I was asked today to outline my vision for Customs in the 21st century. It's fitting that any discussion of the future of Customs take place in this forum -- because this Association and its members are a vital part of that vision.

The nexus between Customs and the Brokers and Forwarders is as large and as obvious as the nearly 20 million trade entries we process together each year. That's 95% of the total number of entries processed annually by Customs.

This alone speaks to the necessity of partnership between us. But even more, through your ties to the hundreds of thousands of importers you represent, you are also our most important link to the new information-driven era of enhanced compliance, more efficient trade processing, and reasonable care.

At no other time in its more than 200 year history has Customs faced the challenges it does today. A spiraling volume of trade will double our workload in the next five years alone, while our resources will remain relatively static. To meet the staggering demands of our dynamic global marketplace, we will rely increasingly on technology that pinpoints risk, and permits the great majority of lawful trade to pass through our borders unimpeded.

But our drive towards modernization can only happen with your help and your input. Your expertise has proven invaluable in the past to the redesign of many of Customs trade processes, and it will be just as crucial, even more so, in the months and years to come.

Your visit to Washington comes at a very opportune time.

The Congress is poised to appropriate the first major piece of funding for the Automated Commercial Environment, or "ACE". 130 million dollars for ACE was contained in the draft conference report on the 2001 Treasury Postal Appropriations bill. We're optimistic that the funding will remain intact, and that the bill will be signed before the Congress adjourns this fall.

The report also called for another one $123 million to shore up our current system, ACS. It's critically important that we keep ACS going while we fund and construct ACE. We continue to experience so-called "brown-outs" with ACS -- unacceptable down-time and outages that slow up trade processing.

We've taken care of the problem each time and we'll continue to do so, but this is not the way we want to do business, and I know it's not the way you want to do it either. I can tell you that band-aids and quick fixes are not a part of our vision for the future.

That's why we're pushing so hard for ACE, with some promising results. ACE really started to take off when the business community coalesced around the issue and let everyone know just how much new automation means to the trading future of our nation.

What will the funding buy us in 2001? It will allow us to move ahead with our "request for proposal" process, and selection of a prime contractor to build the new system. We will award that contract by February, 2001. It will also enable us to move ahead on software development.

I'd ask you to thank the members of Congress you visit over the course of this week for their assistance in delivering on the start-up funds for ACE, in particular Congressmen Kolbe and Hoyer, and Senators Campbell and Dorgan. But remember this is only the first step. We have to fund the system for the next four to five years to see the entire project through.

When the trade community and Customs speak with one voice, great things can happen for all of us. That's why I'm equally confident about our prospects for entry revision as well. Together with a new automated system, entry revision forms the second strong pillar of our modernization platform.

"E.R.P." is designed to simplify the entry process, to separate out high-volume, low-risk importers from those more prone to violations of our laws; to streamline payments through account management and periodic billing; and to be more flexible with the period granted for corrections. It's a big step in the right direction, and it will involve some major statutory changes.

When I spoke to your national membership in March, Customs was hoping to get legislation before the Congress this fall. That's not going to happen now, due in part to the scope and complexity of this project, and in part to the difficult task of getting a consensus from the Trade on the details of entry revision. But that cannot and will not stop us from pressing ahead to reach agreement on this crucial initiative.

We solicited and received some excellent feedback from the Trade that led to our second Entry Revision Proposal, which we put out in June. But the trade community could not agree upon certain important issues.

Also, as you know, the Trade issued a competing proposal for process change that focused mainly on one specific piece: data collection and entry summary at time of release. While we disagree with certain aspects of that proposal, we'll continue to work to resolve our differences. But again, I would caution that we must speak with one voice. We had an opportunity to get real change going in the way we process trade, and despite a promising start, that opportunity was lost for this year.

Granted, we had a short congressional year to work with, and an incredibly complex issue on which to gain a consensus. But all the more reason to re-energize our partnership now, focus our efforts, and deliver a solid, unified proposal to our congressional leaders before the opportunity passes again.

To that end, Customs will continue its meetings with the Trade on entry revision. But that outreach will not be limited to entry revision alone. We must take care to educate each other on the entire range of modernization developments and needs.

I know Customs has been participating in the brokers' training and information sessions for members. We conducted a series of presentations at your national convention, and we're doing more of that with you here in Washington this week. We've also sent out representatives to seminars and briefings conducted for brokers around the country. This outreach is critical, not only because it enhances communication between us, but because it breeds greater uniformity in trade processing and your understanding of Customs' laws.

