U.S. Customs Service:

Office of Regulations and Rulings Has Yet to Establish Performance Measures

T-NSIAD-97-115: Published: Mar 11, 1997. Publicly Released: Mar 11, 1997.

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Benjamin F. Nelson
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GAO discussed several key issues regarding the management of the U.S. Customs Service's Office of Regulations and Rulings (ORR), focusing on: (1) what this office does; (2) how it measures its performance; (3) the extent to which it is meeting its internal timeliness goals; and (4) industry views regarding its performance.

GAO noted that: (1) ORR facilitates the entry of goods into the United States, valued at over $800 billion in 1996, by: (a) drafting regulations implementing U.S. trade laws; (b) issuing rulings on the proper classification, valuation, country of origin and marking of imported goods; and (c) providing guidance to the trade community and other Customs units on their compliance responsibilities; (2) while ORR's legal and technical analysis and advice are critical to Customs' trade administration mission, Customs has not included ORR in its annual plans identifying goals and performance measures; (3) as a result, ORR has not prioritized its work, set office-wide objectives, or established how to measure its overall performance; (4) ORR's only performance-related measure is set forth in a 1989 directive issued by the Commissioner of Customs which covers a limited but important segment of ORR's work; (5) the directive requires that certain legal decisions, or rulings, that deal with the classification of merchandise be issued within 120 days of receipt by Customs; (6) ORR recently set a goal of 30 days for a limited number of rulings dealing with the country of origin of textile and apparel imports; (7) GAO found that ORR has not determined whether it was meeting the timeliness requirements established in the 1989 directive; (8) based on GAO's analysis, GAO learned that ORR did not meet the requirement to issue rulings within 120 days for 53 percent of the classification cases closed in 1996 that GAO reviewed; (9) ORR did not meet its internal 30-day target to issue rulings on country of origin cases for 59 percent of the cases GAO reviewed; (10) by not tracking whether it is meeting its timeliness targets and by having performance measures on only a limited segment of its work, ORR is not able to measure its overall effectiveness; (11) if Customs included ORR in the annual planning process, ORR would assess its overall workload and priorities, and then be able to determine whether its current timeliness goals for classification rulings are appropriate or whether changes are needed in its processes and de facto priorities; (12) overall, representatives from the trade community GAO interviewed were generally pleased with the quality of ORR's services; (13) they indicated that, by and large, ORR rulings provided important analyses and information about the duties they should expect to pay, and they noted that the rulings were crucial to their ability to make effective business decisions and comply with Customs' regulations; and (14) the only concern they cited was the timeliness of ORR's decisions.

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