Customary Intelligence

Bob Blanchard and his team lead Vermont's own CSI: Customs Scene Investigations.

by Tom Gresham

Bob Blanchard is assistant port director for trade operations for the U.S. Customs Department's office in St. Albans. He and his cohorts look for irregularities in documents of goods entering the country through the Highgate Springs border crossing.

Quietly, 17 miles south of the border that separates the United States from Canada, Bob Blanchard and eight co-workers fight crime from the comfort of their offices. Every day, among piles of paper, they hunt for those willing to break the law.

It's not the kind of glamorous crime-fighting easily adapted to television or film. There are no gun battles, no high-speed car chases. It's repetitious, sometimes tedious labor. It's office work.

Blanchard and his colleagues are import specialists at the U.S. Customs Department office in St. Albans. Working closely with inspectors at the border, import specialists sift through shipment paperwork in search of trade law violations perpetrated by importers.

Import specialists are stationed at offices across the country near border crossings and international ports. They not only uncover crime, they also aid the importers and search for civil violations.

Blanchard and his cohorts review the documents of goods that are entering the country through the Highgate Springs border crossing. The work is difficult and requires a sharp eye, one able to spot a telling detail hidden in a sea of ink. Catching these criminals does not require a gun and, Blanchard readily admits, the work sounds thoroughly bureaucratic; but civil penalties sometimes involving fines in the millions of dollars and criminal prosecutions are borne out of an import specialist's patient and diligent efforts.

"What we look for is situations where the importer or his broker has for some reason not followed the trade law," Blanchard says. "Now, in many cases that's just through negligence or sloppiness or whatever. That's OK because it's unintentional. Importing can be very complicated so you sometimes have to make some allowances for people. There has to be a motive to commit a crime. The cheating that is done is done in the paperwork by mis-describing it, undervaluing it, lying about the goods' origin, there's all kinds of ways to do it. That's what we're looking for: making sure that trade laws are complied with. Most of our cases do not end up going criminal, they go civil; and we handle the penalties right here in the office."

However, if Blanchard believes he has found a potential criminal situation, he refers the case to customs agents (they do carry guns). The customs agents some of whom are stationed in Burlington collaborate with the U.S. Attorney's Office to form a case against the alleged criminal, after deciding that the severity of the act and its blatancy warrant criminal prosecution. The import specialists' task has changed significantly since the 1994 passage of the North American Free Trade Agreement (NAFTA), which was designed to create free trade among the North American countries.

In many ways, NAFTA simplified the work of import specialists, because it reduced the number of shipments that require duty. The field of goods the import specialists had to concentrate on was narrowed dramatically; however, countervailing duties (against materials subsidized by foreign governments) and anti-dumping duties imposed by the U.S. Department of Commerce still keep them very busy.

Blanchard and his colleagues must follow the regular salvos fired in trade wars, where countries battle each other by instituting painful duties. The import charges designed to keep U.S. businesses from being at a competitive disadvantage provide a motive for importers to cheat. Duty taxes, if large enough, can severely handicap businesses from being competitive in the U.S. marketplace. As Blanchard points out, a 100 percent rate of duty which is assigned to Canadian softwood lumber effectively bans a product from being imported into the United States. A business paying such a high tax simply cannot compete against a company that avoids the cost of the tax although businesses with enough political clout to grab a legislator's ear can sometimes influence policy so as to ease the particular duty affecting their business.

"Under NAFTA, the bulk of the goods that come in, the importer makes a NAFTA claim and qualifies for free duty and it's easy," Blanchard says. "For most stuff it's very easy to meet NAFTA, so there really isn't much motive to cheat. But then you get into 100 percent rates of duty like you get in some of these trade wars sometimes it's just 27 percent or 30 percent, which is still a lot that's when you get into a lot of cheating, a lot of fraud."

While import specialists like Ann Goodrich (left), Marie Bleau and Linda Elrick do not formulate trade policy, but only help enforce it, they often suffer the wrath of displeased importers.

The effects of the duties on the businesses and their employees can be disheartening for Blanchard and other import specialists to watch. Blanchard may be the one to inform a business owner that he's now facing a 30 percent duty on his goods, even though he hadn't paid a cent of duty previously. The 100 percent duty on Canadian-imported lumber has created an uproar in Canada, where lumber holds a critical place in the country's economy. The present trade restrictions are discussed and their effects analyzed constantly on the front pages and television news programs in Canada. As part of its response to the duty, Canada banned U.S. Customs agents' crossing the border.

Although import specialists do not formulate trade policy they only help enforce it they are often subjected to the wrath of displeased importers. Blanchard says it's hard not to sympathize with the plights of these business people.

"This is their livelihood, and so of course they're going to get really upset," Blanchard says. "The average guy is usually never aware of how these duties are going to affect him. Out of the blue sky one day, customs is telling you that the plastic sheet you've been importing for 30 years has a 100 percent duty on it. These people are looking at ruination."

It is no surprise, then, that many attempt to avoid the duties; and the odds, in some ways, are on their side. Considering the thousands and thousands of goods shipped across the border and the comparably small import staff reviewing them, some things are going to fall through the cracks. Matters are complicated by the fact that the companies involved are located outside of U.S. jurisdiction. Blanchard tells of one Canadian man who was on his sixth company and sixth name who has repeatedly escaped the grasp of U.S. Customs for trade violations.

