U.S. Overpays for Suez Canal Transits

ID-82-19: Published: Feb 10, 1982. Publicly Released: Feb 10, 1982.

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Review of U.S. defense cooperation with Egypt has uncovered apparent inconsistencies in the tolls U.S. warships are being assessed by the Egyptian Government for transiting the Suez Canal. GAO initiated a review to examine these findings, to assess the magnitude of the overcharges, and to identify what steps can be taken to eliminate them.

Since the U.S. Embassy in Cairo began retaining records of Canal transits in 1979, overcharges have amounted to over 18 percent of the total payments. These overcharges primarily stem from inaccurate computations by the Suez Canal Authority and the absence of any verification of bills received by the U.S. Embassy. The tolls for some classes of U.S. ships which transit the Canal have been overstated, because the ships did not have Suez Canal Special Tonnage Certificates which attest to the net weight of a ship for Canal toll purposes. Sufficient controls would reduce the unnecessary expenditure of Government funds and ensure that, in the future, an objective standard is used to compute toll costs.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretary of Defense should work with the Coast Guard to accelerate the preparation and dissemination of Suez Canal Special Tonnage Certificates for all classes of U.S. warships and vessels in the Military Sealift Command to introduce greater objectivity into the computation of tolls.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretaries of State and Defense should establish a routine verification procedure, within the office of the Defense Attache, for all bills forwarded by the Egyptian Government for Suez Canal toll collection.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretaries of State and Defense should establish a routine verification procedure, within the office of the Defense Attache, for all bills forwarded by the Egyptian Government for Suez Canal toll collection.

    Agency Affected: Department of State

 

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