Merchandise Control System at the U.S. Embassy in Taipei, Taiwan

FPCD-77-75: Published: Aug 26, 1977. Publicly Released: Aug 26, 1977.

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The merchandise control system administered by the U.S. Embassy in Taipei, Taiwan, was designed to control the importation, use, and disposal of duty-free commodities such as personal vehicles, other personal property, and liquor by U.S. Embassy and attached agency personnel in Taiwan.

The Embassy's management controls on vehicle and other personal property sales and on gifts and liquor sales need improvement. In a review of sales of 60 vehicles, discrepancies were found in reporting of sales and purchase prices. These discrepancies should have been questioned. The examination of sales of personal property showed that a majority of items sold had been bought for personal use, as specified in regulations, but no profits were reported. Under present procedures, no verification is made of purchase or sales prices nor are reviews made to determine the length of time that items have been held. Procedures for insuring that profits are donated to charities, as required by regulations, were inadequate. Gifts given to persons outside the duty-free community did not always meet criteria specified in regulations. Liquor purchases were not adequately reviewed for potential black-marketing activities.

Recommendation for Executive Action

  1. Status: Closed

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

    Recommendation: Embassy officials should request documentation to support acquisition costs and sales prices and require employees to furnish proof that excess proceeds from sales were donated to charities. Where cost or sales price data are out of line with market prices, special explanations should be required. A review process should be established to insure compliance with limits on gifts. Liquor limits should be reduced and procedures introduced to periodically review purchases.

    Agency Affected:


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