U.S. Customs Service

This report focuses on the timeliness with which the Customs Service's Office of Regulations and Rulings (OR&R) issues rulings on such things as the proper classification and valuation of imported goods. GAO found that OR&R continues to have significant problems issuing the majority of headquarters rulings within the 120-day goal it has set as a benchmark for issuing timely rulings. It appears that delays are caused by various factors, including the need for additional information when processing rulings and the mishandling of requests by OR&R and its customers. However, OR&R acknowledges that it has had problems because of staffing shortages and workload demands. OR&R has taken steps to correct problems with its Legal Case Inventory System, but problems persist.

GAO noted that: (1) OR&R did not issue the majority of its prospective rulings in a timely manner; (2) GAO's review of a random sample of 70 hard-copy case files representing approximately 610 rulings showed that about two-thirds of the rulings that were requested and issued between January 1, 1997, and October 26, 1999, were not completed within OR&R's 120-day benchmark for those rulings; (3) GAO estimated that about 16 percent of the rulings took longer than 365 days to process and issue; (4) available records and discussions with OR&R officials did not always enable GAO to determine why OR&R's turnaround time exceeded 120 days, but some rulings may have taken longer to issue than the benchmark time frame because: (a) OR&R sent the product to a laboratory for analysis or obtained additional information; or (b) the request was not properly handled by OR&R or the requesting importer; (5) OR&R acknowledged problems with the timeliness of headquarters rulings, and attributed many of these problems to staffing shortages and competing workload demands; (6) although OR&R uses LCIS to track the progress of its prospective rulings, LCIS is not an effective tool for measuring the timeliness of headquarters rulings because it does not contain accurate and reliable data; (7) GAO's comparison of data from the hard-copy case files with data on those files in LCIS showed that most of the cases had missing or incorrect data in LCIS; (8) GAO was not always able to determine why LCIS data was inaccurate, but factors that affected accuracy included data entry errors and differences in the way OR&R staff interpreted guidance for data entry and used the system to track cases; (9) in the past, OR&R has acknowledged problems with LCIS and, in May 1998, redesigned the system and revised system guidance; and (10) however, problems with LCIS continue because, in addition to the previously cited factors, users cannot readily distinguish between different types of cases, such as prospective rulings and internal advice memorandums, among other problems.

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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