Meanwhile, we're stepping up training internally at Customs as well. We've issued a new broker training guidebook that has been used to instruct our employees in the field. Our training will continue and expand over the course of the next year.

There's plenty going on for our people to keep informed about, like our new Broker Account Prototype. I want to thank the Association for working with us so closely on this project, notably your President, Peter Powell, for leading by example. C.H. Powell Incorporated of Boston is one of five broker accounts included in the prototype. The others are: A.N. Deringer; Tower Group International; AKA international; and Jack Huls Incorporated.

Account Management is a "win-win" for Customs and the brokers. By moving from single entry processing to large accounts, Customs can work more efficiently with brokers on enhancing compliance, while leaving you time better spent on getting your clients' goods into our national market without delay.

Under the Prototype, we're looking to add two accounts each month through next July. Where we go from that point depends upon available resources and the results of a comprehensive review of our success rate with the program.

Last March, we published the Broker Regulations, another hard-earned product of our successful cooperation. If our vision of the future of trade processing is painted with the broad strokes of automation and entry revision, then the Broker Regulations provide the framework for that picture.

The Regulations were designed to meet the changing needs of business. For example, we're moving forward on National Permits. Through the provision of these permits, brokers large and small have greater flexibility in working with their clients, and a stronger hand in helping them enhance compliance -- plus, wider accessibility to Customs' special programs, including Drawback and our automation prototypes.

Customs issued the first Broker National Permit in may to A.K. Deringer. In fact, I issued it myself, to Deringer's Jake Holtzschieder. We've since issued a hundred more.

The Broker Regulations also simplify the examination and license application procedures, and give greater choice as to when and where prospective brokers test and apply for their credentials.

Clearly, our modern notion of trade facilitation must go well beyond improving the process of how we enter goods. It must encompass the full range of transactions between us. This is an incredibly complex business, and it requires our cooperation on many fronts.

Our Deputy Commissioner, Chuck Winwood, has led our efforts to restructure the compliance assessment process in consultation with the trade. Those changes allow greater flexibility in assigning risk categories and in recognizing those who have worked hard to raise their compliance levels.

We're looking to improve and streamline our Reconciliation Prototype. There are problems to be worked out, but the Prototype in general has won strong acceptance and support from importers.

Last month, we issued a notice of intent to various trade associations, yours among them, regarding a proposal for a new drawback module within the Automated Export System. Your comments, which we've asked for by September 29th, will be the first crucial step in automating the export portion of drawback.

When I last spoke to your national convention in March, I offered some reflections on the past. I discussed the legacy of cooperation between Customs and the trade, and the progress made in our modernization drive so far. Today, I want to stress the need to raise our sights again on the future.

Last Tuesday, we kicked off our "Millennium Project," a series of special meetings focusing on U.S. Customs in the 21st century. For the next two months, we'll be holding discussions with leading figures from industry and academia, former top Customs officials, and current senior managers from different ports and departments across the agency.

I've asked the participants in these gatherings to give Customs a sense of the future, and to get us thinking about the challenges we need to prepare for. Why? Because so many of our most important resource decisions today are based on our projections of the future. I want those projections to be as accurate and informed as possible.

The business of Customs is affected in so many ways, by so many emerging global trends. Our series began with a discussion on trade and the global economy. Other topics will include: Travel and Transportation; Criminal Justice and National Security; Inventions and Technology; and the Workforce of the 21st century.

We have an outstanding line-up of speakers and participants, and I'm looking forward to generating a lot of good ideas from our meetings -- ideas we'll be sharing with you.

The Millennium Project is one among many initiatives designed to prepare Customs for a new era of global trade and enforcement. As you know, we've also developed a resource allocation model, the first of its kind in the federal government, to project our staffing needs at every Customs location around the country.

The model is currently under study by the Treasury Department and the Office of Management and Budget. Once that review is completed, we look forward to releasing our findings.

Despite all the tools at our disposal, the most powerful ingredient in our future commercial success remains our collaboration with you. You are our bridge to America’s importing and exporting communities. You will play a big part in helping us to deliver on our message of change.

Our work is cut out for us, but our dialogue is strong. I have faith that the partnership that ushered in the modern era of trade processing will deliver for the public, as it has done time and time again. And I believe our ability to weather the complex challenges that we've confronted so far speaks to our determination to adapt to new challenges, and despite all the obstacles, to succeed.

Thank you for your support of the Customs Service.