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092653 1 (1969-12-08)

handle is hein.gao/gaobacwmv0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 DEC 198 CIML D'VIS;0N Dear Mr. Ambrose: We have completed our review at the Miami District Office of Customs control over jet fuel imported and withdrawn, free of duty, under section 309 of the Tariff Act of 1930, as amended, by air carriers at the Miami International Airport (MIA). We are currently finalizing the results of similar rcviews performed at the New York and Seattle District Offices. The purpose of this letter is to obtain your comments on the findings developed at the Miami District Office regarding weaknesses in Customs procedures for controlling the with- drawals of jet fuels and the collection of duties on fuel that was used on ineligible flights and on the domestic portion of an Eastern/Braniff interchange flight from March 1967 through January 1969. These matters are presented for your comments inasmuch as they have agency-wide application and require a decision :egarding the collection of duties on Customs transactions that have been finalized. Treasury Decision 66-99 allows use of duty-free fuel on inbound and outbound flights simultaneously engaged in domestic and foreign trade provided there is no change of aircraft in the United States. Records furnished Customs by five oil companies importing fuel show that a total of about 106.2 million gallons of duty-free jet fuel (AVJET A) was withdrawn at MIA during fiscal year 1969. Customs Regulation 10.62(d) provides that representatives of the Commissioner of Customs will from time to time verify various withdrawals of bonded jet fuel against all pertinent records, including financial records, of the withdrawers, deliverers, and receivers of fuel. Since the majority of the flights receiving duty-free fuel at MIA and simultane- ously engaged in domestic and foreign trade were operated by Eastern Airlines, we selected some of the Eastern flights for review to ascer- tain the extent of Customs control over withdrawals. Weaknesses in procedures for controlling the withdrawals of jet fuel Our review disclosed that personnel controlling withdrawals, in the Miami District, were relying on the importer for assurance that all flights receiving the fuel were properly entitled to duty-free use of jet fuel. We found that Eastern Airlines loaded its own aircraft at MIA and that Humble Oil & Refining Company (Humble), the importer, was rely- ing on Eastern Airlines to determine those flights entitled to the fuel.