enforce the Commerce Department and Export Administration
Board export licensing requirements during World War I.
Increased emphasis was placed on export enforcement in 1981
as a result of assessments by the Reagan Administration.
Customs has been the lead agency in informing the public,
establishing liaisons, developing information and
investigating violations of all export laws and regulations.
Except for shared domestic enforcement of the Export
Administration Act with Commerce, Customs enforces all
other export laws for the U.S. Government. These laws
enforced by Customs involve the United States Munitions
List, Missile Technology, nuclear weapons and research,
Foreign Assets Control, CHEMCON II (drug manufacturing
precursors), stolen vehicles under the Motor Vehicles Theft
Law Enforcement Act of 1984, currency, chemical and
biological weapons to name a few.
As a criminal investigation proceeds, it is not uncommon to
discover that more than one export law has been violated.
In some situations an investigation is initiated for what
are believed to be violations of the Export Administration
Act when it is later determined that there are violations of
the Arms Export Control Act or other export laws. Customs,
because of its broad investigative authority, can continue
the investigation without disruption which would be caused
by referring the matter to another agency.
Customs has unquestionable, court tested, warrantless export
border search authority. This authority provides for
efficient and effective enforcement and prosecution.
Commerce, by law, must have a Customs Officer present in
order to take enforcement action at ports and borders.
redundant use of personnel is not cost effective or
efficient.
Customs has established foreign offices in 20 locations, and
has long, well established relationships with not only
foreign Customs officers, but also with most foreign
enforcement and intelligence agencies. These 20 offices
have investigative oversight for all countries around the
world. Customs officers are the primary enforcement
authorities for import/export violations in most foreign
countries, especially COCOM countries. This natural
counterpart relationship allows for the most expeditious
handling of matters through already existing channels.
Customs has established formal Bilateral Customs-to-Customs
Mutual Assistance Agreements under which investigations can
be requested and a mutual exchange of information takes
place.
Customs is authorized by law to conduct overseas investigations for all violations of U.S. export laws to include those investigated by Commerce for violations of the Export Administration Act. Customs currently honors all Commerce requests for foreign investigations and has offered to fulfill all of Commerce's investigative needs for both criminal and administrative actions.
The U.S. Customs Service is successful in export enforcement
because it has designated export enforcement as a major
priority and has invested a considerable amount of manpower,
training, and money into this effort. U.S. Customs has a
well-trained, experienced cadre of 300 special agents and
135 inspectors who are dedicated solely to export
enforcement. Customs has an additional 2500 special agents,
5000 inspectors and auditors to call upon for assistance as needed. U.S. Customs is also located at more than 300 domestic locations in the United States and its territories.
Because of its flexibility and broad enforcement authority,
the U.S. Customs Service is able to shift export enforcement
resources based upon U.S. policy and therefore utilize
Customs resources in the most cost efficient manner to the
U.S. Government. Custom enforcement authority is not
subject to renewal of the Export Administration Act but has
full authority granted under 19 USC 1589a.
The U.S. Customs Service possesses the traditional law
enforcement resources and personnel to effect multiple
enforcement operations (simultaneous search warrants,
electronic interceptions, 24 hours multi-location
surveillances, etc.).
The U.S. Customs Service, over the years, has obtained
extensive experience in the establishment of businesses for
use in undercover operations to detect and successfully
investigate violations of U.S. export laws, to include the
Export Administration Act. Additionally, Customs has in
place the Justice Department mandated infrastructure and
training to support these successful operations.
Although the Department of Justice has an established policy
that criminal investigations have priority over civil
investigations, Customs does not believe that Commerce's
ability to deny export privileges and issue civil penalties
would be hampered by Customs assumption of sole enforcement
authority of the Export Administration Act. Customs Special
Agents have historically conducted import civil fraud
investigations and have developed an expertise in the area
of fraudulent shipping documents, for both imports and
exports, unsurpassed by any other federal law enforcement
agency. In FY-90, Customs collected more than $29.8 million
dollars in penalties as a result of civil import fraud
investigations. Investigations by two different agencies
for the same violation, one criminal and one civil, is not
cost effective for the U.S. Government.
As is currently done with Customs import fraud
investigations, Customs can investigate and obtain all
information necessary for both the criminal and civil
violations of the Export Administration Act under
established U.S. guidelines for the collection of evidence,
and refer the results to Commerce's administrative law
judges and counsel for administrative action and fines.
