Customs looking for import of funds

The U.S. Customs Service needs new computers at its borders and at least

$1 billion to pay for them. But finding the money is no easy task, according

to congressional testimony April 4. The Treasury Department arrived hat-in-hand

at the House appropriations subcommittee that oversees Treasury's budget,

seeking money to bandage an aging import-processing system and funds to

start up a new one.

Despite ample evidence that Customs computers are breaking down regularly — as often as 100 times a month — no one is quite sure where to find the

money to replace the aging Automated Commercial System (ACS), a DOS-based

system that processes imports on a piecemeal basis.

"The urgency of the requirement to modernize Customs' import information

processing system is no longer debatable," said Rep. Jim Kolbe (R-Ariz.),

the subcommittee chairman. "How will we pay for this $1.2 billion project?"

The Clinton administration has one idea — raising money from importers.

But lawmakers don't like the idea of charging a user fee on goods imported

across U.S. borders before the new system, the Automated Commercial Environment

(ACE), is up and running.

"You would be imposing a fee for a service not yet provided during a

period where no one benefits from it," said Rep. John Sununu (R-N.H.).

James Flyzik, Treasury's chief information officer, told the subcommittee

that the agency had found about $7 million to pay its consultants for this

year, but that it needs an additional $5 million. Another $123 million is

needed just to patch ACS and keep it operating. And $210 million is needed

for the first year of ACE.

"We need to get Customs into the mainstream of the market and the mainstream

of technology," Flyzik said.

"The center of a global economy cannot run on obsolete computer systems

and a "patch-it-when-it-breaks' game plan," said Harris Miller, president

of the Information Technology Association of America, who also testified.

Officials pointed to the headaches over the troubled Internal Revenue Service

modernization program, which will require $5 billion and 15 years to complete.

Customs' needs are more urgent, officials said.

Importers have long complained that the Customs automation system is

obsolete, facing regular brownouts and blackouts and failing to deliver

a "paperless border crossing." Customs oversees the movement of more than

$2 trillion in trade across U.S. borders and collects $22 billion annually

in duties and fees. But its aging computer system makes it impossible to

keep pace with the private sector.

"The problem is [that] the current system is program-med to do business

the way they did it 12 years ago. It is still locked in old technologies,"

said S.W. Hall Jr., Customs' CIO.

Kolbe said it is urgent to find a way to pay for modernization because

Customs "remains tethered to processes that are legendary of its traditional

way of doing business — transaction by transaction and, in most cases, on


Regardless of how soon money is available for modernization, the government

will still have to keep ACS running for about four years until the new system

has been phased in.

"It will take several years to build it. We'll be spending a lot of

money on it, but it won't be up and operating," said John Simpson, the deputy

assistant secretary of Treasury for regulatory, tariff and trade enforcement.

Earlier this year, a coalition of business and retail groups — including

auto-makers, Kmart Corp. and even McDonald's — banded together to pressure

Congress to fund $1.2 billion to modernize ACS. In an unusual alliance,

the group of more than 400 trade organizations and companies said aging

computers at every U.S. port are slowing the importation of goods, and costing

time and money.


* Installed at 301 ports of entry in the mid-1980s.

* Consists of DOS-based, custom- written mainframe applications.

Automated Commercial Environment

* Would include Microsoft Corp.Windows NT- and Unix-based software and relational databases.

* Would integrate Customs information on businesses' internationaltrade activities, making it easier to target inspections and track traders'payments of duties.

* Would enable agency employees to use World Wide Web browsers to viewthe data and run applications.


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