"You have to understand we have huge vulnerabilities as far as the border goes seaports and airports, too," Blanchard says. "We look at about 2 percent of all shipments. Trains, for instance, it's rare for us to see all of what comes across. These people are savvy, they know what's going on."

These inherent disadvantages make the skills of the import specialists and the border inspectors particularly important. The ability to spot small, incongruous somethings is their most important talent.

Import specialists work closely with inspectors to find the inconsistencies that often mark the shipment of an importer hoping to sidestep duty obligations.

For example, before the current Canadian lumber duties were in effect, an agreement existed that imposed excise taxes on lumber from only some of the provinces. Shipments from other provinces did not require payment of taxes. Subsequently, some importers lied on their paperwork, claiming the lumber came from one of the provinces without the tax obligations.

Really large ports like JFK International Airport have specialists who might only handle sweaters from Korea, says Blanchard. Here, however, each of his two teams of specialists, including Cheryl Teague (left), Janet Induni and Suzanne Lussier, must be familiar with half the items listed in the large book of products imported.

Meanwhile, the lumber was marked with the name of a mill from a taxed province. If the inspector relayed the mark of the mill to the import specialist, the import specialist could determine that the importer was lying and trying to avoid the taxes.

"I maintain that there is no substitute for an eagle eye at the border and a suspicious mind going through the documents," Blanchard says. "If you're good at it, then you can really spot things that don't fit the proper pattern."

Of course, the northern border of the United States has become a much different place in recent years. Blanchard says the border was always seen as a low security risk until a man was arrested crossing from Canada into Port Angeles, Wash., in 1999, apparently with plans to set off a bomb in the Los Angeles International Airport. Stopping trade violations had been the top concern for northern border officials, but the perspective began to change. Then, the Sept. 11 terrorist attacks flipped the attitude at the border completely. The staff has virtually doubled at the Highgate Springs crossing in the past 14 months.

With rumors of al-Qaida terrorist cells in Montreal, crossings officials very definitely have terrorists on their mind. Blanchard says import specialists still review only about 2 percent of import transactions, "but our commissioner likes to say we look at 100 percent of all high-risk transactions."

"When you get to a point of seeing a certain percent of the vehicles, you just paralyze commerce," Blanchard says. "And that happened after Sept. 11. The lines were back miles from some ports. There were hours and hours of waiting in line to cross the border. You just cannot look closely at everything that comes across and still have trade in any reasonable sense."

However, apparently innocent material is no longer automatically viewed as a low-risk shipment. In an attempt to maximize their ability to prevent terrorists or terrorist weaponry from leaking across the border, U.S. Customs is reaching out to importers for help. U.S. Customs hopes to shore up the security of Canadian importers' supply chains.

"It's very obvious now that there's no such thing as low-risk merchandise," Blanchard says. "It doesn't matter what's on that truck if the driver's been compromised. He could be carrying hay to feed cows, which is about as low-risk as you can get, but if he diverted that hay to somewhere else and put God knows what in there for $50,000 well, that's what we need to guard against. So the securing of the supply side is looking at who's driving these trucks, every stop along the way, the people involved and their security.

"We want the company to say, 'As far as I know, my people are safe and the freight line that I'm using is good.' We're asking trade to voluntarily come forward and do this on our behalf. It doesn't matter how low-risk you've been in the past if you're not signed up in this program. The idea is to whittle down the people that we don't know about. It gives us a better idea of who we need to look at."

High import duties provide a motive for importers to cheat, so Blanchard's team must keep abreast of changes in duty taxes. Bob Haspray (right) leads one of two teams of import specialists, such as Frank Della Rocco.

Import specialists must use "risk management" strategies to pick out which shipments are screened carefully. New equipment, recently installed, will help border inspectors see through an 18-wheeler and measure the density of its cargo, making sure it matches what has been represented to be aboard.

While border staff has been beefed up, the import specialists in St. Albans have seen a cut in personnel from 12 to nine. Considering that more than 360,000 shipments travel through the Highgate Springs border annually, there's hardly room for specialization for the specialists. They must have knowledge of an exceptionally diverse mixture of goods. There are more than 14,000 codes specialists must use to record shipments of various goods.

"It's hard to keep track," Blanchard acknowledges. "It's hard to be an expert on everything. There are a lot of changes. The obvious example is technology. Our book may be out of date by the time we get it. There's constant lobbying on the part of the industries to get more and different information on their goods."

Blanchard, an Essex resident, has been working as an import specialist for 29 years. He says most of the specialists have many years of experience within U.S. Customs. Some are former inspectors. Most of them find that the job has a certain thrill not associated with the typical federal office position.

"You just never know what's going to come across your desk," Blanchard says. "There is a lot of variety. There is also a lot of repetition. Most of us like it when we can get involved in a situation where we detect somebody committing some kind of fraud. There's something about it. It's what makes this job rise above the level of the normal paper-shuffling."

Originally published in December 2002 Business People-Vermont