Customs Service:

Passenger User Fee Needs to Be Reevaluated

GGD-95-138: Published: May 22, 1995. Publicly Released: Jun 21, 1995.

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Pursuant to a congressional request, GAO reviewed the passenger user fees (PUF) that the Customs Service charges all passengers entering the United States by sea or air, focusing on: (1) whether carriers have collected and remitted PUF as required; (2) factors hampering the collection of PUF; and (3) options for improving the collection and remittance of PUF.

GAO found that: (1) air and sea carriers collected and remitted to Customs $756.4 million in PUF between July 1986 and the end of fiscal year 1993; (2) some carriers collected PUF but did not remit them, while other carriers did not collect any PUF for certain periods of time; (3) carriers owed about $45 million in PUF from July 1986 to December 1990; (4) Customs' ability to collect PUF is hampered by inconsistencies in collecting and remitting PUF, some carriers' misinterpretations of passenger exemptions, and internal control weaknesses; (5) Customs' ability to identify nonpayment of PUF through compliance audits has limitations, since it can only audit three or four carriers annually and its auditors frequently encounter obstacles while conducting audits; and (6) Customs could require the collection and remittance of PUF at the time and place of arrival, although the feasibility or costs of implementing such an option has not been evaluated.

Matters for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: Customs' Office of Finance performed a feasibility test of the recommendation using Singapore Airlines as the subject. The test concluded that the collection options and several submitted by the OIG were not workable nor feasible. No further action is intended.

    Matter: Congress may want to consider requiring Customs to evaluate the feasibility of various options to increase collection of PUF, such as changing the fee collection and remittance system to one similar to other Consolidated Omnibus Budget Reconciliation Act user fee systems, or billing carriers for the fee.

  2. Status: Closed - Not Implemented

    Comments: Customs' Office of Finance performed a feasibility test of the recommendation and concluded that various options were not workable nor feasible. No further action is intended.

    Matter: Congress may want to consider requiring Customs to recommend legislative changes that would be necessary to implement options that are considered feasible and cost-beneficial.

 

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