U.S. Customs Service: OR&R Needs to Resolve Timeliness and Data Problems
Involving Headquarters Rulings (Letter Report, 09/07/2000,
GAO/GGD-00-181).

Pursuant to a congressional request, GAO examined the timeliness with
which the Customs Service Office of Regulations and Rulings (OR&R)
issues rulings on such things as the proper classification and valuation
of imported goods focusing on: (1) OR&R's response time for issuing
headquarters rulings on imported goods, and, if delays occurred, reasons
why they occurred; and (2) whether the Legal Case Inventory System
(LCIS) is an effective tool for measuring the timeliness of OR&R's
headquarters rulings.

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

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-00-181
     TITLE:  U.S. Customs Service: OR&R Needs to Resolve Timeliness and
	     Data Problems Involving Headquarters Rulings
      DATE:  09/07/2000
   SUBJECT:  Performance measures
	     Customs administration
	     Import regulation
	     International trade
	     Management information systems
IDENTIFIER:  Customs Service Legal Case Inventory System

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GAO/GGD-00-181

U. S. CUSTOMS SERVICE

OR& R Needs to Resolve Timeliness and Data Problems Involving Headquarters
Rulings

United States General Accounting Office

GAO Report to the Chairman Subcommittee on Trade

Committee on Ways and Means House of Representatives

September 2000 GAO/ GGD- 00- 181

United States General Accounting Office General Government Division
Washington, D. C. 20548

Page 1 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

B- 284784 September 7, 2000 The Honorable Philip M. Crane Chairman,
Subcommittee on Trade Committee on Ways and Means House of Representatives

Dear Mr. Chairman: This letter responds to your request that we examine the
timeliness with which the U. S. Customs Service Office of Regulations and
Rulings (OR& R) issues rulings on such things as the proper classification
and valuation of imported goods. OR& R issues rulings to advise importers of
Customs regulations and assist importers in making marketing and pricing
decisions. In March 1997, we testified before your Subcommittee that OR& R
(1) had not met its timeliness requirements as established in a 1989
directive on classification rulings; (2) was not aware of whether it had met
its timeliness requirement because it was not using its automated database-
the Legal Case Inventory System (LCIS)- to control the timeliness of
rulings, and (3) had not consistently applied its own guidance for measuring
timeliness, thereby rendering LCIS data inaccurate. We also testified that
delayed rulings regarding such things as the proper classification of goods
can negatively affect importers, particularly those importing seasonal
goods, holiday items, or merchandise subject to fashion trends and fads. 1
In fiscal year 1999, the value of goods entering the United States was over
$977 billion.

For this report, our objectives were to (1) determine OR& R's response time
for issuing headquarters rulings on imported goods and, if delays occurred,
reasons why they occurred, and (2) examine whether LCIS is an effective tool
for measuring the timeliness of OR& R's headquarters rulings. As agreed with
your office, we focused on prospective rulings–- those requested by an
importer on goods that are proposed for entry into U. S. markets- that were
(1) completed by OR& R's headquarters office in Washington, D. C., and (2)
opened and closed by OR& R between January 1, 1997, and October 26, 1999,
covering the classification, valuation, marking,

1 U. S. Customs Service: Office of Regulations and Rulings Has Yet to
Establish Performance Measures (GAO/ T- NSIAD- 97- 115, Mar. 7, 1997).

B- 284784 Page 2 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

and drawbacks of imported goods. 2 Although OR& R processes most of its
rulings in its New York office, our work focused on the more complicated
headquarters rulings that are expected to take longer than 30 days to
complete.

OR& R headquarters did not issue the majority of its prospective rulings in
a timely manner. Our review of a random sample of 70 hard- copy case files
representing approximately 610 rulings showed that about two- thirds of the
rulings that were requested and issued between January 1, 1997, and October
26, 1999, were not completed within OR& R's 120- day benchmark for those
rulings. We estimated that about 16 percent of the rulings took longer than
365 days to process and issue. Available records and discussions with OR& R
officials did not always enable us to determine why OR& R's turnaround time
exceeded 120 days, but some rulings may have taken longer to issue than the
benchmark time frame because (1) OR& R sent the product to a laboratory for
analysis or obtained additional information or (2) the request was not
properly handled by OR& R or the requesting importer. OR& R acknowledged
problems with the timeliness of headquarters rulings, and attributed many of
these problems to staffing shortages and competing workload demands.

Although OR& R uses LCIS to track the progress of its prospective rulings,
LCIS is not an effective tool for measuring the timeliness of headquarters
rulings because it does not contain accurate and reliable data. Our
comparison of data from the hard- copy case files with data on those files
in LCIS showed that most of the cases had missing or incorrect data in LCIS.
We were not always able to determine why LCIS data were inaccurate, but
factors that affected accuracy included data entry errors and differences in
the way OR& R staff interpreted guidance for data entry and used the system
to track cases. In the past, OR& R has acknowledged problems with LCIS and,
in May 1998, redesigned the system and revised system guidance. However,
problems with LCIS continue because, in addition to the previously cited
factors, users cannot readily distinguish between different types of cases,
such as prospective rulings and internal advice memorandums, among other
problems.

This report contains recommendations to the Assistant Commissioner, OR& R,
regarding actions needed to address problems with LCIS data and

2 Classification rulings involve the classification of goods within the U.
S. Harmonized Tariff Schedule; valuation rulings involve the valuation of
goods; rulings on marking are those concerning country of origin issues,
including the clarity of the marking of goods so that buyers can find out
where products are made; and drawback rulings are those involving refunds on
duties of imported merchandise when they are subsequently exported. Results
in Brief

B- 284784 Page 3 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

improve OR& R's performance. In commenting on a draft of this report,
Customs officials discussed actions they intend to take to implement each of
our recommendations. While most of the actions proposed by Customs appear to
be steps in the right direction, they may not fully resolve the timeliness
and data problems addressed in this report.

The U. S. Customs Service is a key agency for enforcing the nation's trade
laws and policies, including collecting duties on imported merchandise. OR&
R plays an important role in carrying out Customs' trade mission by
providing legal and technical support for payment of duties to Customs
officers at the ports and at headquarters, and guidance to the trade
community on Customs regulations and related laws.

