GAO

United States General Accounting Office

Report to the Chairman, Permanent 

Subcommittee on Investigations, 

Committee on Governmental Affairs,

U.S. Senate

May 1999 U.S. CUSTOMS 

SERVICE

Efforts to Curtail the 

Exportation of Stolen 

Vehicles

GAO/OSI-99-10

United States

General Accounting Office

Washington, D.C. 20548 Letr

Page 1 GAO/OSI-99-10 Exportation of Stolen Vehicles

GAO

Office of Special Investigations

B-279627 Letter

May 12, 1999

The Honorable Susan M. Collins

Chairman, Permanent Subcommittee 

 on Investigations

Committee on Governmental Affairs 

United States Senate

Dear Madam Chairman:

This report responds to your request that we describe efforts by the U.S. 

Customs Service to curtail the exportation of stolen vehicles from the 

United States. We briefed your office on the results of our inquiry and 

identified potential witnesses for future hearings. We also agreed to 

provide you a report describing (1) applicable regulations for exporting 

used, self-propelled vehicles from the United States, (2) Customs policies 

and procedures for controlling the export of these vehicles, (3) methods 

used to illegally export these vehicles, and (4) improvements in operations 

being considered by Customs. As you requested, we have also discussed 

current and proposed treaties that deal with the repatriation of stolen 

vehicles.

As agreed, we visited selected port operations in Florida, Texas, and 

California1 in order to observe the current operating process for the 

exportation of used, self-propelled vehicles. We held discussions with 

Customs headquarters officials who concurred with our observations 

regarding Customs’ overall used-vehicle export operations.

Summary At the ports we visited, Customs complied with its regulatory procedures 

for exporting used, self-propelled vehicles by reviewing the documentation 

of ownership and inspecting the vehicles presented for export to ensure 

that they were the vehicles described in the documentation.

To circumvent Customs vehicle exportation procedures, thieves have used 

false documents as proof of vehicle ownership. They have also altered 

vehicle identification numbers (VIN), switched vehicles after inspection of 

VINs, hidden vehicles in containers, and driven vehicles across border 

crossings without reporting them.

1

We visited the Miami Seaport and Port Everglades, Florida; Port of Brownsville/Los Indios, Port of 

Hidalgo/Pharr, and Port of El Paso, Texas; and Port of San Francisco, California.
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In order to more efficiently and effectively deter the export of stolen 

vehicles, Customs has published proposed amendments to its regulations 

in the Federal Register.2

 These amendments limit the type of document 

that can be used to establish proof of a vehicle’s ownership and would 

permit only an original or certified copy of title or an original 

manufacturer’s statement of origin as proof of ownership. In addition, 

Customs officials, state and federal law enforcement agencies, and the 

insurance industry are exploring methods, such as computer-assisted 

documentation checks and nonintrusive cargo container examinations, to 

curtail the export of stolen vehicles.

The U.S. Department of State has been negotiating bilateral treaties with 

several countries to alleviate the difficulty that owners of stolen vehicles 

face when their vehicles have been transported across international 

borders. As requested, we have included a list of existing and proposed 

treaties.

Background Customs reported that from 1996 to 1998, 1.84 million vehicles were 

presented for export from the United States: 582,173 in 1996; 642,838 in 

1997; and 615,446 in 1998. Of these vehicles, Customs identified and seized 

2,636 stolen vehicles valued at $38.1 million in fiscal year 1996; 2,119 stolen 

vehicles valued at $35.4 million in fiscal year 1997; and 2,109 stolen vehicles 

valued at $28.2 million in fiscal year 1998. During this same period, 

Customs made 547 arrests and obtained 265 convictions of individuals 

involved in the exportation of stolen vehicles.

In addition, the National Insurance Crime Bureau (NICB)3

 has estimated 

that 200,000 stolen vehicles are exported each year, some of which are 

included in the vehicles reported as exported by Customs from 1996 to 

1998. These stolen vehicles had an estimated value of $3 billion ($1 billion 

per year). According to Customs officials, other law enforcement officials, 

and NICB intelligence data, most stolen vehicles are transported to Central 

America, South America, and Eastern Europe.

262 Fed. Reg. 55,764 (1997) (to be codified at 19 C.F.R. § 192).

3

NICB is a not-for-profit, tax-exempt organization that works closely with state and federal law 

enforcement authorities and maintains databases on exported vehicles.
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According to the Federal Bureau of Investigation’s (FBI) Criminal Justice 

Information System, 1.35 million vehicles valued at approximately

$7.3 billion were reported stolen in 1997,4

 with the highest number of thefts 

reported in major cities that are in close proximity to an international land 

crossing or seaport. While the number of vehicles reported stolen in 1997 

declined slightly from that in 1995 (1.47 million) and in 1996 (1.4 million), 

the value per reported stolen vehicle increased from $5,129 in 1995 and 

$5,372 in 1996 to $5,416 in 1997. FBI officials advised us, however, that firm 

statistics on the number and value of stolen vehicles are not available 

because not all vehicle thefts are entered into the FBI’s National Crime 

Information Center (NCIC) database. They explained that not every 

vehicle theft is reported by the owner and that some state and local laws 

may classify the theft as the unauthorized use of a vehicle, insurance fraud, 

or bank fraud rather than a stolen vehicle.

