U.S. Imports

Unit Values Vary Widely for Identically Classified Commodities Gao ID: GGD-95-90 April 26, 1995

Importers bringing a shipment of goods into the United States must provide information to the Customs Service showing the quantity and overall value of each commodity being imported. This information allows Customs to collect duties and fees; enforce any quantitative restrictions, such as import quotas; and develop information that can be used by the Census Bureau to compile trade statistics. In recent years, these statistics have been a cause for concern because unit values for the same type of commodity can vary over a wide range when they are used to calculate a value per unit imported. This report reviews the documentation of the importation of eight classifications of commodities for fiscal year 1992 and determines (1) how widely unit values for identical types of commodities varied and (2) why such variations occurred.

GAO found that: (1) unit values for identical imports varied widely because of overly broad commodity classifications and product misclassifications; (2) although Customs used Census Bureau-developed parameters to screen filers' entries and detect possible unit value errors that could adversely affect the quality of trade data, most of the parameters were so broad that Customs only detected errors involving extremely high or low unit values; (3) the errors that were noted had little effect on quotas, duties, and fees for the 80 transactions reviewed; (4) although generalizations about the overall level of errors in the Import Detailed Data Base could not be made, the high number of errors found indicated the need to improve Automated Commercial System (ACS) data accuracy; (5) a high error rate could threaten the accuracy of U.S. trade statistics and Customs ability to screen transactions for errors or illegal activities; and (6) adding narrower unit value ranges to ACS would allow filers to identify and correct more errors during data entry.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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