Visa Waiver Program: Actions Are Needed to Improve Management of 
the Expansion Process, and to Assess and Mitigate Program Risks  
(15-SEP-08, GAO-08-967).					 
                                                                 
The Visa Waiver Program, which enables citizens of participating 
countries to travel to the United States without first obtaining 
a visa, has many benefits, but it also has risks. In 2006, GAO	 
found that the Department of Homeland Security (DHS) needed to	 
improve efforts to assess and mitigate these risks. In August	 
2007, Congress passed the 9/11 Act, which provides DHS with the  
authority to consider expanding the program to countries whose	 
short-term business and tourism visa refusal rates were between 3
and 10 percent in the prior fiscal year. Countries must also meet
certain conditions, and DHS must complete actions to enhance the 
program's security. GAO has examined DHS's process for expanding 
the Visa Waiver Program and evaluated the extent to which DHS is 
assessing and mitigating program risks. GAO reviewed relevant	 
laws and procedures and interviewed agency officials in 	 
Washington, D.C., and in U.S. embassies in eight aspiring and	 
three Visa Waiver Program countries.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-967 					        
    ACCNO:   A84177						        
  TITLE:     Visa Waiver Program: Actions Are Needed to Improve       
Management of the Expansion Process, and to Assess and Mitigate  
Program Risks							 
     DATE:   09/15/2008 
  SUBJECT:   Airlines						 
	     Data collection					 
	     Data storage					 
	     Foreign governments				 
	     Homeland security					 
	     Illegal aliens					 
	     Immigration					 
	     International cooperation				 
	     International travel				 
	     Passports						 
	     Program evaluation 				 
	     Reporting requirements				 
	     Requirements definition				 
	     Risk assessment					 
	     Risk factors					 
	     Risk management					 
	     Standards evaluation				 
	     Travel						 
	     Visas						 
	     Waivers						 
	     Program goals or objectives			 
	     Program implementation				 
	     Visa Waiver Program				 

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******************************************************************
GAO-08-967

   

     * [1]Results in Brief
     * [2]Background
     * [3]Executive Branch Is Moving Quickly to Expand the Visa Waiver

          * [4]DHS Has Not Followed a Transparent Process for Visa Waiver P
          * [5]DHS Has Achieved Some Results in Visa Waiver Program Expansi

     * [6]DHS Has Not Fully Developed Tools Aimed at Assessing and Mit

          * [7]DHS Has Not yet Implemented Key Security Provisions of 9/11

               * [8]Plan to Verify the Air Departure of Foreign Nationals
                 Will N
               * [9]DHS's Planned Implementation of ESTA by January 2009 Will
                 Fa
               * [10]Implementation of Biometric Air Exit System before July
                 2009

          * [11]DHS Does Not Fully Consider Overstay Rates to Assess the Ill
          * [12]DHS Has Implemented Many of GAO's Prior Recommendations Aime

     * [13]Conclusions
     * [14]Recommendations for Executive Action
     * [15]Agency Comments and Our Evaluation
     * [16]GAO Comments
     * [17]GAO Contact
     * [18]Staff Acknowledgments
     * [19]GAO's Mission
     * [20]Obtaining Copies of GAO Reports and Testimony

          * [21]Order by Mail or Phone

     * [22]To Report Fraud, Waste, and Abuse in Federal Programs
     * [23]Congressional Relations
     * [24]Public Affairs

Report to Congressional Requesters

United States Government Accountability Office

GAO

September 2008

VISA WAIVER PROGRAM

Actions Are Needed to Improve Management of the Expansion Process, and to
Assess and Mitigate Program Risks

Visa Waiver Program Visa Waiver Program Visa Waiver Program iver Program
Visa Waiver Program Visa Waiver Program Visa Waiver Program Visa Waiver
Program Visa Waiver Program Visa Waiver Program Visa Waiver Program Visa
Waiver Program Visa Waiver Program Visa Waiver Program Visa Waiver Program
Visa Waiver Program Visa Waiver Program Visa Waiver Program Visa Waiver
Program Visa Waiver Program Visa Waiver Program Visa Waiver Program Visa
Waiver Program Visa Waiver Program Visa Waiver Program Visa Waiver Program
Visa Waiver Program Visa Waiver Program Visa Waiver Program Visa Waiver
Program Visa Waiver Program Visa Waiver Program Visa Waiver Program Visa
Waiver Program Visa Waiver Program Visa Waiver Program Visa Waiver Program
Visa Waiver Program Visa Waiver Program Visa Waiver Program Visa Waiver
Program Visa Waiver Program Visa Waiver Program Visa Waiver Program Visa
Waiver Program Visa Waiver Program Visa Waiver Program Visa Waiver Program
Visa Waiver Program Visa Waiver Program Visa Waiver Program Visa Waiver
Program Visa Waiver Program Visa Waiver Program Visa Waiver Program Visa
Waiver Program

GAO-08-967

Contents

Letter 1

Results in Brief 3
Background 6
Executive Branch Is Moving Quickly to Expand the Visa Waiver Program
without a Transparent Process 9
DHS Has Not Fully Developed Tools Aimed at Assessing and Mitigating Risks
in the Visa Waiver Program 15
Conclusions 29
Recommendations for Executive Action 30
Agency Comments and Our Evaluation 30
Appendix I Objectives, Scope, and Methodology 32
Appendix II Worldwide Refusal Rates for Short-term Business and Tourism
Visas, Fiscal Year 2007 34
Appendix III Key Legislative Requirements for Inclusion in the Visa Waiver
Program 40
Appendix IV Comments from the Department of Homeland Security 42
Appendix V Comments from the Department of Justice 51
Appendix VI GAO Contact and Staff Acknowledgments 53

Tables

Table 1: Status of Prior GAO Recommendations 28
Table 2: Worldwide Refusal Rates for Short-term Business and Tourism
Visas, Fiscal Year 2007 34

Figures

Figure 1: Comparison of DHS's Process to Expand the Visa Waiver Program
against the Standard Operating Procedures for Expansion 10
Figure 2: Short-term Business and Tourism Visa Refusal Rates, by Country,
Fiscal Year 2007 13
Figure 3: DHS's Current Plan to Meet Air Exit System Provision Omits Those
Who Remain in the United States 17
Figure 4: DHS's Anticipated ESTA Implementation Timeline 21

Abbreviations

CBP Customs and Border Protection

DHS Department of Homeland Security

ESTA Electronic System for Travel Authorization

ICE Immigration and Customs Enforcement

Interpol International Criminal Police Organization

MOU memorandum of understanding

US-VISIT U.S. Visitor and Immigrant Status and Indicator Technology

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United States Government Accountability Office

Washington, DC 20548

September 15, 2008 September 15, 2008

The Honorable Joseph I. Lieberman Chairman The Honorable Susan M. Collins
Ranking Member Committee on Homeland Security and Governmental Affairs
United States Senate The Honorable Joseph I. Lieberman Chairman The
Honorable Susan M. Collins Ranking Member Committee on Homeland Security
and Governmental Affairs United States Senate

The Honorable Dianne Feinstein Chairman The Honorable Jon Kyl Ranking
Member Subcommittee on Terrorism, Technology, and Homeland Security
Committee on the Judiciary United States Senate The Honorable Dianne
Feinstein Chairman The Honorable Jon Kyl Ranking Member Subcommittee on
Terrorism, Technology, and Homeland Security Committee on the Judiciary
United States Senate

The Visa Waiver Program enables citizens of 27 participating countries to
travel to the United States for tourism or business for 90 days or less
without first obtaining a visa from a U.S. embassy or consulate.^1 The
program has many benefits, including facilitating travel for millions of
foreign nationals seeking to visit the United States each year. However,
as we have reported,^2 the program also poses inherent security, law
enforcement, and illegal immigration risks to the United States. In
particular, Visa Waiver Program travelers are not subject to the same
degree of screening as those with visas because they are not interviewed
by a Department of State (State) consular officer before arriving at a
U.S. port of entry. During the visa issuance process, State consular
officers can determine if an individual has a criminal record or has prior
immigration violations. On the basis of their assessments, consular
officers decide The Visa Waiver Program enables citizens of 27
participating countries to travel to the United States for tourism or
business for 90 days or less without first obtaining a visa from a U.S.
embassy or consulate.^1 The program has many benefits, including
facilitating travel for millions of foreign nationals seeking to visit the
United States each year. However, as we have reported,^2 the program also
poses inherent security, law enforcement, and illegal immigration risks to
the United States. In particular, Visa Waiver Program travelers are not
subject to the same degree of screening as those with visas because they
are not interviewed by a Department of State (State) consular officer
before arriving at a U.S. port of entry. During the visa issuance process,
State consular officers can determine if an individual has a criminal
record or has prior immigration violations. On the basis of their
assessments, consular officers decide whether to approve or deny a visa
and, in doing so, help protect against individuals who pose a risk to the
United States. Without the added safeguard of the visa issuance process,
the Visa Waiver Program could be exploited to gain illegal entry into the
United States. Indeed, in September 2007, the Director of National
Intelligence testified that al Qaeda is recruiting Europeans because most
of them do not require a visa to enter the United States. Effective
oversight of the Visa Waiver Program is essential to finding the right
balance between facilitating legitimate travel and screening for potential
terrorists, criminals, and others who may pose law enforcement and illegal
immigration concerns.

^1The participating countries are Andorra, Australia, Austria, Belgium,
Brunei, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Japan,
Liechtenstein, Luxembourg, Monaco, the Netherlands, New Zealand, Norway,
Portugal, San Marino, Singapore, Slovenia, Spain, Sweden, Switzerland, and
the United Kingdom.

^2GAO, Border Security: Stronger Actions Needed to Assess and Mitigate
Risks of the Visa Waiver Program, [25]GAO-06-854 (Washington, D.C.: July
28, 2006).

The executive branch aims to expand the Visa Waiver Program to countries
in Central and Eastern Europe, and South Korea. According to the
Department of Homeland Security (DHS), some of these countries are U.S.
partners in the war in Iraq and have high expectations that they will join
the program due to their close economic, political, and military ties to
the United States. The executive branch has supported more flexible
criteria for admission to the program. In August 2007, Congress passed
legislation that allows DHS to consider admitting countries that otherwise
meet the program's requirements but that have business and tourism visas
refusal rates^3 between 3 percent and 10 percent, if the countries meet
certain conditions, such as cooperating with the United States on
counterterrorism initiatives.^4 Previously, only countries with refusal
rates below 3 percent in the prior fiscal year qualified to be considered
for admission. Before DHS can exercise this new authority, the
legislation--referred to as the "9/11 Act"--requires that the department
complete certain actions aimed at enhancing the security of the Visa
Waiver Program.

At your request, this report (1) examines the process DHS is following to
admit countries into the Visa Waiver Program and (2) evaluates actions
taken to assess and mitigate potential risks in the program.

Throughout the course of our work, we reviewed laws governing the Visa
Waiver Program and its expansion, and relevant regulations and agency
operating procedures, as well as our prior reports and testimonies. We met
with several DHS component agencies and offices, including Customs and
Border Protection (CBP); Immigration and Customs Enforcement (ICE); the
U.S. Visitor and Immigrant Status and Indicator Technology (US-VISIT); and
the Visa Waiver Program Office,^5 which is responsible for oversight of
Visa Waiver Program requirements. In addition, we interviewed officials
from State's Consular Affairs, Europe and Eurasia, and East Asia and
Pacific Bureaus, and met with International Criminal Police Organization
(Interpol) officials in Lyon, France, as well as officials from the
Department of Justice's (Justice) Interpol-U.S. National Central Bureau.^6
We also spoke with officials at U.S. embassies in three current and eight
aspiring Visa Waiver Program countries. Appendix I contains a more
detailed discussion of our objectives, scope, and methodology. We
conducted this performance audit from September 2007 to September 2008, in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our findings and conclusions
based on our audit objectives.