OR& R carries out its principal mission by (1) drafting regulations
implementing U. S. trade laws; (2) issuing rulings on the proper
classification, valuation, and marking of imported goods in response to
requests from importers and others; and (3) providing guidance to the trade
community and other Customs units on their compliance duties under Customs
regulations and related laws. OR& R informs the trade community through
various mechanisms, including rulings, that establish the duty an importer
will pay. 3 These rulings advise importers on how they can stay in
compliance with Customs laws and help them make marketing and pricing
decisions by providing information on the cost of importing their goods. For
example, OR& R's prospective classification rulings give both the requesting
importer and importers of similar goods vital information to help them
determine the amounts of the duties and fees they will be charged when they
eventually enter their merchandise at a port. Customs established a Web site
to disseminate information on completed rulings to the trade community, and
Customs officers at any port will accept the merchandise under the
classification contained in the ruling. Importers can use duty information
to help decide whether to import a new line of merchandise.

Under the Customs Modernization and Informed Compliance Act of 1993 (title
VI of P. L. 103- 182), responsibility was shifted from Customs to importers
for ensuring that shipments are in compliance with Customs' classification,
duty, and reporting requirements. 4 Because of this additional
responsibility, importers are relying more than ever on OR& R's

3 According to OR& R, it also informs the trade community through compliance
publications, a valuation encyclopedia, and an Internet Web site. 4 Informed
compliance attempts to maximize importers' voluntary compliance with Customs
laws and regulations by keeping them clearly and completely informed of
their legal obligations. Background

B- 284784 Page 4 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

rulings and educational activities. Under the act, importers are expected to
use reasonable care to enter, classify, and value imported merchandise and
submit any information necessary for Customs to properly assess duties.

OR& R is headed by an Assistant Commissioner and has offices in Washington,
D. C., and New York. Its staff of about 250 consists mainly of attorneys and
specialists in commodity classification. ORR has about 125 staff at
headquarters, about 86 of whom, as of October 1999, were attorneys. 5 OR& R
also has about 125 staff in the New York Office, approximately 100 of whom
were national import specialists, often called commodity specialists by OR&
R. For fiscal year 1999, out of Customs' total budget of about $2 billion,
OR& R's budget was almost $20 million. OR& R issued about 12,600 rulings in
fiscal year 1999, most of which were relatively routine classification cases
that, according to OR& R officials, usually take 30 days or less to process
out of its New York office. OR& R's headquarters office in Washington, D.
C., processes more complicated cases that are expected to take longer than
30 days to complete. Headquarters issued 1,260 rulings for fiscal year 1999,
including those that (1) provided advice to internal customers, such as
Customs ports- of- entry; (2) reconsidered or revoked existing rulings; and
(3) were requested by external customers, such as importers. As mentioned
earlier, our review focused on the latter category- rulings requested by
importers. (See appendix I for additional information.)

OR& R uses its automated database, LCIS, to internally track cases,
including rulings, pending before OR& R. According to OR& R's LCIS user
guide, the system was designed as a management tool and was to serve as the
principal means for recording and monitoring the progress and history of
individual cases. According to an OR& R official, LCIS was first introduced
as a prototype in 1977, and became OR& R's principal case tracking system in
1983. The system has been updated several times, including one upgrade in
1987, during which new data fields and new categories of codes were added,
and another in 1998, during which LCIS was modified to track staffs' non-
case time, such as that devoted to training and responding to Freedom of
Information Act (FOIA) requests, as well as drafting regulations. Although
LCIS was originally intended as an internal database, since 1998, OR& R has
used it for additional purposes, such as for providing information to the
Department of Treasury and

5 According to OR& R, the number of headquarters attorneys was 80 as of
August 2000. In its comments, the Customs Service stated that the rulings
discussed in this report are processed by approximately 40 attorneys in 4
branch offices at headquarters. LCIS and Ruling Timeliness

B- 284784 Page 5 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

Congress, as well as providing information on completed rulings to the trade
community on Customs' Web site.

A 1989 Customs directive entitled Expansion of the Binding Classification
Rulings Program states that LCIS will be the backbone for controlling the
timeliness of rulings. This directive, which applied solely to
classification rulings, stated that, among other things, rulings that were
referred to OR& R headquarters- that is, those that were deemed the most
complex and sensitive- were to be issued within 120 days of the date of
receipt by the Customs Service. The directive went on to say that a ruling
may be delayed for only one of two reasons- a laboratory analysis is
required, or OR& R needs to consult with others.

Although OR& R does not have a directive concerning the other types of
rulings headquarters processes, it does maintain the 120- day benchmark
extended to all rulings. In fact, OR& R uses the 120- day benchmark when it
communicates with importers about rulings they have requested. Specifically,
when OR& R attorneys receive a request for a ruling, they can use a form
letter to tell importers that they will make every endeavor to complete
their review and prepare a response within 120 days of receipt.

To meet our objectives, we did our work at OR& R's headquarters in
Washington, D. C. As agreed with your office, we focused on prospective
rulings–- those requested by an importer on goods that are proposed
for entry into U. S. markets- that were (1) completed by OR& R's
headquarters office in Washington, D. C., and (2) opened and closed by OR& R
between January 1, 1997, and October 26, 1999, covering the classification,
valuation, marking, and drawbacks of imported goods.

To determine OR& R's response time to requesters' rulings processed by OR& R
headquarters, we conducted a hard- copy file review of a random sample of
192 rulings opened and closed between January 1, 1997, and October 26, 1999.
6 The 192 rulings represented a population of 1, 650 cases that were opened
and closed, and entered into LCIS, during this period. Of these 192 cases,
70 were requests by importers for prospective rulings on classification,
valuation, marking, or drawback issues. These 70 cases represented about 610
prospective rulings that were opened and closed

6 We conducted some preliminary analysis of LCIS, but we resorted to a hard-
copy file review because the system did not distinguish between cases
involving importers' requests for prospective rulings and other types of
cases. Scope and

Methodology

B- 284784 Page 6 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

during the period. 7 Because hard- copy files did not always contain the
date OR& R received the importer's request- the date OR& R is supposed to
use to measure against its 120- day benchmark- we used the date of the
requester's letter to OR& R as our base line for measuring timeliness. Based
on the data that were available in the files, we estimated that the
difference between when the importer dated the letter and when it was
received by OR& R was, on average, 5.5 days. 8 This difference does not
materially affect our results.

