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Newsletter

Customs Splits in Two Under
the Department of Homeland Security

February 26, 2003

On March 1, 2003, U.S. Customs will become a part of the new Department of Homeland Security (DHS).  Under the plan, the functions of Customs will be split into two parts, and the pieces placed into a Border and Transportation Security Directorate of the DHS.

  1. Department of Homeland Security

The Department of Homeland Security was mandated by the Homeland Security Act of 2002, and the Department became operational January 24, 2003.  According to the President, the purpose of the DHS is three-fold:

    • Prevent terrorist attacks within the United States;
    • Reduce America's vulnerability to terrorism; and
    • Minimize the damage from potential attacks and natural disasters.

Responsibility for the DHS falls on a single Cabinet official (currently, Tom Ridge, ex-Governor of Pennsylvania), whose primary mission is to protect the American homeland from terrorism.  The DHS would have an organizational structure with basically four divisions:

    • Border and Transportation Security (BTS)
    • Emergency Preparedness and Response
    • Chemical, Biological, Radiological, and Nuclear Countermeasures
    • Information Analysis and Infrastructure Protection

The Bush Administration has published a fact sheet describing the structure of the agency, and an organizational chart is available on the DHS web site.

  1. Customs in the DHS

    1. Moving Major Components into the DHS

March 1, 2003, the major components of the DHS will be moved into place, including the U.S. Customs Service.  Other components of the DHS will include the U.S. Secret Service, the Coast Guard, the Federal Law Enforcement Training Center, the Federal Emergency Management Agency, and many other bureaus and agencies.
    1. Customs Will Be Split Within
      The Border And Transportation Security Directorate

The Directorate of the BTS will be headed by the Commissioner of Customs, who will report to an Under Secretary for Border and Transportation Security.  Commissioner Bonner may continue in service until another Commissioner is appointed.  However, the next Commissioner will be appointed by the President with the advice and consent of the Senate.

Once in the BTS Directorate, Customs will be split between two bureaus, according to whether the activity is related to "protection" or "enforcement" functions:

    • A Bureau of Customs and Border Protection
    • A Bureau of Immigration and Customs Enforcement (which is renamed from the previous "Bureau of Border Security")
    1. The Bureau of Customs and Border Protection

The Bureau of Customs and Border Protection will focus exclusively on providing inspection, protection, and security services at ports-of-entry and along the borders. The BTS will also include other agencies, such as the Immigration and Naturalization Service (Department of Justice), the Border Patrol, and the Animal and Plant Health Inspection Services (Department oF Agriculture).

The bureau will consist mainly of Border Patrol officers and inspectors from INS, Customs, and Agricultural Quarantine Inspection (AQI). The idea is to unify inspection functions under a single chain of command. Rather than having individuals and cargo inspected by multiple agencies, this new structure is intended to provide a single, seamless inspection system ("one-stop shopping") for people and merchandise entering the United States.

    1. The Bureau of Immigration and Customs Enforcement

The Bureau of Immigration and Customs Enforcement will focus on enforcement of the immigration and customs laws as they relate to foreign nationals and the entry of goods. The Bureau will be vested with Customs' current "enforcement" functions and, as noted below, many of Customs' current "revenue" functions.

It will be composed of commercial operations, investigative and enforcement personnel from the Customs Service, INS, and the Federal Protective Service.

      1. Customs' "Revenue" Functions As A Part Of The "Enforcement" Function

Customs has always implemented important revenue functions, and this will continue under the DHS after the merger; however, the actual authority for these revenue functions will remain with the Treasury Department.  The "revenue" functions will include:

    • Assessing and collecting Customs duties, excise taxes, fees, and penalties due on imported merchandise, including classifying and valuing merchandise for purposes of such assessment (such duties will include AD, CVD, and duties imposed under safeguard provisions);
    • Processing and sometimes denying entry for persons, baggage, cargo, and mail;
    • Detecting and apprehending persons engaged in fraudulent practices designed to circumvent the Customs laws of the U.S.;
    • Enforcing Section 337 of the Tariff Act of 1930 and provisions relating to import quotas and the marking of imported merchandise, and providing Customs Recordations for copyrights, patents, and trademarks;
    • Collecting accurate import data for compilation of international trade statistics;
    • Enforcing reciprocal trade agreements;
    • Any related functions performed by the following Customs' offices:
Office of Information and Technology,
Office of Laboratory Services,
Office of Chief Counsel,
Office of Congressional Affairs,
Office of International Affairs, and
Office of Training and Development.
  1. Personnel Attributable To Customs Revenue Functions

These current Customs revenue functions are performed by the following personnel, and will soon be performed by the Bureau of Immigration and Customs Enforcement:

    • Import Specialists
    • Entry Specialists
    • Drawback Specialists
    • National Import Specialists
    • FP&F Specialists
    • International Trade Specialists
    • Financial Systems Specialists
    • Customs auditors
    • OR&R attorneys
      1. Safeguarding The Revenue Of The Treasury Department

Since the Treasury retains authority over revenue, limits will be placed on the DHS in terms of reducing Customs' revenue functions. 

The Secretary of the Treasury is authorized to appoint up to 20 new personnel to work with personnel of the DHS in performing all of Customs' revenue functions. 

The DHS may not consolidate, discontinue, or diminish the Customs' revenue functions performed by Customs. 

The DHS may neither reduce the staffing level nor reduce the resources attributable to these Customs revenue functions, and the DHS must ensure that an appropriate management structure is implemented to carry out such functions. 

No funds available to Customs or collected under (1) through (8) of 19 U.S.C. §58c(a) (i.e., various Customs user fees, except for the merchandise processing fee (MPF)) may be transferred for use by any other agency or office in the DHS.

In addition, the Secretary of Homeland Security must notify the House Ways and Means and Senate Finance Committees at least 90 days before taking any action that would result in:

    • Any significant reduction in Customs revenue services;
    • Any reduction of hours of operation;
    • The elimination or relocation of any office of DHS which provides Customs revenue services; or
    • The elimination of any port of entry.

Please contact George Tuttle, III, at geo@tuttlelaw.com if you have any questions regarding this or other Customs law matters.

 

George R. Tuttle, III, is an attorney with the Law Offices of George R. Tuttle in San Francisco.  The information in this article is general in nature and is not intended to constitute legal advice or to create an attorney-client relationship with respect to any event or occurrence, and may not be considered such.

 

Copyright © 2003 by Tuttle Law Offices. 

All rights reserved.  Information has been obtained from sources believed to be reliable.  However, because of the possibility of human or mechanical error by our offices or by others, we do not guarantee the accuracy, adequacy, or completeness of any information and are not responsible for any errors, omissions, or for the results obtained from the use of such information.

 

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