^3The refusal rate refers only to the temporary business and tourism visa
applications that are denied as a percentage of the total temporary
business and tourism visa applications for nationals of that country.

^4See Implementing Recommendations of the 9/11 Commission Act of 2007,
Pub. L. No. 110-53.

Results in Brief

The executive branch is moving aggressively to expand the Visa Waiver
Program by the end of 2008, but, in doing so, DHS has not followed a
transparent process. The department did not follow its own November 2007
standard operating procedures, which set forth the key milestones that DHS
and aspiring countries must meet before additional countries are admitted
into the program. As a result, State, Justice, and U.S. embassy officials
stated that DHS created confusion among its interagency partners and
aspiring Visa Waiver Program countries. Indeed, absent clear direction
from DHS, U.S. embassy officials in several aspiring countries told us
that it had been difficult to explain the expansion process to their
foreign counterparts and manage their expectations about when those
countries might be admitted into the Visa Waiver Program. Furthermore,
State officials said that it was difficult to explain to countries with
fiscal year 2007 refusal rates below 10 percent that have signaled
interest in joining the program (such as Croatia, Israel, and Taiwan) why
DHS is not negotiating with them. DHS, however, is negotiating with
several countries that had fiscal year 2007 visa refusal rates above the
10 percent ceiling (Hungary, Latvia, Lithuania, and Slovakia), with the
expectation that fiscal year 2008 rates will be below this ceiling.
Nevertheless, DHS achieved some security enhancements to the Visa Waiver
Program during expansion negotiations, including new agreements with
several aspiring countries on lost and stolen passport reporting. DHS,
State, and Justice agreed, however, that a more transparent process is
needed to guide any future consideration of program expansion. In
acknowledging weaknesses in the expansion process, DHS's Assistant
Secretary for Policy Development said that DHS did not have a clear
process at the outset of negotiations in late 2007, in part because the
department lacked prior experience in expanding the Visa Waiver Program
and because the program's legislative requirements had changed in August
of that year.

^5DHS's Visa Waiver Program Office, known prior to September 2007 as the
Visa Waiver Oversight Unit within the Office of International Enforcement,
is led by a director, who reports to the DHS Assistant Secretary for
Policy Development.

^6The U.S. National Central Bureau in Washington, D.C., facilitates
international law enforcement cooperation among the United States and
Interpol and its other member countries.

DHS has not fully developed tools to assess and mitigate risks in the Visa
Waiver Program. Specifically, DHS has not yet met two key certification
requirements in the 9/11 Act that would allow DHS to consider admitting
additional countries to the program with refusal rates between 3 percent
and 10 percent. First, DHS must certify that it can verify the departure
of not less than 97 percent of foreign nationals who exit from U.S.
airports. In February 2008, we testified that DHS's plan to meet this
provision will not demonstrate improvements in the air exit system and
will not help the department mitigate risks of the Visa Waiver Program,
because the plan does not account for data on those who remain in the
country beyond their authorized period of stay (referred to as
"overstays"). Second, DHS must certify that the Electronic System for
Travel Authorization (ESTA) for screening visa waiver travelers in advance
of their travel is "fully operational." DHS has not yet announced when it
plans to make this certification; however, ESTA became available on a
voluntary basis on August 1, 2008, and DHS anticipates that ESTA
authorizations will be required for all visa waiver travelers after
January 12, 2009.^7 DHS determined that the law permits it to expand the
program to countries with refusal rates between 3 percent and 10 percent
after it makes the two 9/11 Act certifications, and after the countries
have met certain conditions, but before ESTA is mandatory for all Visa
Waiver Program travelers. DHS may face challenges in implementing ESTA,
such as adequately informing the public and travel industry about the
system. In addition, for DHS to maintain its authority to admit certain
countries into the program, the 9/11 Act requires that the air exit system
also incorporate biometric indicators (such as fingerprints) by July 1,
2009. However, DHS is unlikely to meet this timeline due to several
unresolved issues. In addition, DHS does not fully consider countries'
overstay rates when assessing illegal immigration risks in the Visa Waiver
Program because the department's overstay data have weaknesses, according
to the Visa Waiver Program Office. Finally, DHS has fully implemented many
recommendations from our 2006 report aimed at improving DHS's ability to
assess and mitigate program risks, including screening U.S.-bound
travelers against Interpol's database of lost and stolen passports.
However, DHS has not yet fully implemented others, such as requiring that
all Visa Waiver Program countries report the theft or loss of blank and
issued passports to the United States and Interpol. Fully implementing the
remaining recommendations is important as DHS moves to expand both the
Visa Waiver Program and the department's oversight responsibilities.

^7According to DHS, ESTA will be implemented as a mandatory program for
all visa waiver travelers 60 days after publication of a notice in the
Federal Register. DHS anticipates issuing that notice in November 2008,
for implementation of the mandatory ESTA requirements on January 12, 2009.

To improve management of the Visa Waiver Program and better assess and
mitigate risks associated with the program, we recommend that DHS
establish a clear process, in coordination with State and Justice, for
program expansion that would include the criteria used to determine which
countries will be considered for expansion and timelines for nominating
countries, security assessments of aspiring countries, and negotiation of
any bilateral agreements to implement the program's legislative
requirements. In addition, we recommend that DHS designate an office with
responsibility for developing overstay rate information for the Visa
Waiver Program, explore cost-effective actions to further improve these
data's reliability, and use these validated data to help evaluate whether
current or aspiring Visa Waiver Program countries pose a potential illegal
immigration risk to the United States.

We received written comments on a draft of our report from DHS and
Justice, which we have reprinted in appendices IV and V, respectively.
State did not provide comments on the draft. DHS either agreed with, or
stated that it was taking steps to implement, all of our recommendations.
Justice did not comment on our recommendations, but provided additional
information about the importance of monitoring countries' reporting of
lost and stolen passports to Interpol, and its efforts, in collaboration
with DHS, to include screening against Interpol's lost and stolen passport
database in ESTA.

Background

In 2007, almost 13 million citizens^8 from 27 countries entered the United
States under the Visa Waiver Program.^9 The program was created to promote
the effective use of government resources and facilitate international
travel without jeopardizing U.S. national security. The United States last
expanded the Visa Waiver Program's membership in 1999; since then, other
countries have expressed a desire to become members. In February 2005,
President Bush announced that DHS and State would develop a strategy, or
"Road Map Initiative," to clarify the statutory requirements for
designation as a participating country. According to DHS, some of the
countries seeking admission to the program are U.S. partners in the war in
Iraq and have high expectations that they will join the program due to
their close economic, political, and military ties to the United States.
As we reported in July 2006, DHS and State are consulting with 13 "Road
Map" countries seeking admission into the Visa Waiver Program--Bulgaria,
Cyprus, Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania,
Malta, Poland, Romania, Slovakia, and South Korea.

Following the terrorist attacks of September 11, 2001, Congress passed
additional laws to strengthen border security policies and procedures, and
DHS and State instituted other policy changes that have affected a
country's qualifications for participating in the Visa Waiver Program. In
August 2007, Congress enacted the 9/11 Act, which provides DHS with the
authority to consider admitting into the Visa Waiver Program countries
that otherwise meet the program requirements, but have refusal rates
between 3 percent and 10 percent, provided the countries meet certain
conditions (see app. II for worldwide refusal rates for fiscal year 2007).
Before being admitted to the program, for example, the countries must
demonstrate a sustained reduction in refusal rates, and must be
cooperating with the United States on counterterrorism initiatives,
information sharing, and the prevention of terrorist travel, among other
things. In addition, DHS must complete two actions aimed at enhancing the
security of the program (see app. III for the key legislative requirements
for inclusion in the Visa Waiver Program).^10 In particular, to consider
admitting countries into the Visa Waiver Program with refusal rates
between 3 percent and 10 percent, DHS must certify the following to
Congress:

^8This figure does not account for multiple admissions into the United
States under the Visa Waiver Program by the same individual.

^9The Immigration Reform and Control Act of 1986, Pub. L. No. 99-603,
created the Visa Waiver Program as a pilot program. In 2000, the program
became permanent under the Visa Waiver Permanent Program Act, Pub. L. No.
106-396.

           o A system is in place that can verify the departure of not less
           than 97 percent of foreign nationals who depart through U.S.
           airports. Initially, this system will be biographic only. Congress
           required the eventual implementation of a biometric exit system at
           U.S. airports. If the biometric air exit system is not in place by
           July 1, 2009, the flexibility that DHS may obtain to consider
           admitting countries with refusal rates between 3 percent and 10
           percent will be suspended until the system is in place.

           o An electronic travel authorization system is "fully
           operational." This system will require nationals from Visa Waiver
           Program countries to provide the United States with biographical
           information before boarding a U.S.-bound flight to determine the
           eligibility of, and whether there exists a law enforcement or
           security risk in permitting, the foreign national to travel to the
           United States under the program. DHS recommends that applicants
           obtain ESTA authorizations at the time of reservation or ticket
           purchase, or at least 72 hours before their planned date of
           departure for the United States. The ESTA application will
           electronically collect information similar to the information
           collected in paper form by CBP.^11 To the extent possible,
           according to DHS, applicants will find out almost immediately
           whether their travel has been authorized, in which case they are
           free to travel to the United States, or if their application has
           been rejected, in which case they are ineligible to travel to the
           United States under the Visa Waiver Program.^12 Those found
           ineligible to travel under the Visa Waiver Program must apply for
           a visa at a U.S. embassy to travel to the United States.^13

           In addition, the 9/11 Act requires that visa waiver countries

           o enter into an agreement with the United States to report, or
           make available through Interpol or other means as designated by
           the Secretary of Homeland Security, to the U.S. government
           information about the theft or loss of passports within a strict
           time frame;

           o enter into an agreement with the United States to share
           information regarding whether citizens and nationals of that
           country traveling to the United States represent a threat to U.S.
           security; and

           o accept for repatriation any citizen, former citizen, or national
           of the country against whom the United States has issued a final
           order of removal.

           When DHS exercises its authority to waive the 3 percent refusal
           rate requirement, it shall, in consultation with State, take into
           account other discretionary factors, pursuant to the 9/11 Act,
           including a country's airport security standards; whether the
           country assists in the operation of an effective air marshal
           program; the standards of passports and travel documents issued by
           the country; and other security-related factors, including the
           country's cooperation with (1) the United States' initiatives
           toward combating terrorism and (2) the U.S. intelligence community
           in sharing information regarding terrorist threats. DHS works in
           consultation with State and Justice, as well as the intelligence
           community, as part of DHS's assessment of countries seeking to
           join the Visa Waiver Program.

           The executive branch is moving aggressively to expand the Visa
           Waiver Program by the end of 2008, but, in doing so, DHS has not
           followed a transparent process for admitting new countries to the
           program--an approach that has created confusion among other U.S.
           agencies in Washington, D.C.; U.S. embassy officials overseas; and
           those countries that are seeking to join the Visa Waiver Program.
           During the expansion negotiations, DHS has achieved some security
           enhancements, such as new agreements that, among other things,
           require the reporting of lost and stolen blank and issued
           passports.