To assess whether LCIS is an effective tool for measuring the timeliness of
OR& R's headquarters rulings, we compared data from the hard- copy case
files with data about those cases that had been entered into LCIS. Customs
supervisors verified all data we collected from the file review and answered
questions about any discrepancies we found between the hardcopy file review
and LCIS data. In addition, we interviewed OR& R officials, including OR&
R's Special Assistant to the Assistant Commissioner; the Director,
Operational Oversight; the LCIS Systems Administrator; and OR& R
supervisors. Appendix I discusses our objectives, scope, and methodology in
greater detail and provides information about our sampling. We did our audit
work between August 1999 and July 2000 in accordance with generally accepted
government auditing standards.

We requested comments on a draft of this report from the Customs Service.
Customs' comments are discussed near the end of this letter and are
reprinted as appendix II. Customs also provided technical comments that were
incorporated in the report.

OR& R headquarters did not issue the majority of prospective rulings in a
timely manner. Our review of a random sample of 70 hard- copy case files,
representing approximately 610 rulings showed that about two- thirds of the
rulings that were requested and issued between January 1, 1997, and October
26, 1999, were not completed within OR& R's 120- day benchmark for those
rulings. We estimated that about 16 percent of the rulings took longer than
365 days to process and issue.

7 Because our estimate of the number of prospective rulings is based on a
sample, the number is subject to sampling error. In this instance, the
estimate of 610 prospective rulings is surrounded by a 95 percent confidence
interval that extends from about 504 to 716 rulings.

8 The estimate of 5. 5 days is based on 66 of the sampled 70 rulings for
which both dates were available. This estimate is surrounded by a 95 percent
confidence interval that extends from 3. 8 to 7. 2 days. OR& R Headquarters

Did Not Issue the Majority of Prospective Rulings Within Its Timeliness Goal

B- 284784 Page 7 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

Table 1 shows our estimates of the time it took to complete the estimated
610 cases from the date of the letter requesting the ruling to the time OR&
R issued its ruling. Approximately one- third of the rulings were issued
within OR& R's goal for timeliness of 120 days or less. Approximately one-
third took between 121 days and 199 days to process, and about one- third
were completed in 200 days or more.

Number of days in process a Percentage

120 days or less 33% 121- 199 days 31 200- 365 days 20 366 days or more 16

Total 100%

a Our analysis covers time from the date of the importer's letter to the
date OR& R issued the ruling. We used the date of the importer's letter
because OR& R files were not always clear as to when the letter was received
by OR& R. Based on our analysis of available data in case files and
discussions with OR& R staff, we estimated that the average delay between
when the letter was sent by the importer and when it was received by OR& R
was about 5. 5 days. This difference does not materially affect our results.
The estimate of 5. 5 days is based on 66 of the sampled 70 rulings for which
both dates were available. This estimate is surrounded by a 95 percent
confidence interval that extends from 3. 8 to 7. 2 days.

The estimates of percentages in this table are based on a random sample of
70 prospective rulings and are subject to sampling error. The 95 percent
confidence intervals for the estimates vary but are not greater than 12
percentage points higher or 11 percentage points lower than the estimate.

Source: GAO analysis of a random sample of 70 OR& R case files representing
about 610 cases.

OR& R's case files did not always indicate why OR& R took more than 120 days
to process importers' requests for prospective rulings. However, we
estimated that, in about 36 percent of the cases that exceeded the 120- day
benchmark, OR& R either had to send the product to a laboratory for analysis
or needed to consult with others, such as the importer or the importer's
attorneys, before it could issue the ruling. We noted that, in some of these
cases, the delay did not seem to be influenced by the need to send the
product to a laboratory or to gather additional information. For example, an
importer requested that OR& R issue a ruling about the proper classification
of white paper. About 7 weeks later, OR& R received the results of a sample
of the paper that had undergone a laboratory test. OR& R issued the ruling
294 days after the importer wrote the request, and 243 days after it
received the results of the lab test.

In other cases, it appeared that the laboratory analysis or information
gathering could have influenced the delay. For example:

ï¿½ An importer requested a ruling on the proper classification of women's
shoes. About 5 months later, OR& R received additional information necessary
for the issuance of the ruling from the importer's attorney.

Table 1: Estimate of the Timeliness of Prospective Ruling Cases Opened and
Closed Between January 1, 1997, and October 26, 1999

B- 284784 Page 8 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

OR& R issued the ruling 181 days after the importer wrote the request
letter, and 29 days after the additional information was received.

ï¿½ Another importer requested a ruling on the proper classification of
Hanukkah lights. About 5 months later, OR& R obtained additional information
to complete the ruling. OR& R issued the ruling 175 days after the request
letter was written, and 6 days after the additional information was
received.

We also noted that some rulings were not timely because of delays on the
part of OR& R and/ or the importer. For example:

ï¿½ In one instance, an importer's original request was sent to OR& R's New
York Office. Once it was determined that OR& R headquarters should handle
the request, New York did not send it to OR& R headquarters in a timely
manner. Rather than within the required 30 days, the request was sent 5
months later. The ruling was issued 199 days after the request letter was
written.

ï¿½ In another instance, an importer wrote Customs to apologize for his delay
in not getting back to Customs with information needed to complete the
ruling. The importer sent OR& R the information approximately 11 months
after he wrote the request for the ruling. The ruling was issued 366 days
after the request was written, and 32 days after OR& R received the
additional information necessary to issue the ruling.