This procedure is presently in place with the Department of
State for Arms Export Control Act violations, and the
Department of Treasury for other export violations.
Customs has well established relationships with domestic transportation companies, freight forwarders, brokers, and the entire import/export community at large in the United States. That community looks to Customs as the enforcement experts.
A merger of Commerce enforcement personnel with Customs would only strengthen export enforcement and greatly improve career opportunities and geographic mobility for the Commerce employees.
O Economies of scale may be realized through consolidation of Commerce's export enforcement office with Customs. The U.S. Government could save all current attendant costs of supporting Commerce investigative offices in the U.S. and abroad, all of which are located in the same cities as U.S. Customs.
How good is the relationship between the intelligence community and Customs? Do you receive adequate and timely intelligence on the attempts by other countries to acquire U.S. technology to enable you to defend against any attempted exports?
By and large the relationship is one that has proven
beneficial to the Customs Service and the country.
Interaction between Customs and the Community occurs
routinely through electronic and telephonic contacts on
issues in areas of mutual concern. Through these contacts,
this agency has established a good working rapport with
individual Community members, establishing what each can and
cannot provide with respect to their areas of concern and
expertise. As such, Customs has been able to elicit
significant export enforcement data from both highly
specific and general Community reporting, as well as via
telephone calls, which assist in both tactical operations
and strategic trend analysis.
Customs personnel are members of various interagency panels with Intelligence Community representatives with the aim of exchanging information at the working level. These interagency panels discuss matters in a wide range of strategic trade areas including missile technology, nuclear technology, weapons and munitions, and other high technology components and finished products.
Participating in these panels affords Customs the opportunity to meet face to face with members of the Community and engage in a personal dialogue with members of agencies whose primary mission and focus is not law enforcement. These meetings thereby provide a forum for both the Community and Customs to better understand the policy perspectives, operational methods, and informational needs each has in striving to fulfill its role in achieving the common U.S. Government goals. Such understanding increases the efficiency of Customs export enforcement and interdiction efforts and provides an atmosphere for maximum cooperation between the Service and the Community.
While Customs does obtain valuable information for export enforcement purposes from Community members, this agency reciprocates that assistance. Providing specific feedback to Community members assists them in assessing the value of the information they collect, and in determining what types of reporting is beneficial to this agency. Giving this feedback has the benefit of letting the Community know in concrete terms the contribution it has made in protecting U.S. interests and safeguarding the national security. However, a second equally important form of "feedback" or benefit, albeit less recognized, is also derived by the Community from the relationship. Customs investigative actions sometimes uncover information/data which is of particular value to Community members for further research or future collection purposes. Customs attempts to provide this type of information to desirous members where appropriate, occasionally through the dissemination of Reports of Investigation (ROIS).
The relationship has proven beneficial to both parties in
the past and seems fairly solid. It should be noted that
some feel that certain Community members do not share enough
of their law enforcement related intelligence. However,
when considering the vast amount of raw and finished
intelligence which is collected, analyzed, and reported
daily, it is extremely difficult to assess whether or not this is indeed the case.
In general, data provided by the Community has proven to be both adequate and timely in the pursuit of export fraud.
As a matter of daily routine, information in the form of
cable traffic is received from the Community and screened to
see if it is usable for Operation EXODUS. If it is deemed
to be pertinent, the information is subsequently analyzed
and tailored to fit Customs law enforcement needs. Most
often the information is provided with enough lead time to
enable Customs personnel to put the information out to the
appropriate enforcement field office for its action.
The information provided is usually complete enough that
Customs personnel do not have to go back to the Community
for further elaboration or explanation. When those
occasions arise where additional information is needed, the
Community acts to cooperate to the extent that it can to
satisfy Customs request. If the request is not very
"routine" in nature or if there exists a policy conflict
over the inquiry, however, the Community response may
sometimes be delayed beyond what most would consider a
reasonable waiting period.
It should be added that even when Customs does not receive
"timely" information from the Community, this agency still
may be able to put the intelligence to good use. In large
part, this is because Customs has the ability to bring
criminal charges against violators even if the illegal
shipment has reached its intended destination without being
interdicted.