           We found that the Visa Waiver Program Office has not followed its
           own standard operating procedures, completed in November 2007,
           which set forth the key milestones that DHS and aspiring countries
           must meet before additional countries are admitted into the
           program.^14 According to the standard procedures, State should
           submit to DHS a formal, written nomination for a particular
           country, after which DHS is to lead an interagency team to conduct
           an in-country, comprehensive review of the impact of the country's
           admission into the Visa Waiver Program on U.S. security, law
           enforcement, and immigration interests. Figure 1 depicts the
           standard procedures that the program office established to guide
           expansion of the Visa Waiver Program compared with DHS's actions
           since August 2007. Although State has only nominated one
           country--Greece--DHS has nonetheless conducted security reviews
           for countries that State has not yet nominated--Czech Republic,
           Estonia, Hungary, Latvia, Lithuania, Slovakia, and South Korea.
           According to State officials, until DHS has implemented the
           required provisions of the 9/11 Act, and aspiring countries have
           met all of the Visa Waiver Program's statutory requirements, State
           does not plan to nominate any other countries. DHS's Assistant
           Secretary for Policy Development told us that the department had
           determined that it would not follow the standard operating
           procedures during these expansion negotiations and, thus, had to
           "make up the process as it went along," in part because DHS had
           never expanded the program before and because Congress
           significantly changed the program's legislative requirements in
           August 2007.

^10Section 711 of the 9/11 Act specifically grants DHS the authority to
waive the 3 percent refusal rate requirement for countries--currently up
to a maximum of 10 percent--provided those countries meet other security
requirements.

^11This form is CBP's I-94W Nonimmigrant Visa Waiver Arrival/Departure
Form. According to DHS, the department is coordinating with commercial
aircraft and vessel carriers on the development and implementation of
messaging capabilities that will enable CBP to provide the carriers with
messages pertaining to a passenger's boarding status. Once ESTA is
mandatory and all carriers are capable of receiving and validating
messages from CBP pertaining to the traveler's ESTA status as part of
their boarding status, DHS plans to eliminate the I-94W requirement.

^12ESTA authorizations will be valid for up to 2 years and will allow the
individual to travel to the United States repeatedly within that period.
In some circumstances, such as when a passport has expired or a traveler
has changed his or her name, the traveler must apply for a new ESTA
authorization.

^13In addition to receiving an authorization or rejection notice upon
submitting an ESTA application, the applicant may also receive a response
noting that the application is pending.

Executive Branch Is Moving Quickly to Expand the Visa Waiver Program without a
Transparent Process

DHS Has Not Followed a Transparent Process for Visa Waiver Program Expansion

^14In 2006, we reported on the executive branch's process for admitting
additional countries into the Visa Waiver Program. See GAO, Process for
Admitting Additional Countries into the Visa Waiver Program,
[26]GAO-06-835R (Washington, D.C.: July 26, 2006).

Figure 1: Comparison of DHS's Process to Expand the Visa Waiver Program
against the Standard Operating Procedures for Expansion

State and Justice officials told us that the lack of a transparent
timeline and requirements for Visa Waiver Program expansion has led to
confusion among U.S. agencies in headquarters' offices and at U.S.
embassies overseas, as well as foreign governments seeking to join the
program. For example, DHS's standard procedures were not updated to
account for the department's plans to sign with each of the aspiring Visa
Waiver Program countries separate memorandums of understanding (MOU) that
lay out the new legislative requirements from the 9/11 Act. According to
DHS, while not required by the act, the U.S. government is seeking to
negotiate MOUs with current and aspiring Visa Waiver Program countries to
help put the legislative provisions in place. Although DHS has not yet
signed MOUs with any current program countries, the department intends to
complete negotiations with existing program countries by October 2009. As
indicated in figure 1, DHS signed MOUs with aspiring countries before
conducting in-country security reviews. The MOUs are to be accompanied by
more specific "implementing arrangements" for sharing biographic,
biometric, and other data, as required by the 9/11 Act, within general
parameters of what the United States is willing and able to
reciprocate--this includes sharing information on known or suspected
terrorists. According to DHS, the type and scope of these arrangements
will vary by country and will take into account existing bilateral
information-sharing arrangements. As of June 2008, DHS had signed MOUs
with eight Road Map countries and had begun negotiations on the
implementing arrangements. However, State and Justice officials told us
that DHS had not been clear in communicating these steps to aspiring and
current program countries. DHS officials acknowledged that the department
was still exploring how to best complete the implementing arrangements.
U.S. embassy officials in several Road Map countries told us that it had
been difficult to explain the expansion process to their foreign
counterparts and manage their expectations about when those countries
might be admitted into the Visa Waiver Program. Justice officials and U.S.
officials in several embassies told us that the implementing arrangements
may be more difficult to negotiate than the nonbinding MOUs because some
countries have expressed concerns about sharing private information on
their citizens due to strict national privacy laws--concerns that the
United States also has about its citizens' information. In response to our
request, in late April 2008, DHS provided us with an outline of the
department's completed and remaining actions for expanding the Visa Waiver
Program by the end of this year. DHS officials stated that this outline
could be a first step in providing guidance for all stakeholders, should
the program be expanded again in the future. However, the outline does not
include criteria for selecting countries under consideration for admission
into the program, other than the 13 Road Map countries.

The U.S. government is only considering the Road Map countries for
potential admission into the program in 2008 because the United States
began formal discussions with these 13 countries several years ago, not
due to the application of clearly defined requirements. DHS is negotiating
with 4 Road Map countries with fiscal year 2007 refusal rates over 10
percent (Hungary, Latvia, Lithuania, and Slovakia), with the expectation
that fiscal year 2008 refusal rates for these countries will fall below 10
percent. State officials told us that they lacked a clear rationale to
explain to other aspiring, non-Road Map countries with refusal rates under
10 percent (Croatia, Israel, and Taiwan) that they will not be considered
in 2008 due to the executive branch's plans to expand the program first to
South Korea and countries in Central and Eastern Europe. In addition, on
May 1 of each year, State must report to Congress those countries that are
under consideration for inclusion in the Visa Waiver Program; the
department has never submitted this report because, according to consular
officials, no country has been under consideration for admission into the
program since the reporting requirement was established in 2000.^15 As of
late June 2008, State had not yet submitted its report for 2008. A State
official told us that, despite the actions that DHS, State, and other U.S.
agencies have taken to expand the Visa Waiver Program to as many as 9
countries in 2008, State was initially unclear about which countries it
should include in this report. While only Greece has been nominated, DHS
has made clear its goal to admit many of the Road Map countries in 2008.
(Fig. 2 shows the fiscal year 2007 refusal rates for the 13 Road Map
countries.)

^15State must report to the appropriate congressional committees on the
total number of nationals of that country who applied for U.S. visas in
that country during the previous calendar year; the total number of such
nationals who received U.S. visas during the previous calendar year; the
total number of such nationals who were refused U.S. visas during the
previous calendar year, and, specifically, under which provision of the
Immigration and Nationality Act they were refused; and the number of such
nationals who were refused visas under section 214(b)of the Immigration
and Nationality Act as a percentage of the visas that were issued to such
nationals. In addition, not later than May 1 of each year, the U.S. chief
of mission (acting or permanent) to each country under consideration for
inclusion in the Visa Waiver Program, must certify to the appropriate
congressional committees that the information described in the report is
accurate, and must provide a copy of the certification to the
congressional committees.

Figure 2: Short-term Business and Tourism Visa Refusal Rates, by Country,
Fiscal Year 2007

Note: DHS may consider adding to the Visa Waiver Program aspiring
countries with refusal rates below 3 percent in the prior fiscal year,
without meeting the two certification requirements in the 9/11 Act.

According to DHS, it could not wait until all statutory requirements were
officially met before beginning bilateral negotiations with Road Map
countries, because doing so would not allow sufficient time to add the
countries by the end of 2008. DHS plans to complete the security reviews
and sign MOUs and implementing arrangements with Road Map countries by the
fall of 2008. If these and all other statutory provisions are
completed--including countries' achievement of refusal rates below 10
percent--State indicated that it will then formally nominate the
countries. However, DHS has acknowledged that if it and the aspiring
countries cannot meet all of the program's statutory requirements, the
United States will not admit additional countries into the program. In
such an event, the U.S. government could face political and diplomatic
repercussions, given the expectations raised that many of the Road Map
countries will be admitted in 2008. DHS, State, and Justice officials
acknowledged that following a more transparent process would be useful in
the future as additional countries seek to join the program.

DHS Has Achieved Some Results in Visa Waiver Program Expansion Negotiations

DHS's expansion negotiations with current and aspiring Visa Waiver Program
countries have led to commitments from countries to improve information
sharing processes with the United States. For example, by signing MOUs,
eight aspiring countries have signaled their intent to comply with the
program's statutory provision to report to the United States or Interpol
in a timely manner the loss or theft of passports--a key vulnerability in
the Visa Waiver Program, as we have previously reported.^16 In addition,
as a result of ongoing visa waiver negotiations with the South Korean
government, in January 2008, DHS initiated the Immigration Advisory
Program at Incheon International Airport in South Korea to help prevent
terrorists and other high-risk travelers from boarding commercial aircraft
bound for the United States.^17 Furthermore, a senior consular official
testified that the executive branch's dialogue on Visa Waiver Program
expansion is helping to stimulate U.S. negotiations on other terrorist
watch-list- sharing arrangements with Road Map countries.^18

16 [27]GAO-06-854 .

^17According to CBP, the Immigration Advisory Program aims to enhance the
safety of air travel by, among other things, reducing the number of
improperly documented passengers traveling from or through a country to
the United States. As of August 2008, the program operates in airports in
Amsterdam, the Netherlands; Frankfurt, Germany; London, England (Heathrow
Airport and Gatwick Airport); Manchester, England; Madrid, Spain; Seoul,
South Korea; Tokyo, Japan; and Warsaw, Poland.

DHS Has Not Fully Developed Tools Aimed at Assessing and Mitigating Risks in the
Visa Waiver Program

As of early September 2008, DHS had not yet met two key certification
requirements in the 9/11 Act that are necessary to allow the department to
consider expanding the Visa Waiver Program to countries with refusal rates
between 3 percent and 10 percent. In addition, the Visa Waiver Program
Office does not fully consider data on overstay rates for current and
aspiring Visa Waiver Program countries, even though doing so is integral
to meeting a statutory requirement for continued eligibility in the Visa
Waiver Program. Finally, in reviewing recommendations from our 2006 report
aimed at improving efforts to assess and mitigate program risks, we found
that DHS has implemented many of our prior recommendations, but some are
only partially implemented.

DHS Has Not yet Implemented Key Security Provisions of 9/11 Act That Are
Necessary to Admit Certain Countries into the Visa Waiver Program

On February 28, 2008, we testified that DHS's plan for certifying that it
can verify the departure of 97 percent of foreign nationals from U.S.
airports will not help the department mitigate risks of the Visa Waiver
Program.^19 Furthermore, DHS will face a number of challenges in
implementing ESTA by January 2009. Finally, it is unlikely that DHS will
implement a biometric air exit system before July 2009, due to opposition
from the airline industry.