The Special Assistant to the Assistant Commissioner of OR& R and the
Director, Operational Oversight, told us that two key factors- limited
staffing resources and competing work priorities- contributed to OR& R's
inability to issue headquarters rulings in a timely fashion. With regard to
limited staffing resources, they said that OR& R has had problems hiring and
retaining attorneys in its headquarters office because many attorneys are
recruited by private- sector firms offering higher salaries than those in
the federal government. As of October 1999, 86 attorneys were assigned to
OR& R headquarters. By June 2000, 14 attorneys had left OR& R, and 6
replacements had been hired.

With regard to competing workload demands, OR& R officials told us that the
organization has had to adjust to changes in OR& R responsibilities. As a
result, more and more of the time that used to be devoted to developing
rulings is now being devoted to other tasks and responsibilities. They said
that, whereas OR& R attorneys used to focus most of their efforts on
rulings, as of fiscal year 1999, they spent less than half of their time on
them. In fact, an OR& R report for fiscal year 1999 showed that 55 percent
of OR& R attorneys' time is spent on other activities, such as providing OR&
R Officials Attributed

Timeliness Problems to Limited Staffing and Competing Work Priorities

B- 284784 Page 9 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

guidance and training to its internal and external customers and drafting
regulations. For example, OR& R attorneys provided field and headquarters
support on such matters as penalties, intellectual property, and FOIA
requests. They also assisted the United Nations, the State Department, and
the World Trade Organization in developing international agreements and
training foreign customs officers, prepared educational pamphlets on
informed compliance, provided numerous educational seminars and panels, and
created educational videos for importers and U. S. and foreign customs
officers.

OR& R has acknowledged that it has had problems in processing headquarters
rulings in a timely manner. In a written response to questions from the
Senate Finance Committee dated May 13, 1999, OR& R stated that it was proud
that it was able to complete the bulk of its rulings- those to be processed
in 30 days by its New York office- in a timely fashion. However, OR& R said
that its goal to process headquarters rulings in 120 days was frequently not
met. OR& R acknowledged that improvements in timeliness would be desirable,
but stated that timeliness problems were the result of the aforementioned
staffing problems and competing work priorities.

OR& R's acknowledgment of a timeliness problem has done little to stem the
concerns of the trade community. In January 2000, the Subcommittee on OR& R
of the Commercial Operations Advisory Committee (COAC), a private sector
group composed of those affected by Customs' operations, issued a report on
the structure, staffing, and performance of OR& R. 9 The Subcommittee
analyzed OR& R data for the fiscal year ending September 1999, and found
that the average times for issuing headquarters rulings were not short
enough to accommodate the needs of businesses seeking (1) advice in advance
of importation or production or (2) resolution of disputes with Customs over
the treatment of imports. COAC recommended that OR& R's diminished resources
and increased workload should be addressed through budget increases and
reassignment of other responsibilities. In addition, COAC stated that
Customs should

ï¿½ explore ways to reduce the number of requests made of it,

ï¿½ explore more efficient ways to issue headquarters rulings, and

ï¿½ institutionalize a system that measures performance and establishes
targets to be achieved through its performance plan.

9 COAC is an advisory committee sponsored by the Treasury Department. Trade
Community

Expressed Concerns About the Timeliness of Headquarters Rulings

B- 284784 Page 10 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

The Special Assistant to the Assistant Commissioner, OR& R, told us that OR&
R has not responded formally to COAC's recommendations because it was not
asked to do so. However, he said that he would expect that OR& R would
continue to take the position that factors beyond OR& R's control- staffing
problems and competing work demands- were the key factors that affect the
timeliness of headquarters rulings. In August 2000, the Special Assistant to
the Assistant Commissioner told us that the COAC Subcommittee continued to
be concerned about the timeliness of headquarters rulings and planned to
further discuss OR& R's headquarters timeliness during a September 2000
meeting.

Although OR& R uses LCIS to track the progress of its prospective rulings,
LCIS is not an effective tool for measuring the timeliness of headquarters
rulings because it does not contain accurate and reliable data. Our
comparison of data from the hard- copy case files with data on those case
files in LCIS focused on four key dates:

ï¿½ the “inquiry date”- the date the importer dated the request
letter to Customs;

ï¿½ the “date received”- the date OR& R received the letter,
which, according to OR& R procedures, is supposed to be (1) stamped on the
correspondence by OR& R when it is received and (2) used by OR& R to measure
the timeliness of classification rulings;

ï¿½ the “assigned” or “adjusted assigned date”- the
date OR& R (1) either initially assigned the case to the attorney or
received additional information crucial to the case and (2) used to measure
its own timeliness; and

ï¿½ the “date closed”- the date OR& R issued the ruling. Table 2
shows our estimates of the extent to which key data in LCIS matched, did not
match, or were not verifiable with dates in individual hard- copy case
files.

Date Percent match a Percent no match Percent not

verifiable b Total

Inquiry date 89% 11% 0% 100%

Date received 70 24 6 100

Date assigned 36 23 41 100

Date closed 99 1 0 100

Note: The estimates in this table are based on a sample of 70 prospective
rulings and are subject to sampling error. The 95 percent confidence
intervals for these estimates vary but are not greater than 12 percentage
points on either side of the estimate. a We defined a match as any date for
which the date recorded in LCIS was within 5 days before or 5

days after the date recorded in the hard- copy file.

LCIS Is Not an Effective Tool for Measuring the Timeliness of OR& R
Headquarters Rulings

Table 2: Comparison of Dates in HardCopy Files With Dates in LCIS for
Prospective Ruling Cases Opened and Closed Between January 1, 1997, and
October 26, 1999

B- 284784 Page 11 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

b Not verifiable means that data were missing from the hard- copy files.
Source: GAO analysis of a random sample of 70 OR& R hard- copy and LCIS case
files representing about 610 cases.

We could not always identify the reasons data in LCIS did not match the data
contained in the hard- copy files. However, our review of the files and
discussions with OR& R officials did provide some insights into why
inaccuracies may have occurred. One factor may simply be data entry errors
by the individual entering the data and the failure of managers to correct
those errors. The Director, Operational Oversight, acknowledged that errors
occurred but told us that, when errors are found in LCIS, they are not
corrected because OR& R has more important things to do than correct these
errors. An OR& R supervisor also acknowledged that errors occurred but said
that, if there were a choice between fixing dates in LCIS and working on new
rulings, he would work on new rulings.

