U.S. Postal Service

The international parcel delivery service operated by the U.S. Postal Service (USPS)--Global Package Link (GPL)--competes with private express firms, which have raised concern that GPL receives preferential treatment from customs in other nations. For example, they contend that GPL parcels are subject to fewer customs clearance requirements. GAO reviewed differences in customs treatment for GPL and private express carrier parcels by customs services in Canada, Japan, and the United Kingdom. GAO found the delivery and customs clearance processes for GPL and private carriers were based primarily on domestic import requirements applicable to mail and parcels imported by private carriers in the three countries. All three countries had separate customs clearance processes and requirements for mail and parcels imported by private carriers. GAO found that there were differences in foreign customs treatment of GPL and private express parcels. These differences were the most pronounced in Japan, where private carriers were subject to requirements regarding the preparation of shipping documentation and the payment of duties and taxes on their parcels that did not apply to GPL parcels. In the United Kingdom, USPS was providing shipping data to the customs service on GPL parcels that was similar to the information that private carriers were required to provide. In Canada, GPL and private express parcels were subject to the same requirements because GPL parcels were being delivered for USPS by a private express carrier there.

GAO noted that: (1) the delivery and customs clearance processes for GPL and private express parcels in Canada, Japan, and the United Kingdom were based primarily on the domestic import requirements applicable to mail and parcels imported by private carriers in those countries; (2) all three countries had separate customs clearance processes and requirements for mail and parcels imported by private express carriers; (3) under U.S. law, the private express carriers were required to submit their parcels to U.S. Customs for inspection prior to export, but USPS was not subject to this requirement for its outbound parcels; (4) differences in foreign customs treatment of GPL and private express parcels were greatest in Japan, where private express carriers were subject to requirements regarding the preparation of shipping documentation and payment of duties and taxes on their parcels that did not apply to GPL parcels; (5) in the United Kingdom, USPS was providing certain shipping data to the Customs Service on GPL parcels that was similar to the information that carriers were required to provide; (6) in Canada, GPL and private express parcels were subject to the same requirements because GPL parcels were being delivered for USPS by a private express carrier there; (7) regarding two major areas of concern to the carriers, GAO found no evidence that GPL parcels received preferential treatment over private express parcels in terms of: (a) the speed of customs clearance in any of the three countries; or (b) the assessment of duties and taxes in Canada and the United Kingdom; (8) on behalf of individual importers, USPS was paying duties and taxes on GPL parcels shipped to Canada and the United Kingdom; (9) GAO was unable to determine whether duties and taxes were assessed on dutiable GPL parcels shipped to Japan because: (a) USPS did not have records on payment of duties and taxes on GPL parcels shipped to Japan, because the recipients of postal parcels in Japan are responsible for paying applicable duties and taxes; and (b) Japan Customs did not provide statistics on the amount of duties and taxes that recipients paid on GPL parcels; (10) GAO found that the private express carriers followed similar delivery and customs clearance processes for parcels shipped from the United States to the three countries in its review; and (11) the private express industry has commented that differences in customs clearance requirements for postal and privately shipped parcels result in more work and higher costs for the carriers, placing them at a disadvantage in competing with USPS to provide international parcel delivery service.