Internal Controls: Black Marketing of U.S. Commissary and Base Exchange Merchandise in South Korea
NSIAD-91-38
Published: Oct 30, 1990. Publicly Released: Nov 30, 1990.
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Highlights
Pursuant to a congressional request, GAO reviewed the black marketing of duty-free goods acquired from U.S. retail outlets in South Korea for profit or personal gain.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should direct the Commander, U.S. Forces, Korea, to implement cost-effective ration control system procedures that provide reasonable assurance that the objectives of the system will be accomplished. |
Closed – Implemented
DOD concurred with the recommendation and stated that U.S. Forces, Korea, was implementing a new ration control program. The new program is similar to ration control programs operated in other commands worldwide. It rations liquor purchases, less beer and wine, and cigarettes, monitors the purchase of high-value items, and permits unrestricted use of commissary and exchanges by soldiers.
|
| Department of Defense | The Secretary of Defense should direct the Commander, U.S. Forces, Korea, to work with the U.S. embassy officials in Korea to develop new approaches to encourage the Korean government to increase its efforts to deter black market activities. |
Closed – Implemented
DOD concurred but stated that as long as the Korean market remains restricted, the black market will continue to be lucrative. DOD stated that there had been recent progress in the General Agreement on Tariffs and Trade and that a successful conclusion to the talks promise to open the Korean market and thus reduce the black market.
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Armed forces abroadContrabandForeign governmentsFraudInternal controlsInventory controlPost exchangesProgram abusesRetail facilitiesTariffs