Summary: Pursuant to a congressional request, GAO reviewed the Customs Service's Centralized Examination Stations (CES) Program, which requires importers to take their goods to central locations for Customs examination, focusing on the: (1) perceived program costs and benefits; (2) degree to which the importing community accepted CES; (3) the program's impact on segments of the importing community; and (4) answers to legal questions involving adherence to legal requirements and the permissible use of funds from the merchandise processing fees.
GAO found that: (1) the program reduced inspectors' travel time between examination sites and the related costs, and provided more direct supervision of inspectors, more efficient use of personnel, and more thorough cargo examinations; (2) although the importing community said that the program increased its efficiency at its expense in the form of higher charges for transporting and presenting goods for examination, Customs did not believe that presentation costs increased; (3) Customs' CES directive suggested examination of CES operators' fee structure and performance monitoring, but Customs relied on importing community complaints to stay informed of operators' fees; (4) degrees of program acceptance varied among ports, and most importers agreed to keep the program even though they expressed frustration about program costs; (5) Customs did not collect data to evaluate how well the program was working or to support ongoing decisionmaking on program expansion, since it decentralized that process to the district level; (6) Customs recommended, but did not require, written agreements with CES operators that specified the responsibilities and liabilities of the parties; and (7) although the importing community charged that Customs should have solicited comments from them and determined their potential costs prior to implementing CES, in accordance with the Administrative Procedure Act, the implementing directive was a statement of policy that was exempt from those requirements.