  Plan to Verify the Air Departure of Foreign Nationals Will Not Help DHS
  Mitigate Program Risks

As we have previously mentioned, the 9/11 Act requires that DHS certify
that a system is in place that can verify the departure of not less than
97 percent of foreign nationals who depart through U.S. airports. In
December 2007, DHS reported to us that it will match records, reported by
airlines,^20 of visitors departing the country to the department's
existing records of any prior arrivals, immigration status changes,^21 or
prior departures from the United States. At the time of our February 2008
testimony, DHS had confirmed that it planned to employ a methodology that
begins with departure records. During the hearing, we also testified that
this methodology will not demonstrate improvements in the air exit system
and will not help the department mitigate risks of the Visa Waiver
Program. We identified a number of weaknesses with this approach, as
follows:

^18Homeland Security Presidential Directive-6 required the Secretary of
State to develop a proposal for the President's approval for enhancing
cooperation with certain foreign governments--beginning with those
countries for which the United States has waived visa requirements--to
establish appropriate access to the participating governments' terrorism
screening information. State determined that the most effective way to
obtain this information was to seek bilateral agreements to share
information on a reciprocal basis. In May 2008, the Deputy Assistant
Secretary of State for Visa Services testified that State anticipates
completing these agreements with all of the Road Map countries by the end
of September 2008. See, The White House, Homeland Security Presidential
Directive/HSPD-6, Subject: Integration and Use of Screening Information
(Washington, D.C.: Sept. 16, 2003).

^19GAO, Visa Waiver Program: Limitations with Department of Homeland
Security's Plan to Verify Departure of Foreign Nationals, [28]GAO-08-458T
(Washington, D.C.: Feb. 28, 2008).

           o First, DHS's methodology will not inform overall or
           country-specific overstay rates, which are key factors in
           determining illegal immigration risks in the Visa Waiver Program.
           In particular, DHS's methodology does not begin with arrival
           records to determine if those foreign nationals departed or
           remained in the United States beyond their authorized periods of
           admission--useful data for oversight of the Visa Waiver Program
           and its expansion. As we previously testified, an alternate
           approach would be to track air arrivals from a given point in time
           and determine whether those foreign nationals have potentially
           overstayed.^22 Figure 3 compares DHS's plan to match visitor
           records using departure data as a starting point with a
           methodology that would use arrival data as a starting point.

           Figure 3: DHS's Current Plan to Meet Air Exit System Provision
           Omits Those Who Remain in the United States

           o Second, for purposes of this provision and Visa Waiver Program
           expansion, we do not see the value in verifying that a foreign
           national leaving the United States had also departed at a prior
           point in time^23--in other words, matching a new departure record
           back to a previous departure record from the country.^24 DHS's
           Assistant Secretary for Policy Development told us in January 2008
           that the department chose to include previous departures and
           changes of immigration status records because this method allowed
           the department to achieve a match rate of 97 percent or greater.

           o Third, DHS's methodology does not address the accuracy of
           airlines' transmissions of departure records, and DHS acknowledges
           that there are weaknesses in the departure data. Foreign nationals
           who enter the United States by air are inspected by DHS
           officers--a process that provides information that can be used to
           verify arrival manifest data--and, since 2004, DHS has implemented
           the US-VISIT program to collect biometric information on foreign
           nationals arriving in the United States.^25 However, the
           department has not completed the exit portion of this tracking
           system; thus, there is no corresponding check on the accuracy and
           completeness of the departure manifest information supplied by the
           airlines.^26 According to DHS, it works with air carriers to try
           to improve both the timeliness and comprehensiveness of manifest
           records, and fines carriers that provide incomplete or inaccurate
           information. If DHS could evaluate these data, and validate the
           extent to which they are accurate and complete, the department
           would be able to identify problems and work with the airlines to
           further improve the data.

           An air exit system that facilitates the development of overstay
           rate data is important to managing potential risks in expanding
           the Visa Waiver Program. We found that DHS's planned methodology
           for meeting the "97 percent provision" so it can move forward with
           program expansion will not demonstrate improvements in the air
           exit system or help the department identify overstays or develop
           overstay rates. As of early September 2008, DHS had not yet
           certified this provision, nor had it finalized a methodology to
           meet the provision.

           In June 2008, DHS announced in the Federal Register that it
           anticipates that all visa waiver travelers will be required to
           obtain ESTA authorization for visa waiver travel to the United
           States after January 12, 2009. However, we identified four
           potential challenges that DHS may face in implementing ESTA,
           including a limited time frame to adequately inform U.S. embassies
           and the public and the significant impact that ESTA will have on
           the airline and travel industry.

           We have previously reported that visa waiver travelers pose
           inherent security and illegal immigration risks to the United
           States, since they (1) are not subject to the same degree of
           screening as travelers with visas and (2) are not interviewed by a
           consular officer before arriving at a U.S. port of entry.^27 In
           the 9/11 Act conference report,^28 Congress agreed on the need for
           significant security enhancements to the Visa Waiver Program and
           to the implementation of ESTA prior to permitting DHS to admit new
           countries into the program with refusal rates between 3 percent
           and 10 percent. According to DHS, ESTA will allow DHS to identify
           potential ineligible visa waiver travelers before they embark on a
           U.S.-bound carrier. DHS also stated that by recommending that
           travelers submit ESTA applications 72 hours in advance of their
           departure, CBP will have additional time to screen visa waiver
           travelers destined for the United States.

           DHS must follow several steps in implementing ESTA (see fig. 4).
           First, the 9/11 Act requires that DHS must certify both the 97
           percent air exit system and ESTA as fully operational before the
           department can consider expanding the Visa Waiver Program to
           countries with refusal rates between 3 percent and 10 percent. DHS
           has not announced when it plans to make this certification. DHS
           attorneys told us that the department could admit additional
           countries to the program once it provides this certification. In
           addition, according to DHS, the act provides that 60 days after
           the Secretary of Homeland Security publishes a final notice in the
           Federal Register of the ESTA requirement, each alien traveling
           under the Visa Waiver Program must use ESTA to electronically
           provide DHS with biographic and other such information as DHS
           deems necessary to determine, in advance of travel, the
           eligibility of, and whether there exists a law enforcement or
           security risk in permitting, the alien to travel to the United
           States.^29 DHS stated that it expects to issue this final notice
           in early November 2008, and, as of January 12, 2009, all visa
           waiver travelers would be required to obtain authorization through
           ESTA prior to boarding a U.S.-bound flight or cruise vessel. DHS
           stated that if, after certifying ESTA as fully operational, it
           admits an additional country prior to January 12, 2009, it will
           require that visa waiver travelers from that country obtain ESTA
           authorizations immediately. For example, if Estonia were admitted
           into the Visa Waiver Program on October 10, 2008, citizens of that
           country traveling to the United States under the program would be
           required to begin using ESTA on that date; however, visa waiver
           travelers from existing program countries would not be required to
           obtain approval through ESTA until January 12, 2009, more than 3
           months later.

^20Air carriers transmit visitor manifest information, which is obtained
directly from government-issued passports, to CBP through the Advanced
Passenger Information System. This system includes arrival and departure
manifest information, such as name, date of birth, travel document issuing
country, gender, U.S. destination address, entry date, and departure date.
As of February 19, 2008, commercial carriers are required to transmit
manifest information to be vetted by DHS prior to departure of the
aircraft.

^21This includes changes and extensions of the visits of lawfully
admitted, nonimmigrant foreign nationals.

^22This could include foreign nationals who departed after their
authorized period of admission expired, as well as those foreign nationals
who may have remained in the country as overstays.

^23According to ICE officials at DHS, this type of information provides a
more complete history of an alien and is useful for law enforcement
purposes, such as criminal prosecution and documenting activities.

^24A DHS official told us that the system functions by matching the
departure record with an alien's "account," which may contain numerous
prior arrivals, departures, and immigration benefit transaction records.
The official also stated that a specific departure record match may not
fall chronologically in the alien's account after an arrival; it may fall,
for example, after a record that an immigrant benefit was granted to
extend the alien's stay for an additional 6 months.

^25DHS's US-VISIT program collects, maintains, and shares data, including
biometric identifiers like digital fingerprints, on selected foreign
nationals entering the United States to verify their identities as they
arrive at U.S. air, sea, and land ports of entry. DHS currently operates
the entry portion of the US-VISIT program at more than 300 U.S. air, sea,
and land ports of entry. When fully implemented, US-VISIT is also intended
to capture the same information from foreign nationals as they depart the
country. The program aims to, among other things, identify foreign
nationals who have overstayed or violated the terms of their visit.

^26DHS has not implemented long-standing GAO recommendations to collect
departure information and make new estimates of overstays by air. See GAO,
Illegal Immigration: INS Overstay Estimation Methods Need Improvement,
[29]GAO/PEMD-95-20 (Washington, D.C.: Sept. 26, 1995); and Illegal Aliens:
Despite Data Limitations, Current Methods Provide Better Population
Estimates, [30]GAO/PEMD-93-25 (Washington, D.C.: Aug. 3, 1993).

  DHS's Planned Implementation of ESTA by January 2009 Will Face Challenges

^27 [31]GAO-06-854 .

^28Conference Report on H.R. 1, Implementing Recommendations of the 9/11
Commission Act of 2007 (July 25, 2007).

^29DHS attorneys stated that the department also hopes to certify ESTA as
fully operational in early November. In addition, as we have previously
mentioned, to consider admitting countries into the program with refusal
rates between 3 percent and 10 percent, DHS must also certify that the air
exit system is in place.

Figure 4: DHS's Anticipated ESTA Implementation Timeline

We identified four potential challenges to DHS's planned implementation of
ESTA by January 12, 2009. It is difficult to predict the extent to which
DHS will address these challenges due to the short time frame in which the
department is implementing the system. These challenges include the
following:

           o DHS has a limited time frame to adequately inform U.S. embassies
           in Visa Waiver Program countries and the public about ESTA. U.S.
           embassy officials in current and aspiring Visa Waiver Program
           countries told us that the United States will need to ensure that
           there is sufficient time to inform travelers, airlines, and the
           travel industry of ESTA requirements and implementation timelines.
           U.S. commercial and consular officials at a U.S. embassy in a
           current Visa Waiver Program country told us that they would
           ideally like 1 year's advance notice before ESTA is implemented to
           allow sufficient time to inform and train the public and the
           travel industry of the new requirement. However, DHS's
           announcement in June 2008 accelerated the timeline for ESTA
           implementation in current visa waiver countries. During our site
           visits in March 2008, U.S. embassy officials in a visa waiver
           country told us that they had been informed by DHS officials that
           the department did not plan to require ESTA authorization for
           travelers from that country until the summer of 2009 or later.
           According to a senior U.S. official at one embassy, DHS had
           confirmed this plan with host country government officials in
           early May 2008. Following the June 2008 announcement, a senior
           U.S. embassy official in another country told us that DHS did not
           give the embassy adequate advance notice--to prepare translated
           materials, brief journalists from the major media, prepare the
           embassy Web site, or set up a meeting with travel and tourism
           professionals to discuss the implications of ESTA
           requirements--before publishing the interim final rule. DHS
           officials told us that the department is currently working on an
           outreach strategy to ensure that travelers are aware of the ESTA
           requirement.

           o Impact on air and sea carriers could be significant. DHS
           estimates that 8 U.S.-based air carriers and 11 sea carriers, as
           well as 35 foreign-based air carriers and 5 sea carriers, will be
           affected by ESTA requirements for visa waiver travelers. In
           addition, DHS stated that it did not know how many passengers
           annually would request that their carrier apply for ESTA
           authorization on their behalf to travel under the Visa Waiver
           Program or how much it will cost carriers to modify their existing
           systems to accommodate such requests. Thus, in the short term, DHS
           expects that the carriers could face a notable burden if most of
           their non-U.S. passengers request that their carriers submit ESTA
           applications. On the basis of DHS's analysis, ESTA could cost the
           carriers about $137 million to $1.1 billion over the next 10
           years, depending on how the carriers decide to assist the
           passengers. DHS has noted that these costs to carriers are not
           compulsory because the carriers are not required to apply for an
           ESTA authorization on behalf of their visa waiver travelers. DHS
           is developing a separate system, independent from ESTA, which will
           enable the travel industry to voluntarily submit an ESTA
           application on behalf of a potential Visa Waiver Program traveler.
           As of early August 2008, DHS had analyzed the role that
           transportation carriers could play in applying for and submitting
           ESTA applications on behalf of their customers when they arrive at
           an air or sea port. However, CBP stated that there had been no
           further development on this issue.

