country of origin, trade preference program, trade mark and status of an entry or release are all aspects that affect the same agent/inspector examining a shipment.
If the two roles were separated based purely on enforcement versus commercial, the definition of what constitutes enforcement vs. commercial would likely lead to an endless level of appeals while trade is idled. The US Customs Service has incorporated not only the traditional law enforcement issues, but manages to understand the complex commercial issues. The separation of these two roles will likely leave trade in an unmanageable environment.
The advancement of the US Customs systems and the associated modernization efforts are critical to the new Homeland Security Department. By adopting ACE as the core platform for the Homeland Security, the respective process necessary to secure economic exchange will be incorporated the first day. I realize that the ultimate decisions will be decided jointly between Congress and the Administration, but I encourage you to assure the full trade community that the intended benefits of ACE are a high priority of the Homeland Security Department.
Homeland Security Needs Trade Advisory Input to the Senior Level
Perhaps the single biggest issue facing Homeland Security would be the unintended consequences of separation of the enforcement efforts from the commercial role.
In the development and implementation of the Homeland Security Department, input from the trade on trade specific issues and concerns is crucial. As a former member of the COAC (Advisory Committee on he Commercial Operations of Customs), I believe trade advise to senior management of Homeland Security will be vital in assessing what is working and what is not.
The US Customs Service receives valued input, problem identification and problem solving via trade support groups like TSN (Trade Support Network). The willingness of the US Customs Service and industry to jointly work together to identify issues, opportunities and co-develop workable solutions is one of the cornerstones that exemplifies the US Customs Service advancements versus other nations’ Customs Service. The ability to interface directly with the trade has advanced the joint partnership programs vital to enforcement like BASC and C-TPAT.
Customs has a successful record of engaging the trade community to achieve enforcement, trade programs, issue identification and development of effective problem solving solutions. The US Customs Service has facilitated our joint success in both enforcement and commercial advancement.
The US Customs Service provides valued input to other countries to advance their management of risks to the USA. The US Customs provides assistance for other nations to develop their trading solutions. The joint role of enforcement and commercial facilitation is crucial to develop better models prior to trade arriving at the US borders.
As We Advance Homeland Security-We Need to Focus Our Efforts
We are facing this challenge together. Our ability to achieve cross-border operational effectiveness will ultimately determine if we succeed or fail. As design and functionality are developed, we should consider making some beneficial changes that would enable both the trade and Customs Service to better achieve border and economic security.
Closing
Mr. Chairman and members of the Ways and Means Committee, I want to thank you for your continued leadership on trade and fostering a modern trading system. I appreciate the opportunity to comment on the transfer of all of the US Customs Service to the Homeland Security Department. In closing, the continued advancement of the US Customs Service role into Homeland Security can provide a valuable baseline. Commercial success is achieved in concert with enforcement.
Thank you.