Selling Abandoned Merchandise:

How the U.S. Customs Service Could Increase Revenues

GGD-83-79: Published: Sep 30, 1983. Publicly Released: Sep 30, 1983.

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GAO evaluated the U.S. Customs Service's program for the disposal of merchandise, which was abandoned for more than a year by importers and stored by Customs in public or private warehouses.

GAO found that Customs could increase the net sale proceeds of its auctions of abandoned merchandise by revising procedures and strengthening program controls. A review of five auctions showed that: (1) a shorter storage period would have reduced storage expenses and increased net revenues by $71,131 if the merchandise could have been sold 6 months sooner, or $94,093 if it could have been sold 9 months sooner; (2) Customs incurred additional storage costs of $335,870 because it did not remove merchandise from storage when the 1-year storage period expired because of staff shortages; and (3) Customs could have realized additional duties of about $8,060 if it had better implemented existing procedures for collecting and disposing of proceeds from the sale of bonded merchandise.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: Customs drafted legislation to amend section 491(a) of the Tariff Act of 1930, which was submitted to Congress in the Customs Enforcement Act of 1986. The Committee deleted the language addressing the recommendation when it changed the act to the International Drug Traffic Enforcement Act. Customs has not decided whether to ask Treasury to reintroduce the legislation in the new Congress.

    Recommendation: The Secretary of the Treasury should draft and submit legislation to amend section 491(a) of the Tariff Act of 1930, 19 U.S.C. 1491(a), to reduce the 1-year period that unclaimed imported merchandise must remain in Customs' custody before it is considered abandoned by the government.

    Agency Affected: Department of the Treasury

  2. Status: Closed - Implemented

    Comments: A directive regarding this recommendation was issued and sent to the field offices in March 1984.

    Recommendation: The Secretary of the Treasury should direct the Commissioner of Customs to promptly remove from storage and sell abandoned merchandise as soon as practical after the expiration of the prescribed storage period.

    Agency Affected: Department of the Treasury

  3. Status: Closed - Implemented

    Comments: A directive addressing this recommendation was issued in June 1984.

    Recommendation: The Secretary of the Treasury should direct the Commissioner of Customs to implement existing regulations for the recovery of duties from the sale of abandoned bonded merchandise.

    Agency Affected: Department of the Treasury

 

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