Regulations for 

Exporting Used, Selfpropelled Vehicles

Regulations for exporting used, self-propelled vehicles are contained in

19 C.F.R. part 192. The regulations at 19 C.F.R. section 192.2(a) and (b) 

require persons attempting to export automobiles, trucks, motorcycles, or 

buses to present the vehicle, an original or certified copy of the certificate 

of title, and two facsimiles5 of the original or certified copy to Customs at 

the port of exportation. If a certificate of title is not available due to state 

statutory requirements, the person attempting to export one of these 

vehicles may present another document to prove lawful ownership. 

Generally, all ownership documents must describe the vehicle and include 

the VIN or product identification number if the vehicle does not have a VIN. 

(19 C.F.R. section 192.2(a))

For vehicles that are to be exported by airplane or ship, the regulations 

provide that the documentation and vehicle must be presented at least 

3 days prior to lading (loading). For vehicles that are to be driven or 

transported by rail or highway, the documentation must be presented

3 days prior to exportation; and the vehicle must be presented on the day of 

exportation. (19 C.F.R. section 192.2(c))

4The latest year for which vehicle theft statistics are available is 1997.

5

Under a proposed amendment (62 Fed. Reg. 55,764), “facsimile” will be replaced with “copy” to avoid 

confusion. “Facsimile” is currently used interchangeably with “fax.”
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Customs personnel are required to stamp both facsimile documents with 

the date on which the exporter presents them at the port. The exporter’s 

stamped copy is the only documentation acceptable as proof of compliance 

with Customs requirements. (19 C.F.R. section 192.2(d))

Procedures for 

Exporting Used, Selfpropelled Vehicles

At each of the six ports we visited, Customs had designated a specific area 

to review the documentation of ownership and check if the vehicle 

presented matched the documentation. The inspection of vehicles and 

documents was conducted at an area adjacent to Customs’ processing 

office, the shipper’s facility, or a bonded warehouse.

We found that Customs’ operating procedures for processing paperwork at 

each of the ports we visited complied with the regulatory requirements. 

Three of the six ports we visited were located in border areas in Texas 

where vehicles were either driven or transported by rail or highway. We 

learned that, consistent with the regulations, Customs personnel required 

exporters (1) to forward to Customs the appropriate documents by mail, 

courier, or electronic facsimile 3 days before the intended departure of the 

vehicle from the United States and (2) to present the vehicle on the day of 

export. Customs examined the documents upon receipt and, on the day of 

export, compared the documents with the vehicle to ensure that the vehicle 

matched the documentation.

Similarly, Customs procedures at the other three ports we visited in San 

Francisco, Miami, and Port Everglades complied with the regulatory 

requirements for exporting vehicles by ship. In this regard, Customs 

required exporters to present the documentation and the vehicle at least

3 days prior to lading. Upon receipt of the vehicle and the documentation, 

Customs inspected the vehicle to determine if it matched the 

documentation.

At each of the six ports we visited, Customs also routinely entered the VIN 

of vehicles being permanently exported into the Treasury Enforcement 

Communications System (TECS) to determine if the vehicles were listed as 

stolen. For vehicles not listed as stolen, Customs authenticated both 

facsimiles of ownership. Customs then returned one facsimile to the 

exporter and forwarded the other to NICB.

In order to observe another process used to detect stolen vehicles, we 

accompanied the Miami Seaport inspectors and members of the local autotheft task force on a random inspection of cars at the shipping yards along 
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the Miami River. The inspectors and members of the task force checked to 

ensure that the cars ready for exportation had been approved by Customs. 

To do this, they compared the VIN on each vehicle with the documentation 

that the shipper had on file. They also entered the VIN of each vehicle into 

the NCIC database to determine if the vehicle had been stolen. At one 

shipping yard, they located five stolen vehicles, valued at over $144,000, for 

which the shipper had no documents.

Methods Used to 

Circumvent Port 

Operation Procedures

During our visits to the ports, we learned that thieves have circumvented 

Customs export procedures in three principal ways: they have used 

duplicate or counterfeit titles and VIN plates; switched vehicles after 

inspections; or not reported vehicles as exports, instead either concealing 

them in shipping containers or driving them across the border.

False or Counterfeit 

Documents and VINs 

Customs advised us that car thieves have used counterfeit or duplicate 

titles as proof of vehicle ownership if they did not find original titles in the 

cars they had stolen. Thieves also have put counterfeit VIN plates on stolen 

cars.

Customs explained, as an example, that a thief will obtain a duplicate title 

for a car6

 that is similar in make, model, and color to the one stolen; install 

in the stolen vehicle a counterfeit VIN plate with the VIN that appears on 

the duplicate title; and export the car. A thief will also purchase a salvage 

vehicle, transfer that vehicle’s VIN plate to a stolen vehicle, and export the 

car.