           o ESTA could increase consular workload. In May 2008, we reported
           that State officials and officials at U.S. embassies in current
           Visa Waiver Program countries are concerned with how ESTA
           implementation will affect consular workload.^30 Consular officers
           are concerned that more travelers will apply for visas at consular
           posts if their ESTA applications are rejected or because they may
           choose to apply for a visa that has a longer validity period (10
           years) than an ESTA authorization. We reported that if 1 percent
           to 3 percent of current Visa Waiver Program travelers came to U.S.
           embassies for visas, it could greatly increase visa demand at some
           locations, which could significantly disrupt visa operations and
           possibly overwhelm current staffing and facilities.^31 DHS
           officials told us that the department is aware of concerns
           regarding rejection rates and has been working with State to
           create a system that mitigates these concerns.

           o Developing a user-friendly ESTA could be difficult. According to
           DHS, the ESTA Web site will initially be operational in English;
           additional languages will be available by October 15, 2008. Even
           when the Web site is operational in additional languages, ESTA
           will only allow travelers to fill out the application in English,
           as with CBP's paper-based form. In addition, during our site
           visits, embassy officials expressed concerns that some Visa Waiver
           Program travelers do not have Internet access and, thus, will face
           difficulties in submitting their information to ESTA.^32
           Implementing a user-friendly ESTA is essential, especially for
           those travelers who do not have Internet access or are not
           familiar with submitting forms online.

           A third provision of the 9/11 Act requires that DHS implement a
           biometric air exit system before July 1, 2009, or else the
           department's authority to waive the 3 percent refusal rate
           requirement--and thereby consider admitting countries with refusal
           rates between 3 percent and 10 percent--will be suspended until
           this system is in place. In March 2008, DHS testified that
           US-VISIT will begin deploying biometric exit procedures in fiscal
           year 2009. DHS released a proposed rule for the biometric exit
           system in April 2008, and the department plans to issue a final
           rule before the end of 2008. According to the proposed rule, air
           and sea carriers are to collect, store, and transmit to DHS
           travelers' biometrics. During the public comment period on the
           proposed rule, airlines, Members of Congress, and other
           stakeholders have raised concerns about DHS's proposal, and
           resolving these concerns could take considerable time. For
           example, the airline industry strongly opposes DHS's plans to
           require airline personnel to collect digital fingerprints of
           travelers departing the United States because it believes it is a
           public sector function. We have issued a series of reports on the
           US-VISIT program indicating that there is no clear schedule for
           implementation of the exit portion of the system, and that DHS
           will encounter difficulties in implementing the system by July
           2009.^33 Although DHS program officials stated that DHS is on
           track to implement the biometric exit system by July 2009, it is
           unlikely that DHS will meet this timeline. We are currently
           reviewing DHS's proposed rule and plan to report later this year
           on our findings.

           Some DHS components have expanded efforts to identify citizens who
           enter the United States under the Visa Waiver Program and then
           overstay their authorized period of admission. In 2004, US-VISIT
           established the Data Integrity Group, which develops data on
           potential overstays by comparing foreign nationals' arrival
           records with departure records from U.S. airports and sea ports.
           US-VISIT provides data on potential overstays to ICE, CBP, and
           U.S. Citizenship and Immigration Services, as well as to State's
           consular officers to aid in visa adjudication. For example,
           US-VISIT sends regular reports to ICE's Compliance Enforcement
           Unit on potential overstays, and ICE officials told us they use
           these data regularly during investigations. In fiscal year 2007,
           ICE's Compliance Enforcement Unit received more than 12,300
           overstay leads from the Data Integrity Group.^34 As an example of
           one of these leads, on November 27, 2007, ICE agents in Ventura,
           California, arrested and processed for removal from the United
           States an Irish citizen whose term of admission expired in
           September 2006. On the basis of concerns that Visa Waiver Program
           travelers could be overstaying, ICE has requested that US-VISIT
           place additional emphasis on identifying potential overstays from
           program countries. In turn, ICE has received funding to establish
           a Visa Waiver Enforcement Program within the Compliance
           Enforcement Unit to investigate the additional leads from
           US-VISIT. As part of this funding, ICE plans to hire 46 additional
           employees to help the unit increase its focus on identifying
           individuals who traveled to the United States under the Visa
           Waiver Program and potentially overstayed.

           However, DHS is not fully monitoring compliance with a legislative
           provision that requires a disqualification rate (this calculation
           includes overstays) of less than 3.5 percent for a country to
           participate in the Visa Waiver Program.^35 Monitoring these data
           is a long-standing statutory requirement for the program. We have
           testified that the inability of the U.S. government to track the
           status of visitors in the country, identify those who overstay
           their authorized period of visit, and use these data to compute
           overstay rates has been a long-standing weakness in the oversight
           of the Visa Waiver Program.^36 DHS's Visa Waiver Program Office
           reported that it does not monitor country overstay rates as part
           of its mandated, biennial assessment process for current visa
           waiver countries because of weaknesses in US-VISIT's data.^37

           Since 2004, however, the Data Integrity Group has worked to
           improve the accuracy of US-VISIT's overstay data and can undertake
           additional analyses to further validate these data. For example,
           using available resources, the group conducts analyses, by hand,
           of computer-generated overstay records to determine whether
           individuals identified as overstays by the computer matches are
           indeed overstays. In addition, US-VISIT analysts can search up to
           12 additional law enforcement and immigration databases to verify
           whether a potential overstay may, in fact, be in the country
           illegally. While it receives periodic reporting on potential
           overstays from US-VISIT, the Visa Waiver Program Office has not
           requested that the Data Integrity Group provide validated overstay
           rate estimates from visa waiver or Road Map countries since 2005.
           Although DHS has not designated an office with the responsibility
           of developing such data for the purposes of the Visa Waiver
           Program, US-VISIT officials told us that, with the appropriate
           resources, they could provide more reliable overstay data and
           estimated rates, by country, to the Visa Waiver Program Office,
           with support from other DHS components, such as the Office of
           Immigration Statistics. For example, the Visa Waiver Program
           Office could request additional analysis for countries where the
           preliminary, computer-generated overstay rates raised concerns
           about illegal immigration risks in the program. These resulting
           estimates would be substantially more accurate than the
           computer-generated overstay rates. However, the resulting
           estimates would not include data on departures at land ports of
           entry. In addition, as we have previously mentioned, airline
           departure data have weaknesses.^38 DHS has asserted that overstay
           data will continue to improve with the implementation of the
           biometric US-VISIT exit program.

           In addition to US-VISIT, State's overseas consular sections
           develop data on overstay rates that might be useful for assessing
           potential illegal immigration risks of the Visa Waiver Program.
           Specifically, some consular sections have conducted validation
           studies to determine what percentage of visa holders travel to the
           United States and potentially overstay. For example, at the U.S.
           embassy in Estonia, consular officials conducted a validation
           study in the summer of 2006 that concluded that 2.0 percent to 2.7
           percent of Estonian visa holders traveling to the United States in
           2005 had potentially overstayed.^39 US-VISIT overstay data, after
           appropriate analysis and in conjunction with other available data,
           such as validation studies, would provide DHS with key information
           to help evaluate the illegal immigration risks of maintaining a
           country's membership or admitting additional countries into the
           Visa Waiver Program.

           In July 2006, we reported that the process for assessing and
           mitigating risks in the Visa Waiver Program had weaknesses, and
           that DHS was not equipped with sufficient resources to effectively
           monitor the program's risks.^40 For example, at the time of our
           report, DHS had only two full-time staff charged with monitoring
           countries' compliance with the program's requirements and working
           with countries seeking to join the program. We identified several
           problems with the process by which DHS was monitoring countries'
           adherence to the program requirements, including a lack of
           consultation with key interagency stakeholders. In addition, we
           reported that DHS needed to improve its communication with
           officials at U.S. embassies so it could communicate directly with
           officials best positioned to monitor compliance with the program's
           requirements, and report on current events and issues of potential
           concern in each of the participating countries. Also, at the time
           of our 2006 report, the law required the timely reporting of
           passport thefts for continued participation in the Visa Waiver
           Program, but DHS had not established or communicated these time
           frames and operating procedures to participating countries. In
           addition, DHS had not yet issued guidance on what information must
           be shared, with whom, and within what time frame.

           To address these weaknesses, we recommended that DHS take a number
           of actions to better assess and mitigate risks in the Visa Waiver
           Program. As we note in table 1, DHS has taken actions to implement
           some of our recommendations, but still needs to fully implement
           others. In particular, DHS has provided the Visa Waiver Program
           Office with additional resources since our 2006 report. As of
           April 2008, the office had five additional full-time employees,
           and two other staff from the Office of Policy that devote at least
           50 percent of their time to Visa Waiver Program tasks. In
           addition, staff from several other DHS components assists the
           office on a regular basis, as well as during the in-country
           security assessments for Road Map and current program countries.
           In response to our recommendation to finalize clear, consistent,
           and transparent protocols for the biennial country assessment, the
           Visa Waiver Program Office drafted standard operating procedures
           in November 2007 for conducting reviews of nominated and
           participating visa waiver countries. In addition, DHS now provides
           relevant stakeholders with copies of the most current mandated,
           biennial country assessments; during our visits in early 2008,
           U.S. embassy officials confirmed that the assessments are now
           accessible. Furthermore, regarding our recommendation to develop
           and communicate clear, standard operating procedures for the
           reporting of lost and stolen blank and issued passports, DHS
           established criteria for the reporting of lost and stolen passport
           data--including a definition of "timely reporting" and an
           explanation of to whom in the U.S. government countries should
           report--as part of the MOUs it is negotiating with participating
           and Road Map countries.

^30GAO, Border Security: State Department Should Plan for Potentially
Significant Staffing and Facilities Shortfalls Caused by Changes in the
Visa Waiver Program, [32]GAO-08-623 (Washington, D.C.: May 22, 2008).

  Implementation of Biometric Air Exit System before July 2009 Will Be Difficult

^31As of May 2008, DHS had provided State with preliminary data that
suggest how many names might be rejected by ESTA, on the basis of
rejection rates from CBP's Advance Passenger Information System; however,
we found that DHS had not developed any estimates of the number of people
who would choose to proactively apply for visas rather than submit an
application to ESTA. According to consular officials, the percentage of
travelers who choose to obtain a visa could exceed potential ESTA
rejection rates of 1 percent to 3 percent. See [33]GAO-08-623 .

^32According to DHS, ESTA is designed to allow third parties to file
applications on behalf of other persons.

DHS Does Not Fully Consider Overstay Rates to Assess the Illegal Immigration
Risks of the Visa Waiver Program

^33GAO, Homeland Security: Prospects For Biometric US-VISIT Exit
Capability Remain Unclear, [34]GAO-07-1044T (Washington, D.C.: June 28,
2007); Border Security: US-VISIT Program Faces Strategic, Operational, and
Technological Challenges at Land Ports of Entry, [35]GAO-07-248
(Washington, D.C.: Dec. 6, 2006).

^34In June 2003, ICE's Office of Investigations established the Compliance
Enforcement Unit, which focuses on preventing criminals and terrorists
from exploiting the nation's immigration system by developing cases for
investigation on the basis of information provided from other DHS
components, including US-VISIT.

