Customs Service:

Acceptance of Centralized Cargo Examinations Varies

GGD-90-24: Published: Dec 22, 1989. Publicly Released: Dec 22, 1989.

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Pursuant to a congressional request, GAO reviewed the Customs Service's Centralized Examination Stations (CES) Program, which requires importers to take their goods to central locations for Customs examination, focusing on the: (1) perceived program costs and benefits; (2) degree to which the importing community accepted CES; (3) the program's impact on segments of the importing community; and (4) answers to legal questions involving adherence to legal requirements and the permissible use of funds from the merchandise processing fees.

GAO found that: (1) the program reduced inspectors' travel time between examination sites and the related costs, and provided more direct supervision of inspectors, more efficient use of personnel, and more thorough cargo examinations; (2) although the importing community said that the program increased its efficiency at its expense in the form of higher charges for transporting and presenting goods for examination, Customs did not believe that presentation costs increased; (3) Customs' CES directive suggested examination of CES operators' fee structure and performance monitoring, but Customs relied on importing community complaints to stay informed of operators' fees; (4) degrees of program acceptance varied among ports, and most importers agreed to keep the program even though they expressed frustration about program costs; (5) Customs did not collect data to evaluate how well the program was working or to support ongoing decisionmaking on program expansion, since it decentralized that process to the district level; (6) Customs recommended, but did not require, written agreements with CES operators that specified the responsibilities and liabilities of the parties; and (7) although the importing community charged that Customs should have solicited comments from them and determined their potential costs prior to implementing CES, in accordance with the Administrative Procedure Act, the implementing directive was a statement of policy that was exempt from those requirements.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Customs developed an implementation plan to conduct periodic industry surveys on program effectiveness. The first survey was conducted in early 1991.

    Recommendation: To provide a basis for assessing program performance and to support decisionmaking, the Secretary of the Treasury should require the Commissioner of Customs to systematically evaluate CES program effectiveness.

    Agency Affected: Department of the Treasury

  2. Status: Closed - Implemented

    Comments: Customs Directive 3270-03, superceded by 3270-05, dated August 31, 1990, provides guidance in evaluating CES fees. In addition, Customs is issuing a handbook for the evaluation process. Customs management is currently reviewing the proposed handbook.

    Recommendation: The Secretary of the Treasury should direct the Commissioner of Customs to ensure that fees are reasonable at CES by amending Customs Directive 3270-03 to provide guidance as to how and when districts should evaluate CES-related fees.

    Agency Affected: Department of the Treasury

  3. Status: Closed - Implemented

    Comments: Customs Directive 3270-03, superceded by 3270-05, dated August 31, 1990, requires written agreements and specifies responsibilities and liabilities of Customs and CES operators. An accomplishment report will be done after the first recommendation is fully implemented.

    Recommendation: The Secretary of the Treasury should direct the Commissioner of Customs to amend Customs Directive 3270-03 to require uniform written agreements between Customs and CES operators that specify mutual responsibilities and liabilities of the parties.

    Agency Affected: Department of the Treasury

 

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