Another factor may be OR& R's definition of “assigned date” and
the ability of OR& R staff to change the “assigned date” in
LCIS, thereby erasing the history of the case in LCIS. Currently, OR& R
calculates timeliness or “days in process” from the LCIS
“assigned date”- the date the case was assigned to an attorney-
to the LCIS “closed date”- the date the ruling was issued. 10 As
part of this calculation, OR& R officials can consider certain events beyond
OR& R's control that could delay the issuance of the ruling, such as a
required laboratory analysis or new information affecting the case.
Accordingly, OR& R officials can change or adjust the LCIS “assigned
date” to reflect a new assigned date (e. g., the date OR& R received
the lab analysis or the new information). However, when this occurs, the
original “assigned date” is erased from LCIS. This means that
the information needed to track the entire history of the ruling using LCIS-
from the original assigned date- is lost.

A related problem centers on whether OR& R staff are properly interpreting
the definition of “assigned date” and, accordingly, entering the
appropriate date. Although some OR& R officials may be entering the new or
adjusted “assigned date” when uncontrollable delays occur,
others are not. For instance, one supervisor told us that he deliberately
did not adjust the “assigned date” date so that he could track
the history of a case from the point when it was originally assigned to an
attorney, rather than from when a laboratory test result was received.

Another factor may be the differences in the ways various OR& R officials
generally enter data into LCIS. We found, for example, that, in some

10 According to the Assistant Commissioner of OR& R, the “date
received” in the first Customs office and the “assigned
date” were originally intended to be the same.

B- 284784 Page 12 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

instances, cases that had been transferred to headquarters from the Customs
office in New York were recorded in LCIS using the “date
received” as the date New York received the request. In other cases,
the date recorded in LCIS was the date the request was received at
headquarters, even though the case was initially received in New York on
some other date.

In its Strategic Plan and Objectives for Fiscal Years 1998 and 1999, OR& R
articulated a goal to create a joint management/ employee working group to,
among other things, redesign LCIS so that OR& R could ensure accurate
measurement and tracking of tasks. According to the plan, OR& R initiated
this effort to carry out its obligation under the Government Performance and
Results Act of 1993 (GPRA) and to adopt a more business- like approach
consistent with strategic planning initiatives that had been adopted by the
Customs Service. In May 1998, OR& R introduced revisions to LCIS that were
designed to differentiate between importers' requests for rulings and other
types of cases, such as reconsiderations of an existing ruling. However, we
found that it is still difficult to distinguish one type of ruling from
another.

For example, during the preliminary stages of our review, we attempted to
use LCIS to isolate importers' requests for rulings from other types of
cases that were contained in LCIS. However, we were unable to do so because
many of the codes that OR& R used in the earlier version of LCIS had not
been retired. Instead, they were given new labels, and, as a result, we were
unable to differentiate between prospective rulings and other types of
cases. We had to rely on OR& R's LCIS System Administrator or supervisors to
go through the files manually and separate importers' requests for rulings
from other products. As a result of this effort, we found LCIS cases that
were incorrectly coded. OR& R officials told us that the revised database
for the 4- month period beginning May 1, 1998, would be expected to contain
errors because of adjustments made during this period. Nonetheless, when we
examined 65 cases that were opened after this 4- month adjustment period, we
found that 20, or about 31 percent, were incorrectly coded. 11

OR& R also revised LCIS guidance, but, in some cases, the revisions were
inadequate because definitions were either missing or did not include key
information that would help staff interpret guidance the same way each time
they entered data. For example, OR& R officials responsible for inputting
data into LCIS told us that, under the old system, they did not

11 These 65 cases were a part of our random sample of 192 LCIS cases that is
discussed in appendix I. OR& R Has Taken Steps to

Enhance LCIS, but Problems Remain

B- 284784 Page 13 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

have to change the LCIS case code when a ruling case was terminated as
“administratively closed.” However, they said that, under the
revised LCIS, they had been orally instructed to recode administratively
closed cases as “internal advice memorandums.” We examined the
new LCIS guidance and found that it did not include a definition of
“administratively closed,” nor did it contain information on
changing codes when closing cases. Thus, individuals who entered data on
administratively closed cases using the new guidance, especially those
without the benefit of the same oral instructions, ran the risk of not
entering the appropriate code when terminating a case.

OR& R officials told us that they did not take steps to ensure that new
codes were systematically applied by OR& R staff. Although OR& R established
a team of supervisors to monitor the database, team members reported to us
that the monitoring program was put on hold because, among other things, the
team members had neither the time nor the resources to carry out the
program.

Our review found that OR& R continues to have significant problems issuing
the majority of headquarters rulings within the 120- day goal it has set as
a benchmark for issuing timely rulings. Specifically, our review showed that
about two- thirds of the approximately 610 prospective rulings that were
requested by importers and issued between January 1, 1997, and October 26,
1999, were not completed within OR& R's 120- day benchmark for those
rulings. OR& R files on individual rulings did not always show why delays
occurred, but it appears that a variety of factors, including the need for
additional information when processing rulings and the mishandling of
requests by OR& R and its customers, contributed to at least some of these
delays. OR& R acknowledged that it has had problems issuing headquarters
rulings on a timely basis and attributed these problems to staffing
shortages and competing workload demands.

Although OR& R uses LCIS as its primary tool for tracking and monitoring the
progress and history of cases and developing reports for Congress, LCIS is
not an effective tool for measuring timeliness of headquarters rulings
because data in the system are not reliable and accurate. OR& R has
initiated some steps to correct problems with LCIS so that it can more
accurately measure and track cases that are entered into LCIS. However, OR&
R's revisions did not correct the problems they were designed to fix, and
many of the errors that occurred before OR& R made the changes continue to
plague the system. Conclusion

B- 284784 Page 14 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

Given that OR& R uses LCIS as a management tool and to provide information
to Congress and other stakeholders, it is especially important that the
system contain data that are accurate and reliable. More accurate and
reliable data would provide greater assurance that the LCIS- based
information OR& R provides to stakeholders- Congress, the Department of
Treasury, and the trade community- is accurate, meaningful, and credible. It
would also give OR& R a basis for evaluating the time needed to develop and
complete rulings and enable it to systematically establish formal benchmarks
for measuring the timeliness of all types of rulings. This is consistent
with the performance and results based standards of GPRA. Formal benchmarks
would also facilitate better communication with importers that request
rulings because, by consulting these benchmarks, they would have more
realistic expectations about when OR& R could reasonably be expected to
complete a particular type of ruling.

