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GGD-80-19 1 (1979-11-06)

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 REPORT BY THE


 Comptroller General


 OF THE UNITED STATES





 U.S. Customs Service

Misclassifies Tobacco Imports






Increases in the volume of imported tobacco
prompted Senators Helms and Huddleston
and Representative Walter B. Jones to ask
GAO to review the U.S. Customs Service's
classification of tobacco imports.

GAO found that Customs misclassifies tobac-
co strips as scrap tobacco. The strips, used
in manufacturing cigars and cigarettes,
should be classified as stemmed cigar or ciga-
rette leaf. Had the strips been properly clas-
sified, as much as $188 million in additional
import duties might have been collected over
the last 10 years.

Although Customs has been petitioned to
change its scrap classification, the outcome
is uncertain and legislation may be
needed.




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                              77                                 GGD-80-19
  0coul-                                                  NOVEMBER 6, 1979

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