^35The disqualification rate is the total for a given fiscal year of (1)
those nationals of the country who were admitted as nonimmigrants and
violated the terms of their admission--this would include overstays--and
(2) the number of foreign nationals who were denied admission upon arrival
in the United States, compared with the total number of nationals of that
country who applied for admission as nonimmigrant visitors during the same
period. According to the visa waiver statute, the country must be
terminated at the beginning of the 2d fiscal year following the fiscal
year in which the determination of the disqualification rate was made. See
8 U.S.C. S 1187(f).

^36For more than 10 years, we have recommended the collection of departure
information and the development of estimates of overstays by air. See
[36]GAO/PEMD-93-25 and [37]GAO/PEMD-95-20 .

^37According to DHS officials, the mandated country assessments include a
placeholder for data on overstay rates, but these data are not included in
the 2003-2004 or 2005-2006 assessments. The May 2002 Enhanced Border
Security and Visa Entry Reform Act increased the frequency--from once
every 5 years to once every 2 years--of mandated assessments of the effect
of each country's continued participation in the Visa Waiver Program on
U.S. security, law enforcement, and immigration interests. See Pub. L. No.
107-173.

^38Due to limitations in DHS's data, U.S. VISIT officials also noted that
some individuals who appear in DHS's systems as being in-country legally
may actually be overstays, and that country-specific information is not
available for about 2 percent of records.

^39Validation studies are traditionally conducted over the telephone, with
the embassy contacting nationals who traveled to the United States.
According to a State consular official, 200 posts have access to DHS's
Automated Departure Information System database. This database contains
records of foreign nationals' arrival and departure data received from air
and sea carrier manifests. DHS's data will assist embassies in conducting
validation studies and may preclude the need for telephone calls to
foreign nationals, while also improving the accuracy of departure data
assessed for these studies. Access to these records will allow consular
posts to more accurately determine whether a foreign national departed the
United States.

DHS Has Implemented Many of GAO's Prior Recommendations Aimed at Improving
Efforts to Assess and Mitigate Risks in the Visa Waiver Program

^40 [38]GAO-06-854 .

Table 1: Status of Prior GAO Recommendations

                                                       Partially              
Recommendation                     Not implemented implemented Implemented 
Provide additional resources to                                     X      
strengthen the Visa Waiver Program                                         
Office.                                                                    
Finalize clear, consistent, and                                     X      
transparent protocols for the                                              
biennial country assessments and                                           
provide these protocols to                                                 
stakeholders at relevant agencies                                          
at headquarters and overseas.                                              
These protocols should provide                                             
timelines for the entire                                                   
assessment process, including the                                          
role of a site visit, an                                                   
explanation of the clearance                                               
process, and deadlines for                                                 
completion.                                                                
Create real-time monitoring                             X                  
arrangements, including the                                                
identification of visa-waiver                                              
points of contact at U.S.                                                  
embassies, for all 27                                                      
participating countries; and                                               
establish protocols, in                                                    
coordination with the appropriate                                          
headquarters offices, for direct                                           
communication between points of                                            
contact at overseas posts and                                              
DHS's Visa Waiver Program Office.                                          
Require periodic updates from                           X                  
points of contact at posts in                                              
countries where there are law                                              
enforcement or security concerns                                           
relevant to the Visa Waiver                                                
Program.                                                                   
Provide complete copies of the                                      X      
most recent country assessments to                                         
relevant stakeholders in                                                   
headquarters and overseas posts.                                           
Require that all Visa Waiver                            X                  
Program countries provide the                                              
United States and Interpol with                                            
nonbiographical data from lost or                                          
stolen blank and issued passports.                                         
Develop and communicate clear                                       X      
standard operating procedures for                                          
the reporting of lost and stolen                                           
blank and issued passports,                                                
including a definition of "timely                                          
reporting" and to whom in the U.S.                                         
government countries should                                                
report.                                                                    
Develop and implement a plan to                                     X      
make Interpol's stolen travel                                              
document database automatically                                            
available during primary                                                   
inspection at U.S. ports of entry.                                         

Sources: GAO analysis of DHS data and GAO, Border Security: Stronger
Actions Needed to Assess  and Mitigate Risks of the Visa Waiver Program,
[39]GAO-06-854 (Washington, D.C.: July 28, 2006).

Furthermore, DHS, in coordination with the U.S. National Central Bureau,
has initiated a system that allows DHS to screen foreign nationals
arriving at all U.S. international airports against Interpol's database of
lost and stolen travel documents before the foreign nationals arrive in
the country. Results to date indicate that the system identifies two to
three instances of fraudulent passports per month. According to the
National Central Bureau, Interpol's database has intercepted passports
that were not identified by DHS's other screening systems. For example, on
February 18, 2008, the Interpol database identified a Nigerian national
traveling on a counterfeited British passport who attempted to enter the
United States at Newark International Airport. Upon arrival, the
individual was referred to secondary inspection and determined to be
inadmissible to the United States.

While DHS has taken action on many of our recommendations, it has not
fully implemented others. We recommended that DHS require that all Visa
Waiver Program countries provide the United States and Interpol with
nonbiographical data from lost or stolen blank and issued passports.
According to DHS, all current and aspiring visa waiver countries report
lost and stolen passport information to Interpol, and many report such
information to the United States. The 9/11 Act requires agreements between
the United States and Visa Waiver Program countries on the reporting of
lost and stolen passports within strict time limits; however, none of the
current visa waiver countries have yet to formally establish lost and
stolen passport reporting agreements by signing MOUs with DHS. DHS also
still needs to fully implement our recommendations to create real-time
monitoring arrangements, establish protocols for direct communication with
contacts at overseas posts, and require periodic updates from these
contacts. For example, while the Visa Waiver Program Office has recently
begun communicating and disseminating relevant program information
regularly with U.S. embassy points of contact at Visa Waiver Program
posts, officials at some of the posts we visited in early 2008 reported
that they had little contact with the office and were not regularly
informed of security concerns or developments surrounding the program.

Conclusions

The executive branch is moving aggressively to expand the Visa Waiver
Program in 2008 to allies in Central and Eastern Europe and South Korea,
after the countries have met certain requirements and DHS has completed
and certified key security requirements in the 9/11 Act. However, DHS has
not followed a transparent process for expanding the program, thereby
causing confusion among other U.S. agencies and embassies overseas. The
lack of a clear process could bring about political repercussions if
countries are not admitted to the program in 2008, as expected. In
addition, DHS is not fully assessing a critical illegal immigration risk
of the Visa Waiver Program and its expansion since it does not consider
overstay data in its security assessments of current and aspiring
countries. DHS should determine what additional data and refinements of
that data are necessary to ensure that it can assess and mitigate this
potential risk to the United States. Finally, DHS still needs to take
actions to fully implement our prior recommendations in light of plans to
expand the program.

Recommendations for Executive Action

To improve management of the Visa Waiver Program and better assess and
mitigate risks associated with it, we are recommending that the Secretary
of Homeland Security take the following four actions:

           o establish a clear process, in coordination with the Departments
           of State and Justice, for program expansion that would include the
           criteria used to determine which countries will be considered for
           expansion and timelines for nominating countries, security
           assessments of aspiring countries, and negotiation of any
           bilateral agreements to implement the program's legislative
           requirements;

           o designate an office with responsibility for developing overstay
           rate information for the purposes of monitoring countries'
           compliance with the statutory requirements of the Visa Waiver
           Program;

           o direct that established office and other appropriate DHS
           components to explore cost-effective actions necessary to further
           improve, validate, and test the reliability of overstay data; and

           o direct the Visa Waiver Program Office to request an updated,
           validated study of estimated overstay rates for current and
           aspiring Visa Waiver Program countries, and determine the extent
           to which additional research and validation of these data are
           required to help evaluate whether particular countries pose a
           potential illegal immigration risk to the United States.

           We provided a draft of this report to DHS, State, and Justice for
           review and comment. DHS provided written comments, which are
           reproduced in appendix IV, and technical comments, which we
           incorporated into the report, as appropriate. Justice also
           provided written comments, which are reprinted in appendix V.
           State did not provide comments on the draft report.

           DHS either agreed with, or stated that it was taking steps to
           implement, all of our recommendations. For example, DHS indicated
           that it is working with State to create procedures so that future
           Visa Waiver Program candidate countries are selected and
           designated in as transparent and uniform a manner as possible. In
           addition, DHS noted that it is taking steps to improve the
           accuracy and reliability of the department's overstay data. DHS
           also provided additional details about its continued outreach
           efforts to the department's interagency partners and foreign
           counterparts on the expansion process for the Visa Waiver Program.
           Justice did not comment on our recommendations, but provided
           additional information about the importance of monitoring
           countries' reporting of lost and stolen passport data to Interpol.
           In addition, Justice discussed its efforts, in collaboration with
           DHS, to include screening against Interpol's lost and stolen
           passport database as part of ESTA. Justice noted that use of
           Interpol's database continues to demonstrate significant results
           in preventing the misuse of passports to fraudulently enter the
           United States.

           We are sending copies of this report to interested congressional
           committees, the Secretaries of Homeland Security and State, and
           the U.S. Attorney General. Copies of this report will be made
           available to others upon request. In addition, this report is
           available at no charge on the GAO Web site at http://www.gao.gov.

           If you or your staffs have any questions about this report, please
           contact Jess T. Ford, Director, International Affairs and Trade,
           at (202) 512-4128 or [email protected]. Contact points for our Offices
           of Congressional Relations and Public Affairs may be found on the
           last page of this report. Key contributors to this report are
           listed in appendix VI.

           Jess T. Ford Director, International Affairs and Trade

           To describe the process that the Department of Homeland Security
           (DHS) is following to admit countries into the Visa Waiver
           Program, we reviewed laws governing the program and its expansion,
           and relevant regulations and agency operating procedures, as well
           as our prior reports and testimonies. In particular, we reviewed
           DHS's standard operating procedures for oversight and expansion of
           the Visa Waiver Program. We spoke with officials from the Visa
           Waiver Program Office, which is responsible for oversight of Visa
           Waiver Program requirements, as well as representatives from the
           Department of State's (State) Consular Affairs, Europe and
           Eurasia, and East Asia and Pacific Bureaus. In addition, we
           visited U.S. embassies in three current visa waiver
           countries--France, Japan, and the United Kingdom--whose nationals
           comprise a large percentage annually of visa waiver travelers to
           the United States. We also visited U.S. embassies in four
           countries--Czech Republic, Estonia, Greece, and South Korea--with
           which DHS is negotiating visa waiver status. During these visits,
           we interviewed political, economic, consular, commercial, and law
           enforcement officials regarding oversight of the Visa Waiver
           Program and its expansion. We also conducted telephone interviews
           with consular officials in four additional countries--Hungary,
           Latvia, Lithuania, and Slovakia--that DHS also aims to admit into
           the Visa Waiver Program in 2008. We did not interview officials in
           Bulgaria, Poland, or Romania because DHS told us that it does not
           anticipate that these countries will be admitted into the program
           in 2008. We did not interview officials in Malta because of the
           country's relatively small number of annual Visa Waiver Program
           travelers to the United States.

           To assess actions taken to mitigate potential risks in the Visa
           Waiver Program, we focused on DHS's efforts to implement the new
           security enhancements required by the 9/11 Act, as well as the
           recommendations from our July 2006 report.^1 First, to review the
           department's plans for air exit system implementation, we
           collected and analyzed documentation and interviewed officials
           from DHS's Office of Policy, Customs and Border Protection (CBP),
           and the U.S. Visitor and Immigrant Status and Indicator Technology
           (US-VISIT) Program Office. We also reviewed prior GAO reports on
           immigrant and visitor entry and exit tracking systems.

