U.S. Customs Service:

Merchandise Processing Fee--Examination of Costs and Alternatives

GGD-90-91BR: Published: Jun 15, 1990. Publicly Released: Jul 16, 1990.

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Pursuant to a congressional request, GAO reviewed the U.S. Customs Service's merchandise processing fee charged to importers, focusing on: (1) costs of processing imported merchandise; (2) Customs' plans for changing the fee to address international trade concerns regarding the fee's basis and excess fee amounts; and (3) problems Customs could face in instituting fee changes.

GAO found that: (1) it could not determine whether Customs' labor estimates for processing merchandise were accurate, since Customs lacked sufficient data to establish its actual costs; (2) Customs calculated costs primarily by estimating the number of staff years used to process imported merchandise, but did not keep data on the actual time its employees spent processing the merchandise; (3) Customs planned to develop a new payroll system to establish accurate cost estimates; (4) Customs developed two alternative fee proposals to address international concerns, but both would require congressional action; (5) Customs believed the proposals would bring collections in line with its aggregate costs and link individual fees to importers' processing costs, but it did not adequately design the proposals to accomplish those goals; (6) Customs did not reduce the proposed fees to account for past excess collections; and (7) Customs could face operational problems and revenue losses in instituting either fee proposal, and planned increased monitoring to guard against revenue losses.

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