Customs Automation Funding

Since the 1980s, the U.S. Customs Service has made a commitment to move from paper information flows to electronic information flows. Today, more than 90 percent of all import entries are processed electronically. The Customs Automated Commercial System (ACS) now handles more than $1 trillion in imported goods in millions of entries each year.

The ACS is now decades old, and operating at more than 90 percent of its capacity — well above its design specifications. More important, it is based on old technology and uses very old computer programming language that makes it difficult and expensive to upgrade. It can no longer adequately serve the interests of either the U.S. economy or the U.S. government. It has experienced slowdowns and brownouts over the last few years, jeopardizing the flow of U.S. exports and the critical supply chain for imported products and parts.

To address this issue, Congress in FY 2001 appropriated $130 million to begin the process of building a new computer system - the Automated Commercial Environment or (ACE). Customs has estimated that it will take as much as $1.5 billion to build this new system. An appropriation of $300 million was given in FY 2002 to keep this project on track.

The Coalition for Customs Automation Funding (CCAF) - a consortium of 250 companies and organizations - advocates U.S. Customs modernization. The California Chamber of Commerce is a member of the CCAF. The efforts focus on urging the U.S. Congress to appropriate funding for a new Customs systems. CCAF was founded in 1999 to obtain emergency funding to operate the Customs Service Automated Commercial System (ACS) and existing automation prototypes. The CCAF seeks funding to develop and build a modern system, the Automated Commercial Environment (ACE), to replace ACS. CCAF supports the overall U.S. Customs modernization project and continues to encourage the U.S. government to fund the development of ACE.

In previous years, President Clinton had requested a new user fee to pay for this computer system. Congress had consistently rejected a new user fee because importers already pay a hefty merchandise processing fee that raises nearly $1 billion in revenue every year. In addition, of course, tariffs collected through the computer system add $20 billion to general revenues every year.

For these reasons and the ones listed below, support was urged to continue FY 2002 funding for the new computer system. In addition, opposition to new user fees to pay for what is essentially a tax collection system also is urged.