We recommend that the Assistant Commissioner, OR& R, take steps to

ï¿½ modify LCIS to enable the system to record and retain key data so that
managers can more readily monitor and track the history of cases;

ï¿½ provide clear and complete guidance to ensure that staff that use LCIS
understand and consistently interpret the guidance, as well as train staff
on any modifications to LCIS;

ï¿½ establish an ongoing LCIS monitoring system to ensure the quality and
integrity of the data entered and maintained in the system;

ï¿½ evaluate data on the timeliness of headquarters rulings; and

ï¿½ establish reasonable goals, benchmarks, and performance measures for
improving OR& R's performance.

In written comments on a draft of this report dated August 7, 2000, Customs
discussed actions it proposed to take to implement each of our
recommendations (see appendix II). While most of the actions proposed by
Customs appear to be steps in the right direction, we have concerns that
they may not fully resolve the timeliness and data problems addressed in
this report. Specifically, with respect to our recommendation that LCIS be
revised to record and maintain key data, Customs officials stated that LCIS
will be modified to either calculate process duration using “date of
inquiry” and “date closed” or “standardize entry
requirements for existing fields.” Although it is ultimately Customs'
responsibility to decide which dates to use to measure timeliness and manage
headquarters rulings, both actions, especially if taken together, could be
viewed as steps toward ensuring that Customs has more accurate LCIS data.
However, in our view, Customs managers would be better positioned to monitor
and track Recommendations

Agency Comments and Our Evaluation

B- 284784 Page 15 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

the histories of headquarters cases if LCIS retained key interim dates, such
as the “date assigned.”

With respect to our recommendation concerning the clarity and completeness
of LCIS guidance and training on modifications to LCIS, the steps proposed
by Customs appear to be a reasonable starting point toward helping staff
understand their responsibility toward consistently interpreting the
guidance. However, it may also be advantageous to provide training to all
employees- not just new employees- who enter data into LCIS so that each
employee has a common understanding of LCIS data requirements. Regarding our
recommendation to establish an ongoing LCIS monitoring system to ensure the
quality and integrity of data entered and maintained in LCIS, Customs said
it would (1) establish a series of data edits to prevent users from, among
other things, entering nonexistent or expired codes, and (2) change some of
the LCIS reports to better identify data integrity issues. While data edits
could enhance the accuracy of LCIS data and changes to reports could provide
additional information on data integrity problems, neither of these actions
constitute an ongoing monitoring effort that would help OR& R systemically
identify and resolve data quality and integrity problems.

With respect to our recommendation that OR& R evaluate data on the
timeliness of headquarters rulings, Customs stated its intent to use LCIS
reports on timeliness for certain monthly meetings, managers' performance
appraisals, and the agency wide self- inspection program. While this might
focus management attention on the timeliness of headquarters rulings, a
formal evaluation of ruling timeliness could help assure that (1) the
underlying causes for ruling delays are fully assessed and (2) the most
appropriate corrective actions are taken. This evaluation could also set the
framework for establishing goals, benchmarks, and ultimately, performance
measures.

In response to our recommendation that OR& R establish reasonable goals,
benchmarks, and performance measures for improving OR& R's performance,
Customs stated that it intends to revise the directive on rulings to reflect
the reorganized rulings program and incorporate realistic time frames.
Although these actions might better communicate to the trade community the
time Customs takes to develop and complete rulings, they do not address the
overall issue of improving OR& R's performance. By establishing the
aforementioned goals, benchmarks, and performance measures, OR& R would then
be better positioned to (1) measure its timeliness against standards with a
view toward improving its overall

B- 284784 Page 16 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

performance and (2) enhance its responsiveness to the timeliness concerns
expressed by the trade community.

In addition, Customs commented that the title and initial pages of our draft
report were misleading because they suggested that the problems identified
in this report were “global problems,” not headquarters rulings
that were the subject of our review. Customs also commented that our review
was distorted because the scope of the work did not include (1) rulings
issued by OR& R's New York office, which, according to Customs, issues 90
percent of OR& R rulings within 30 days, and (2) the percentage of
headquarters work devoted to non- rulings.

We have revised the title and other sections of the report to further
clarify that our work and the problems we identified pertain to headquarters
rulings. With respect to the scope of our work, we focused on headquarters
activities because, according to OR& R, these ruling are more complex to
process and because headquarters activity was the main interest of our
requestor. We agree, as Customs' comments pointed out, that the timeliness
of the more routine rulings processed by OR& R's New York office was beyond
the scope of our review. Therefore, we cannot confirm or refute OR& R's
claim that most of these rulings were, in fact, processed in the requisite
30 days. Our report focused on the timeliness problems associated with
headquarters rulings- problems that both OR& R and the trade community have
previously recognized and the same problems that could inhibit OR& R's
customers from making timely economic decisions affecting their livelihood.

Customs also provided five other comments about particular aspects of the
draft report. First, Customs commented that it would have been useful to
know what percentage of rulings that took longer than the benchmark were due
to delays caused by the requesting importer. As we pointed out in our
report, we could not always determine why delays occurred, and we were only
able to ascertain the cause for delays when information was available either
in the hard- copy files or through discussions with supervisors responsible
for the cases. We would hope, however, that any future evaluation of
timeliness by OR& R would incorporate an analysis of reasons for delays so
that OR& R could better identify internal problem areas and take appropriate
corrective actions.

