Processing Cost for Duty-Free Entry Certificates.

This report documents the costs for the processing of duty-free entry certificates by the Defense Contract Management Command International, international Logistics office DCMCI-I for imported defense goods. It also addresses potential alternative methods for achieving the goals of the program. Since payment of duties by the Defense Logistics Agency to U.S. customs would be payment from one government agency to another, consideration was given to alternatives that involve paying, rather than avoiding, certain duties. However, the major policy changes that would be required to implement such a program probably are not feasible. At a minimum, a threshold should be used to pay duty on shipments with a value under 1,160. The duty on those shipments is less than the 33 cost to process a duty-free certificate. Also, the Mechanization of Contract Administration Services MOCAS computer system should be modified to allow users to input item descriptions and get one or more possible tariff codes. Clarks must often look-up tariff codes for military-consigned shipments in large Customs manuals. Combined savings from a threshold and the system modification would be approximately 4 workyears.