           Second, to analyze plans for the implementation of the Electronic
           System for Travel Authorization (ESTA), we collected and analyzed
           documentation and interviewed officials from DHS's Offices of
           Policy, Screening Coordination, and General Counsel, as well as
           CBP officials who are implementing the Web-based program. In
           addition, to understand DHS's legal position regarding the
           statutory requirements for ESTA implementation, on May 5, 2008, we
           requested, in writing, DHS's legal position on certain ESTA
           statutory requirements, which the department provided to us on
           June 6, 2008.

           Third, regarding DHS's efforts to monitor citizens who enter the
           United States under the Visa Waiver Program and then overstay
           their authorized period of admission (referred to as "overstays"),
           we assessed the reliability of the US-VISIT data on potential
           overstays, which are based on air and sea carriers' arrival and
           departure data. We reviewed documentation and interviewed
           cognizant U.S. VISIT officials about how data on potential
           overstays are generated and validated. As we have previously
           mentioned, we determined that data on potential overstays that are
           generated automatically by US-VISIT's systems have major
           limitations; however, many of these limitations could be overcome
           by a series of manual checks and validations that US-VISIT can
           perform, upon request.

           Fourth, to determine the status of our prior recommendations to
           DHS on oversight of the Visa Waiver Program, we developed a scale
           to classify them as (1) implemented, (2) partially implemented, or
           (3) not implemented. We collected and analyzed documentation and
           interviewed officials from DHS's Visa Waiver Program Office on the
           actions that office has taken since July 2006 to respond to our
           recommendations. In addition, we met with International Criminal
           Police Organization (Interpol) officials in Lyon, France, as well
           as officials from the Department of Justice's Interpol-U.S.
           National Central Bureau to discuss the status of DHS's access to
           Interpol's database of lost and stolen travel documents. We
           concluded that a recommendation was (1) "implemented," if the
           evidence indicated that DHS had taken a series of actions
           addressing the recommendation; (2) "partially implemented," if the
           evidence indicated that DHS had taken some action toward
           implementation; and (3) "not implemented," if the evidence
           indicated that DHS had not taken any action.

           We conducted this performance audit from September 2007 to
           September 2008 in accordance with generally accepted government
           auditing standards. Those standards require that we plan and
           perform the audit to obtain sufficient, appropriate evidence to
           provide a reasonable basis for our findings and conclusions based
           on our audit objectives. We believe that the evidence obtained
           provides a reasonable basis for our findings and conclusions based
           on our audit objectives.

           The Visa Waiver Program nonimmigrant visa refusal rate is based on
           the number of visitor visa applications submitted, worldwide, by
           nationals of that country. Visitor visas are issued for short-term
           business or pleasure travel to the United States. The adjusted
           refusal rate is calculated by first subtracting from the number of
           visas that were initially refused (referred to as "refusals"), the
           number of visas that were subsequently issued after further
           administrative consideration (referred to as "overcomes")--or, in
           short, refusals minus overcomes (see table 2). This resulting
           number is then divided by the number of visa issuances plus
           refusals minus overcomes--that is, refusals minus overcomes
           divided by issuances plus refusals minus overcomes. Adjusted visa
           refusal rates for nationals of Visa Waiver Program countries
           reflect only visa applications submitted at U.S. embassies and
           consulates abroad. These rates do not take into account persons
           who, under the Visa Waiver Program, travel to the United States
           without visas. Visa Waiver Program country refusal rates,
           therefore, tend to be higher than they would be if the Visa Waiver
           Program travelers were included in the calculation, since such
           travelers in all likelihood would have been issued visas had they
           applied, according to State. We are presenting these data to show
           that the countries under consideration for Visa Waiver Program
           admission do not all have refusal rates of less than 10 percent;
           we did not assess the reliability of these data.

           Table 2: Worldwide Refusal Rates for Short-term Business and
           Tourism Visas, Fiscal Year 2007

           Source: Department of State.

           ^aIncludes applications for both B visas and combination
           B-1/B-2/Mexican Border Crossing Cards.

           The Immigration Reform and Control Act of 1986 created the Visa
           Waiver Program as a pilot program.^1 In 2000, the program became
           permanent under the Visa Waiver Permanent Program Act.^2 In 2002,
           we reported on the legislative requirements to which countries
           must adhere before they are eligible for inclusion in the Visa
           Waiver Program.^3 In general, the requirements are as follows:

           o A low nonimmigrant visa refusal rate. To qualify for visa waiver
           status, a country must maintain a refusal rate of less than 3
           percent for its citizens who apply for business and tourism visas.
           If DHS certifies that it has met certain requirements under the
           9/11 Act, it will have the authority to waive the 3 percent
           refusal rate requirement--currently up to a maximum of 10
           percent--provided that the country meets other security
           requirements.

           o A machine-readable passport program. The country must certify
           that it issues machine-readable passports to its citizens. As of
           June 26, 2005, all travelers are required to have a
           machine-readable passport to enter the United States under this
           program.

           o Reciprocity. The country must offer visa-free travel for U.S.
           citizens.

           Persons entering the United States under the Visa Waiver Program
           must

           o have a valid passport issued by the participating country and be
           a national of that country;^4

           o be seeking entry for 90 days or less as a temporary visitor for
           business or tourism;

           o have been determined by CBP at the U.S. port of entry to
           represent no threat to the welfare, health, safety, or security of
           the United States;
           o have complied with conditions of any previous admission under
           the program (e.g., individuals must have stayed in the United
           States for 90 days or less during prior visa waiver visits);

           o if entering by air or sea, possess a round-trip transportation
           ticket issued by a carrier that has signed an agreement with the
           U.S. government to participate in the program, and must have
           arrived in the United States aboard such a carrier; and

           o if entering by land, have proof of financial solvency and a
           domicile abroad to which they intend to return.

           Following are GAO's comments on the Department of Homeland
           Security's letter dated August 27, 2008.

           Jess T. Ford, (202) 512-4128, or [email protected]

           In addition to the individual named above, John Brummet, Assistant
           Director; Teresa Abruzzo; Kathryn Bernet; Joseph Carney; Martin de
           Alteriis; Etana Finkler; Eric Larson; and Mary Moutsos made key
           contributions to this report.

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                        1. We disagree that the department followed a
                        transparent process for expansion of the program. As
                        we state in our report, State and Justice officials
                        told us that the lack of a transparent timeline and
                        requirements for Visa Waiver Program expansion has
                        led to confusion among U.S. agencies in headquarters'
                        offices and at U.S. embassies overseas, as well as
                        foreign governments seeking to join the program.
                        Moreover, absent clear direction from DHS, U.S.
                        embassy officials in several aspiring countries told
                        us that it had been difficult to explain the
                        expansion process to their foreign counterparts and
                        manage their expectations about when those countries
                        might be admitted into the Visa Waiver Program.
                        Therefore, we recommend in this report that DHS
                        establish a clear process, in coordination with State
                        and Justice, for program expansion. DHS noted that it
                        is currently working to create procedures so that
                        future candidate countries are selected and
                        designated in as transparent and uniform a manner as
                        possible and expectations are appropriately managed
                        during the process.
                        2. Aside from the 13 Road Map countries identified in
                        2005, State officials told us that they lacked a
                        clear rationale to explain to other aspiring,
                        non-Road Map countries with refusal rates under 10
                        percent (Croatia, Israel, and Taiwan) that they will
                        not be considered in 2008 due to the executive
                        branch's plans to expand the program first to South
                        Korea and countries in Central and Eastern Europe.
                        DHS noted that it is currently working to create
                        procedures so that future candidate countries are
                        selected and designated in as transparent and uniform
                        a manner as possible and expectations are
                        appropriately managed during the process.
                        3. We have updated the report to indicate that ESTA
                        began accepting voluntary applications from visa
                        waiver travelers on August 1, 2008. However, DHS does
                        not anticipate that ESTA authorizations will be
                        mandatory for visa waiver travelers until after
                        January 12, 2009. As we state in our report, and as
                        DHS noted, the department has not yet certified that
                        it can verify the departure of not less than 97
                        percent of foreign nationals exiting U.S. airports,
                        or that an Electronic System for Travel Authorization
                        (ESTA) for screening visa waiver travelers in advance
                        of their travel is "fully operational." Moreover, DHS
                        has not yet implemented a biometric air exit system
                        at U.S. airports. Thus, DHS has not yet fully
                        developed the tools to assess and mitigate risks in
                        the Visa Waiver Program.
                        4. In July 2006, we reported that DHS needed to
                        improve its communication with officials at U.S.
                        embassies so it could communicate directly with
                        officials best positioned to monitor compliance with
                        the program's requirements, and report on current
                        events and issues of potential concern in each of the
                        participating countries. Therefore, we recommended
                        that DHS establish points of contact at U.S.
                        embassies and develop protocols to ensure that the
                        Visa Waiver Program Office receives periodic updates
                        in countries where there are security concerns. As we
                        note in this report, the Visa Waiver Program Office
                        has recently begun communicating and disseminating
                        relevant program information regularly with U.S.
                        embassy officials at Visa Waiver Program posts.
                        However, despite our requests during the course of
                        this review--and again following our receipt of DHS's
                        formal comments on the draft of this report--the
                        department has not provided us with sufficient
                        documentation to demonstrate that it has established
                        points of contact at U.S. embassies for all 27
                        participating countries or established protocols for
                        communications between these contacts and the Visa
                        Waiver Program Office. Furthermore, the department
                        has not provided us with documentation to demonstrate
                        that established points of contact are reporting
                        periodically to the Visa Waiver Program Office.
                        Therefore, we cannot conclude that these 2006
                        recommendations are fully implemented.
                        5. DHS noted that it has not yet signed memorandums
                        of understanding (MOU) with any of the 27 current
                        Visa Waiver Program countries. Because the MOUs will
                        commit all signatories to report to Interpol or
                        otherwise make available to the United States
                        information about lost and stolen blank and issued
                        passports, this recommendation will remain open until
                        all MOUs are finalized.
                        6. To verify the departure of not less than 97
                        percent of foreign nationals exiting U.S. airports,
                        DHS reported to us in December 2007 that it will
                        match records, reported by airlines, of visitors
                        departing the country with the department's existing
                        records of any prior arrivals, immigration status
                        changes, or prior departures from the United States.
                        In January 2008, the Assistant Secretary for Policy
                        Development made this statement, which corroborated
                        data that we received from US-VISIT in late October
                        2007. At the time of our February 2008 testimony,^1
                        DHS confirmed to us that it planned to employ a
                        methodology that begins with departure records;
                        however, as DHS indicated in its written comments on
                        a draft of this report, it has still not decided on a
                        final methodology. DHS has not provided us with
                        information on any other options that it might be
                        considering to meet this provision. Furthermore, the
                        department has not explained how and when it intends
                        to validate these data.

Agency Comments and Our Evaluation

Appendix I: Objectives, Scope, and Methodology Appendix I: Objectives,
Scope, and Methodology

^1GAO, Border Security: Stronger Actions Needed to Assess and Mitigate
Risks of the Visa Waiver Program, [46]GAO-06-854 (Washington, D.C.: July
28, 2006).