Second, Customs indicated that our statement that “OR& R informs the
trade community primarily through its rulings, which establish the duty an
importer will pay” was incomplete and stated that it attempts to use
means other than rulings to inform the trade community. Although we
discussed General Comments

B- 284784 Page 17 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

some of these other methods in the draft, we have modified the sentence in
question and inserted a footnote to clarify that rulings are one of several
ways OR& R informs the trade community.

Third, OR& R confirmed that it has a staff of about 250 employees, but
commented that we did not discuss the number of attorneys in the particular
units responsible for the headquarters rulings. Customs stated that
approximately 125 of the 250 employees are located in the New York office,
whose activities were not within the scope of our review. For our part, we
intended that our discussion of the 250 employees and their roles would
provide background and context for the size and composition of OR& R as a
whole. Nevertheless, we revised the report to identify the numbers and types
of staff located in the headquarters and New York offices. Custom's non-
ruling activities were discussed in the report.

Customs fourth comment related to our finding that about 36 percent of the
cases that exceeded the 120- day benchmark were cases in which OR& R sent
the product to a laboratory or consulted with others. Customs stated that it
“seems unfair” to say those rulings exceeded the benchmark,
since the directive allows for those types of delays. It is important to
reiterate that we were not always able to determine why delays occurred.
However, in our report, we provided examples in which some of the delays
seemed to be caused by additional information gathering while others did
not, even though a laboratory or outside party was consulted in both
instances. In any event, we estimate that about two- thirds of the cases in
which delays occurred exceeded the benchmark for reasons other than a
laboratory analysis or consultation with others.

Fifth, Customs disagreed with our assessment that the entire history of the
ruling from the original assigned date is lost when an assigned date is
changed. Customs also commented that LCIS was not intended to track the
entire history of the ruling. We have changed the text to clarify that our
discussion of the history of the case pertains only to LCIS. However, as
discussed in our report, OR& R uses LCIS to calculate timeliness and does so
from the “assigned date” to the LCIS “closed date.”
We pointed out that using the “assigned date” becomes
problematic from a historical perspective if the “assigned date”
can be changed or adjusted based on a particular event. The problem worsens
if LCIS data understates delays as a result of these adjustments- which
could occur with each subsequent adjustment. Although the original intent of
LCIS may have been only to provide data needed by management, it is now used
to provide information for Congress and others and therefore should be as
accurate and reliable as possible. As previously mentioned, we found the
information on

B- 284784 Page 18 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

headquarters rulings contained in LCIS was, in many instances, incomplete or
inaccurate.

In addition to the above comments, Customs made technical comments related
to this report, which we incorporated as appropriate.

As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days from
the date of this letter. At that time, we will send copies of the report to
Senator William V. Roth, Senator Daniel P. Moynihan, Senator George V.
Voinovich, Senator Richard J. Durbin, Senator Ben Nighthorse Campbell,
Senator Byron L. Dorgan, Representative Sander M. Levin, Representative Bill
Archer, Representative Charles B. Rangel, Representative Jim Kolbe,
Representative Steny H. Hoyer, Representative Steve Horn, and Representative
Jim Turner in their capacities as Chairman or Ranking Minority Member of
Senate and House Committees and Subcommittees. We are also sending copies of
this report to the Honorable Jacob J. Lew, Director, Office of Management
and Budget; the Honorable Lawrence H. Summers, Secretary of the Treasury;
and the Honorable Raymond W. Kelly, Commissioner of Customs. We will also
make copies available to others upon request.

The major contributors to this report are acknowledged in appendix III. If
you have any questions, please contact me or John F. Mortin, Assistant
Director, at (202) 512- 8777.

Sincerely yours, Laurie Ekstrand Director Administration of Justice Issues

Page 19 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

Page 20 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

Contents 1 Letter 22 Appendix I Objectives, Scope, and Methodology

25 Appendix II Comments From the U. S. Customs Service

30 Appendix III GAO Contacts and Staff Acknowledgments

Table 1: Estimate of the Timeliness of Prospective Ruling Cases Opened and
Closed Between January 1, 1997, and October 26, 1999

7 Table 2: Comparison of Dates in Hard- Copy Files With

Dates in LCIS for Prospective Ruling Cases Opened and Closed Between January
1, 1997, and October 26, 1999

10 Tables

Page 21 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

Appendix I Objectives, Scope, and Methodology

Page 22 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

Our objectives were to (1) determine the Office of Regulations and Rulings'
(OR& R) response time for issuing headquarters rulings on imported goods
and, if delays occurred, reasons why they occurred, and (2) examine whether
the Legal Case Inventory System (LCIS) is an effective tool for measuring
the timeliness of OR& R's headquarters rulings. To meet our objectives, we
did our work at OR& R headquarters in Washington, D. C. As agreed with your
office, we focused on prospective rulings-- that is, those requested by an
importer on goods that are proposed for entry into U. S. markets– that
were (1) completed by OR& R's headquarters office in Washington, D. C., and
(2) opened and closed by OR& R between January 1, 1997, and October 26,
1999, and covered the classification, valuation, marking, or drawbacks of
imported goods.

To determine OR& R's response time for issuing headquarters rulings and, if
delays occurred, the reasons for those delays, we did a hard- copy file
review of a random sample of 192 rulings that were opened and closed at OR&
R headquarters between January 1, 1997, and October 26, 1999. The 192
rulings represented a population of 1,650 cases entered into LCIS that we
expected to fit our criteria for prospective classification, valuation,
marking, or drawback rulings. We used LCIS to draw our original sample and
identify individual cases. However, as we examined cases, we determined that
we could not use LCIS to measure the timeliness of rulings because we could
not readily distinguish between types of cases, such as internal advice
memorandums, reconsiderations of existing rulings, and prospective rulings.
Therefore, after we selected our original sample, we relied on OR& R's hard-
copy files to gather data on headquarters ruling timeliness. 1 However,
before collecting data from OR& R hard- copy case files, we asked the LCIS
System Administrator or supervisors to confirm that the codes for type of
ruling (such as internal advice memorandums and prospective rulings) and
category of ruling (such as classification or valuation rulings) in LCIS
were correct for the cases in our sample. This verification process provided
assurance that the case files we reviewed were rulings as defined by OR& R.