Obviously, Customs walks a fine line when using Community
information. A balance must be struck between the Community
need for anonymity and Customs need to distribute
information that can be used to protect the national
security. That this has been successfully maintained for
such a long period of time attests to the cooperation and
understanding between Customs and the Community.
THE FOLLOWING ANSWERS ARE IN RESPONSE TO QUESTIONS FROM
CONGRESSMAN SUNDQUIST ON MAY 1, 1991
Would you favor the creation of a Justice Department task
force specializing in export crimes as described by
Ms. MOORE in her testimony?
The Customs Service coordinates the prosecution of all
export investigations with the Internal Security Section,
Criminal Division, U.S. Department of Justice (DOJ).
the Internal Security Section, DOJ in the early 1980's,
established an Export Control Enforcement Unit. This unit
is responsible for establishing DOJ's policy with regard to
export enforcement and monitoring export enforcement
prosecutions by U.S. Attorneys. The attorneys assigned to
the Export Control Enforcement Unit are DOJ's resident
experts on export enforcement.
The Export Control Enforcement Unit provides many valuable
services to investigating agencies and U.S. Attorney's
offices. Among these services are assistance in drafting
legal documents, such as indictments and affidavits, legal
research, and serving as the DOJ interface for contact with
the legal staffs of other U.S. agencies and the intelligence
community. Attorneys assigned to the Export Control
Enforcement Unit have traveled to a number of U.S.
Attorney's offices throughout the U.S. to offer advice and
assistance on specific prosecutions. On a number of occasions, Export Control Enforcement Unit Attorneys have even served as members of the prosecution team at lengthy
Over the years, the Strategic Investigations Division of the
Customs Service has developed a close working relationship
with the Export Control Enforcement Unit. We believe that
this relationship has fostered both better investigations
and prosecutions. The Customs Service views the Export
Control Enforcement Unit as DOJ's ad hoc "national task
force to coordinate the prosecution of export violations."
Should exporters and freight forwarders be required to sign
an end-use statement on all shipment export declarations?
On the Shipper's Export Declaration (SED) form, it is
required that the country of ultimate destination be
identified. The SED must be signed by the exporter or his
agent. The country of ultimate destination serves as an end
use statement on the SED.
Wouldn't it help if we had a warning statement, like falsifying this document carries a penalty of $50,000 fine or five years imprisonment?
The Shipper's Export Declaration form (7525-V) does contain
a warning statement that criminal and civil penalties may be
imposed for making false or fraudulent statements (SED
sample, Enclosure #9).
On all license applications, Commerce does ask "the seller and purchaser what their intentions are?" Upon filing an Application for Export License (Enclosure #10), the application certifies that "to the best of my knowledge, information and belief all statements in this application including the description of the commodities or technical data and their end-uses, and any documents submitted in support of this application are correct and complete and that they fully and accurately disclose all terms of the order and other facts of the export transaction." The Application for Export License also contains the following warning "Making any false statement or concealing any material fact in connection with this application or altering in any way the validated license is punishable by imprisonment or fine, or both, and by denial of export privileges under the Export Administration Act of 1979, and any other applicable Federal statues."
Similarly State export license applications (DSP-5,
Enclosure #11) require the applicant to "Warrant the truth
of all statements made herein, and acknowledge, understand,
and will comply with the provisions of Title 22 CFR 120-130
and any conditions and limitations imposed." Title 22 CFR
123.9 states in part... "The country designated as the
country of ultimate destination on an application for an
export license, or on a shipper's export declaration where
an exemption is claimed under this subchapter, must be the
country of ultimate end-user... Exporters must ascertain the
specific end-user and end-use prior to submitting an
application to the Office of Munitions Control or claiming
an exemption under this subchapter. End-use must be
confirmed and should not be assumed...
4. Do either the EAA or money laundering statutes cover
money that is transferred within the United States?
On April 18, 1991, Ms. Portia Moore testified that "one
thing the money-laundering statute did not allow us to get
was money that had been transferred wholly inside the United
States." (Hearing on the Administration of U.S. Export
Control Programs Before the Subcommittee on Oversight of the
House Committee on Ways and Means, 102 Cong., 1st sess.
248). On May 1, 1991, the Commissioner of Customs was asked
whether that opinion comported with the agency's
understanding regarding the scope of the money laundering
laws. As the Customs Service disagreed with Ms. Moore's
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