Appendix II: Worldwide Refusal Rates for Short-term Business and Tourism
Visas, Fiscal Year 2007 Appendix II: Worldwide Refusal Rates for
Short-term Business and Tourism Visas, Fiscal Year 2007

Country                                 Adjusted refusal rate 
Afghanistan                                               38% 
Albania                                                    50 
Algeria                                                    23 
Andorra                                                     9 
Angola                                                     13 
Antigua and Barbuda                                        15 
Argentina                                                   4 
Armenia                                                    61 
Australia                                                  17 
Austria                                                    16 
Azerbaijan                                                 15 
Bahrain                                                     2 
Bangladesh                                                 50 
Barbados                                                    6 
Belarus                                                    26 
Belgium                                                    13 
Belize                                                     27 
Benin                                                      37 
Bhutan                                                     44 
Bolivia                                                    29 
Bosnia-Herzegovina                                         19 
Botswana                                                   16 
Brazil                                                     10 
Brunei                                                      2 
Bulgaria                                                   14 
Burkina Faso                                               43 
Burma                                                      50 
Burundi                                                    56 
Cambodia                                                   53 
Cameroon                                                   43 
Canada                                                     37 
Cape Verde                                                 40 
Central African Republic                                   29 
Chad                                                       29 
Chile                                                       7 
China - Mainland                                           21 
China - Taiwan                                              5 
Colombia                                                   29 
Comoros                                                    25 
Congo (Brazzaville)                                        32 
Congo (Kinshasa)                                           35 
Costa Rica                                                 22 
Cote D`Ivoire                                              46 
Croatia                                                     5 
Cuba                                                       53 
Cyprus                                                      2 
Czech Republic                                              7 
Denmark                                                    11 
Djibouti                                                   22 
Dominica                                                   29 
Dominican Republic                                         41 
Ecuador                                                    28 
Egypt                                                      34 
El Salvador                                                50 
Equatorial Guinea                                          24 
Eritrea                                                    49 
Estonia                                                     4 
Ethiopia                                                   46 
Federated States of Micronesia                              0 
Fiji                                                       33 
Finland                                                    16 
France                                                      8 
Gabon                                                      23 
Georgia                                                    55 
Germany                                                    10 
Ghana                                                      55 
Great Britain and Northern Ireland                         21 
Greece                                                      2 
Grenada                                                    27 
Guatemala                                                  54 
Guinea                                                     58 
Guinea - Bissau                                            55 
Guyana                                                     62 
Haiti                                                      44 
Honduras                                                   38 
Hong Kong (BNO HK passport)                                 2 
Hong Kong S. A. R.                                          3 
Hungary                                                    10 
Iceland                                                     9 
India                                                      22 
Indonesia                                                  40 
Iran                                                       45 
Iraq                                                       45 
Ireland                                                    24 
Israel                                                      3 
Italy                                                       7 
Jamaica                                                    38 
Japan                                                      12 
Jordan                                                     39 
Kazakhstan                                                 12 
Kenya                                                      34 
Kiribati                                                   20 
Kuwait                                                      4 
Kyrgyzstan                                                 30 
Laos                                                       73 
Latvia                                                     12 
Lebanon                                                    25 
Lesotho                                                    40 
Liberia                                                    51 
Libya                                                      25 
Liechtenstein                                               7 
Lithuania                                                  13 
Luxembourg                                                  6 
Macau S.A.R.                                               10 
Macedonia                                                  36 
Madagascar                                                 14 
Malawi                                                     37 
Malaysia                                                    8 
Maldives                                                   22 
Mali                                                       56 
Malta                                                       3 
Mauritania                                                 59 
Mauritius                                                  13 
Mexicoa                                                    33 
Moldova                                                    36 
Monaco                                                     38 
Mongolia                                                   61 
Morocco                                                    24 
Mozambique                                                 18 
Namibia                                                     5 
Nauru                                                       0 
Nepal                                                      55 
Netherlands                                                12 
New Zealand                                                 8 
Nicaragua                                                  46 
Niger                                                      53 
Nigeria                                                    32 
Norway                                                      9 
Oman                                                        4 
Pakistan                                                   40 
Palestinian Authority                                      56 
Panama                                                     26 
Papua New Guinea                                           12 
Paraguay                                                   18 
Peoples Republic of Korea - North Korea                    14 
Peru                                                       44 
Philippines                                                32 
Poland                                                     25 
Portugal                                                    8 
Qatar                                                       2 
Republic of Palau                                           0 
Republic of the Marshall Islands                            3 
Romania                                                    38 
Russia                                                     12 
Rwanda                                                     47 
Samoa                                                      29 
San Marino                                                 40 
Sao Tome and Principe                                      10 
Saudi Arabia                                                6 
Senegal                                                    61 
Serbia                                                     64 
Serbia and Montenegro                                      23 
Seychelles                                                 19 
Sierra Leone                                               43 
Singapore                                                   9 
Slovakia                                                   12 
Slovenia                                                    7 
Solomon Islands                                             5 
Somalia                                                    52 
South Africa                                                6 
South Korea                                                 4 
Spain                                                       7 
Sri Lanka                                                  28 
St. Kitts and Nevis                                        21 
St. Lucia                                                  27 
St. Vincent and The Grenadines                             23 
Sudan                                                      34 
Suriname                                                   11 
Swaziland                                                  19 
Sweden                                                      8 
Switzerland                                                 7 
Syria                                                      36 
Tajikistan                                                 30 
Tanzania                                                   21 
Thailand                                                   17 
The Bahamas                                                 5 
The Gambia                                                 57 
Timor-Leste                                                 0 
Togo                                                       48 
Tonga                                                      45 
Trinidad and Tobago                                        20 
Tunisia                                                    24 
Turkey                                                     15 
Turkmenistan                                               49 
Tuvalu                                                     12 
Uganda                                                     43 
Ukraine                                                    38 
United Arab Emirates                                        5 
Unknown place of birth or stateless                        42 
Uruguay                                                    12 
Uzbekistan                                                 71 
Vanuatu                                                    25 
Vatican City                                                0 
Venezuela                                                  19 
Vietnam                                                    36 
Yemen                                                      64 
Zambia                                                     46 
Zimbabwe                                                   32 

Appendix III: Key Legislative Requirements for Inclusion in the Visa
Waiver Program Appendix III: Key Legislative Requirements for Inclusion in
the Visa Waiver Program

^1Pub. L. No. 99-603.

^2Pub. L. No. 106-396.

^3GAO, Border Security: Implications of Eliminating the Visa Waiver
Program, [47]GAO-03-38 (Washington, D.C.: Nov. 22, 2002).

^4All passports issued to visa waiver travelers after October 26, 2006,
must be electronic. Travelers with passports issued after the deadline
that do not meet these requirements must obtain a visa from a U.S. embassy
or consulate overseas before departing for the United States.

Appendix IV: Comments from the Department of Homeland Security Appendix
IV: Comments from the Department of Homeland Security

Note: GAO comments supplementing those in the report text appear at the
end of this appendix.

See comment 1.

See comment 3.

See comment 2.

See comment 6.

See comment 5.

See comment 4.

GAO Comments

^1GAO, Visa Waiver Program: Limitations with Department of Homeland
Security's Plan to Verify Departure of Foreign Nationals, [48]GAO-08-458T
(Washington, D.C.: Feb. 28, 2008).

Appendix V: Comments from the Department of Justice Appendix V: Comments
from the Department of Justice

Appendix VI: A Appendix VI: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

(320540)

GAO's Mission

Obtaining Copies of GAO Reports and Testimony

Order by Mail or Phone

To Report Fraud, Waste, and Abuse in Federal Programs

Congressional Relations

Public Affairs

To view the full product, including the scope

and methodology, click on [49]GAO-08-967 .

For more information, contact Jess T. Ford at (202) 512-4128 or
[email protected].

Highlights of [50]GAO-08-967 , a report to congressional requesters

September 2008

VISA WAIVER PROGRAM

Actions Are Needed to Improve Management of the Expansion Process, and to
Assess and Mitigate Program Risks

The Visa Waiver Program, which enables citizens of participating countries
to travel to the United States without first obtaining a visa, has many
benefits, but it also has risks. In 2006, GAO found that the Department of
Homeland Security (DHS) needed to improve efforts to assess and mitigate
these risks. In August 2007, Congress passed the 9/11 Act, which provides
DHS with the authority to consider expanding the program to countries
whose short-term business and tourism visa refusal rates were between 3
and 10 percent in the prior fiscal year. Countries must also meet certain
conditions, and DHS must complete actions to enhance the program's
security. GAO has examined DHS's process for expanding the Visa Waiver
Program and evaluated the extent to which DHS is assessing and mitigating
program risks. GAO reviewed relevant laws and procedures and interviewed
agency officials in Washington, D.C., and in U.S. embassies in eight
aspiring and three Visa Waiver Program countries.

[51]What GAO Recommends

GAO recommends that DHS establish a transparent process for Visa Waiver
Program expansion, and improve and monitor overstay rates for current and
aspiring program countries. DHS generally agreed with GAO's
recommendations. The Department of Justice (Justice) noted the importance
of lost and stolen passport reporting, but did not comment on the
recommendations.

The executive branch is moving aggressively to expand the Visa Waiver
Program by the end of 2008, but, in doing so, DHS has not followed a
transparent process. DHS did not follow its own November 2007 standard
operating procedures, which set forth key milestones to be met before
countries are admitted into the program. As a result, Departments of State
(State) and Justice and U.S. embassy officials stated that DHS created
confusion among interagency partners and aspiring program countries. U.S.
embassy officials in several aspiring countries told us it had been
difficult to explain the expansion process to foreign counterparts and
manage their expectations. State officials said it was also difficult to
explain to countries with fiscal year 2007 refusal rates below 10 percent
that have signaled interest in joining the program (Croatia, Israel, and
Taiwan) why DHS is not negotiating with them, given that DHS is
negotiating with several countries that had refusal rates above 10 percent
(Hungary, Latvia, Lithuania, and Slovakia). Despite this confusion, DHS
achieved some security enhancements during the expansion negotiations,
including agreements with several aspiring countries on lost and stolen
passport reporting. DHS, State, and Justice agreed that a more transparent
process is needed to guide future program expansion.

DHS has not fully developed tools to assess and mitigate risks in the Visa
Waiver Program. To designate new program countries with refusal rates
between 3 and 10 percent, DHS must first make two certifications. First,
DHS must certify that it can verify the departure of not less than 97
percent of foreign nationals who exit from U.S. airports. In February
2008, we testified that DHS's plan to meet this provision will not help
mitigate program risks because it does not account for data on those who
remain in the country beyond their authorized period of stay (overstays).
DHS has not yet finalized its methodology for meeting this provision.
Second, DHS must certify that the Electronic System for Travel
Authorization (ESTA) for screening visa waiver travelers in advance of
their travel is "fully operational." While DHS has not announced when it
plans to make this certification, it anticipates ESTA authorizations will
be required for all visa waiver travelers after January 12, 2009. DHS
determined that the law permits it to expand the program to countries with
refusal rates between 3 and 10 percent after it makes these two
certifications, and after the countries have met the required conditions,
but before ESTA is mandatory for all Visa Waiver Program travelers. For
DHS to maintain its authority to admit certain countries into the program,
it must incorporate biometric indicators (such as fingerprints) into the
air exit system by July 1, 2009. However, DHS is unlikely to meet this
timeline due to several unresolved issues.In addition, DHS does not fully
consider countries' overstay rates when assessing illegal immigration
risks in the Visa Waiver Program. Finally, DHS has implemented many
recommendations from GAO's 2006 report, including screening U.S.-bound
travelers against Interpol's lost and stolen passport database, but has
not fully implemented others. Implementing the remaining recommendations
is important as DHS moves to expand both the program and the department's
oversight responsibilities.

References

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