Once we selected our sample, we developed and applied a data collection
instrument to review OR& R's hard- copy ruling files. The data collection
instrument focused on key variables, such as “type” and
“category” of ruling, as well as “inquiry date,”
“received date,” “assigned date,” and “date
closed.” We pretested the data collection instrument prior to
initiation of

1 We originally selected a random sample of 194 cases, but OR& R could not
locate hard- copy files for 2 of the cases. Thus, our sample covered 192
cases that were entered into LCIS over the period.

Appendix I Objectives, Scope, and Methodology

Page 23 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

our case file review and revised the instrument accordingly to reflect the
information in the files.

After we tested the data collection instrument, our review of OR& R case
files proceeded through several phases of data collection and verification.
First, we collected data from the case files and copied the relevant
information onto our data collection instrument. Second, we verified our
review of the case files and the recording of relevant information with the
responsible OR& R supervisor. We asked the supervisor to discuss reasons for
any discrepancies, to explain data missing from the hard- copy files, and to
consider any aspects of the case file contents that may have been overlooked
or misinterpreted (e. g., case type, case category, or one or more dates
that did not match). After we completed the data collection and verification
process, we determined that 70 of the 192 cases actually involved
prospective classification, valuation, marking, or drawback rulings that
could be analyzed. 2 On the basis of this analysis, we estimate that OR& R
processed approximately 610 similar cases during the time period under
study. (Because this estimate is based on the sample results, the estimate
of 610 cases is surrounded by a 95 percent confidence interval that extends
from approximately 504 to 716 cases.)

Next, we measured OR& R's timeliness using the 120- day benchmark OR& R had
established for measuring the timeliness for headquarters rulings. Because
hard- copy files did not always contain the date OR& R received the
importer's request- the date OR& R is supposed to use to measure against its
120- day benchmark- we used the date the requester sent the letter to OR& R
(“ inquiry date”) as our base line for measuring timeliness.
Based on the data that were available in the files, we estimated that the
difference between when the date the importer dated the letter and when it
was received by OR& R was, on average, 5.5 days. 3 This difference did not
materially affect our results.

To assess whether LCIS is an effective tool for measuring the timeliness of
OR& R's headquarters rulings, we compared data from the 70 hard- copy case
files with data from those cases that had been entered into LCIS. We defined
a match as any date for which the date recorded in LCIS was

2 While reviewing the 192 cases, we found 1 additional case that was a
prospective ruling that fit our criteria. Thus, we determined that 71 cases
were prospective rulings. However, after we collected and recorded the data
from the hard- copy file, and before we asked the supervisor to verify our
recordation, OR& R misplaced the file and could not find it for the
verification process. As a result, we did not include this case in our
ruling sample.

3 The estimate of 5. 5 days is based on 66 of the sampled 70 rulings for
which both dates were available. This estimate is surrounded by a 95 percent
confidence interval that extends from 3. 8 to 7. 2 days.

Appendix I Objectives, Scope, and Methodology

Page 24 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

within 5 days before or 5 days after the date recorded in the hard- copy
file. We did this because OR& R officials reported to us that the dates in
the hard- copy and LCIS files were often off by a few days due to the time
it took to enter data in LCIS. As mentioned earlier, Customs supervisors
verified all data we collected from the file review and answered questions
about any discrepancies we found between the hard- copy file review and LCIS
data.

In doing our work, we also interviewed key OR& R officials about their use
of LCIS, changes to the database over time, definitions of fields in the
database, and problems with the database. We also reviewed pertinent
documents, such as a 1989 Customs directive regarding classification ruling
decisions, and LCIS guidance, including documentation on components of the
system, how data is coded and entered into the system, and the relevant
coding schemes for rulings.

Because we followed probability selection procedures to draw our random
sample of rulings, our sample is only one of a large number of samples that
we might have drawn. Since each sample could have provided different
estimates of the characteristics of the rulings, we express our confidence
in the precision of our particular sample's results as a 95 percent
confidence interval. This is the interval that would contain the actual
population value for 95 percent of the samples we could have drawn.

We also interviewed OR& R officials, including the Special Assistant to the
Assistant Commissioner; the Director, Operational Oversight; the LCIS System
Administrator; and OR& R supervisors, to discuss OR& R performance measures
and the reasons why most rulings were taking more than their benchmark of
120 days. Furthermore, we discussed OR& R's efforts to improve its ability
to measure Customs' response time to importers' requests for rulings, and we
also reviewed relevant reports on OR& R and OR& R operations, including our
previous testimony and a report on OR& R prepared by the Commercial
Operations Advisory Committee (COAC).

We did our audit work between August 1999 and July 2000 in accordance with
generally accepted government auditing standards.

We requested comments on a draft of this report from the Customs Service.
Customs' comments are discussed near the end of the letter and are reprinted
as appendix II. We made changes in the report as appropriate.

Appendix II Comments From the U. S. Customs Service

Page 25 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

See p. 16. See p. 16.

Appendix II Comments From the U. S. Customs Service

Page 26 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

Appendix II Comments From the U. S. Customs Service

Page 27 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

See pp. 14- 15. See p. 15. See p. 15.

Appendix II Comments From the U. S. Customs Service

Page 28 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

See p. 15. See pp. 15- 16. Now on p. 2. See p. 16.

Now on p. 3. See pp. 16- 17.

Now on p. 4. See p. 17.

Appendix II Comments From the U. S. Customs Service

Page 29 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

Now on p. 7. See p. 17.

Now on p. 11. See pp. 17- 18.

Corrections made; see pp. 2- 14.

Appendix III GAO Contacts and Staff Acknowledgments

Page 30 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

Laurie E. Ekstrand (202) 512- 8777 John F. Mortin (202) 512- 8777

In addition to those named above, Brenda Bridges, Nancy Briggs, James
Fields, Charity Goodman, Mary Catherine Hult, Jan Montgomery, Michelle
Sager, and Jerome Sandau made key contributions to this report. GAO Contacts

Acknowledgments

Page 31 GAO/ GGD- 00- 181 OR& R's Headquarters Rulings

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