Summary

To obtain better statistics and enhance the enforcement of export control laws, the Customs Service in 1991 initiated the Automated Export System (AES). AES, which depends on exporting companies to electronically enter data on shipments, was designed to improve reporting and help inspectors better target illegal shipments. However, many exporters are reluctant to enter data on shipments, and technical limitations hamper the ability of other agencies to use the system. Currently, only a small fraction of the export community uses AES (participation is voluntary), and the data entered represent less than one percent of all exports. Moreover, 25 percent of all U.S. ocean freight forwarders that GAO contacted had never heard of AES.

GAO noted that: (1) it is not yet clear what benefits will result from the use of AES because many critical implementation issues remain unsolved; (2) although AES has the potential to improve export reporting and enhance enforcement efforts, it is unlikely to achieve these objectives unless more exporters are willing to participate and limitations that prevent other agencies from fully using the system are resolved; (3) concerning the trade community's limited participation, GAO found that: (a) only a small fraction of the export community is using AES; (b) most exporting companies responding to GAO's survey are not likely to use AES over the next 3 years; and (c) twenty-five percent of all U.S. ocean freight forwarders had not heard of AES; (4) benefits cited by companies using AES include automated filing, reduced paperwork, personnel, and administrative costs, participating in the initial development of AES, and filing all data at a central filing point; (5) some segments of the trade community contend that the predeparture filing requirement is inconsistent with their business practices and costly; (6) AES is designed to help target illegal shipments, identify high-risk shipments, and compile exporter histories; (7) the system's usefulness as an enforcement tool is limited because: (a) it is not linked with the databases of other law enforcement agencies; (b) a proposal to allow exporters to file data after shipment could undermine efforts to detect export violations; (c) AES allows export data to be transmitted only hours before a shipment departure, which may not provide sufficient time to target possible illegal shipments; and (d) many Customs inspectors anticipate that illegal exporters are unlikely to use AES to file their export data; (8) AES faces limitations in achieving its goal to create a single information collection and processing center for the electronic filing of required export documentation; (9) many export-related agencies are subject to existing regulations requiring them to retain their own licensing procedures and have requirements that will not be satisfied through AES; (10) Customs is attempting to resolve these issues through several means; and (11) a cost-benefit analysis is needed to determine how or whether to proceed with implementation of AES.