Vehicles Switched After 

Inspections

Inspectors at seaports advised us that after Customs clears a vehicle for 

export, the vehicle is stored at a shipper’s facility or at an approved vehicle 

export broker’s location until it is exported. Customs has no control over 

access to these storage areas. In some cases after a car was cleared for 

export with the ownership papers in order, thieves switched the inspected 

car with a stolen car. In such cases, the stolen vehicle was usually the same 

make, model, and color as the inspected car, with a counterfeit VIN that 

matched the VIN in the paperwork presented to the inspector. When 

loading a vehicle, shippers checked the vehicle’s VIN against the VIN on the 

6

In some instances, the duplicate title is sent to a mail drop.
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exporter’s stamped copy of ownership papers and, if the two VINs 

matched, shipped the car.

Vehicles Not Reported for 

Export

Customs has found a number of stolen vehicles hidden in containers whose 

contents were falsely manifested. For example, Customs found a hidden 

compartment built inside a container. Two stolen cars had been loaded 

into the compartment, and bags of cement were stacked in the 

compartment to conceal the vehicles and to discourage closer inspection. 

Customs advised us that with the millions of containers going through the 

ports each year, it is virtually impossible to open and inspect each one.

Customs officials also told us that many stolen vehicles are simply driven 

over border crossings. Unless a car has been declared as an export, it will 

generally cross a border unchallenged.

Customs Management 

Initiatives

Customs management told us that it is exploring a number of ways to 

curtail the exportation of stolen vehicles. Its efforts include the following:

• Customs proposed amendments to its regulations to address the 

documentation required for export.7 With regard to the documentation 

required for automobiles, trucks, vans, minivans, motorcycles, and 

buses, Customs proposed to accept only (1) an original or certified copy 

of title or (2) an original manufacturer’s statement of origin for untitled 

vehicles. Notarized copies of these documents will no longer be 

accepted. For vehicles that are leased or encumbered by a lien, the 

amendments require a letter from the lessor or lien holder approving the 

export.

• In 1997, Customs initiated a pilot program at the Miami Seaport whereby 

inspectors electronically transmit to NICB on a daily basis information 

on all vehicles that Customs processed that day. NICB checks the 

information against its various databases and by the next morning 

provides Customs with a computerized printout that flags any vehicles 

with incorrect VINs, reported as stolen, identified as being leased, 

previously presented for export, and/or reported as salvaged. Customs

7

62 Fed. Reg. 55,764 (1997) (to be codified at 19 C.F.R. § 192).
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Page 7 GAO/OSI-99-10 Exportation of Stolen Vehicles

expanded this program to Port Everglades, Florida; Ports Houston, 

Nogales, and El Paso, Texas; and Port Wilmington, Delaware.8

• Customs is working with the FBI to develop an electronic database 

called “Project VINNY.” Under this project, Customs will electronically 

transmit vehicle exportation information for each port on a daily basis 

to the FBI’s Criminal Justice Information Services Division data center. 

At the data center, VINNY will be used to check the NCIC database and 

electronically forward the vehicle information to NICB for its database 

checks. NICB will respond to the data center, which will electronically 

forward both the NICB and NCIC data check results to the port.

• Customs is field-testing portable, hand-held computer scanners that will 

give inspectors in the field instant access to TECS for VIN checks and 

identify vehicles that have already been presented for export.

• Customs is working with the Port Authority of Miami in testing gammaray detection scanners for nonintrusive examinations of closed cargo 

containers, rail cars, and truck trailers. This system produces an x-raylike image of a container’s contents. As a result of the test’s success, the 

state of Florida has ordered 10 scanners for installation at selected 

Florida ports.

• As discussed below, Customs is working with the Department of State 

on additional treaties that provide a process to facilitate the repatriation 

of stolen vehicles.

Customs has indicated that while all these projects are or will be beneficial, 

staffing resources and financial restrictions may impede implementation of 

some of them.

Treaty Efforts The Department of State, through the Stolen Vehicle Treaty Program, has 

been working with Customs, the Department of Justice, and NICB to 

eliminate the difficulties faced by owners of vehicles that were stolen and 

transported across international borders. The United States currently has 

one treaty in force, a 1981 agreement with Mexico, that is designed to 

establish a uniform process for requesting the repatriation of illegally 

exported vehicles.9

8The program was also expanded to the Port of Los Angeles/Long Beach but was terminated on Apr. 1, 

1998, due to funding limitations.

9

Convention for the Recovery and Return of Stolen or Embezzled Vehicles and Aircraft, Jan. 15, 1981, 

U.S.-Mex., 35 U.S.T. 325.
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In recent years, the Department of State has begun to negotiate a number 

of similar bilateral treaties with countries in Central America, the 

Caribbean, and Central Europe. These proposed treaties provide for timely 

notification to the owner of record when suspected stolen vehicles are 

located and seized by the authorities in countries other than the country of 

registration. In addition, the proposed treaties identify procedures to be 

followed in returning vehicles to their owners. These procedures require 

the country that has identified a suspected stolen vehicle to (1) safeguard 

the vehicle to prevent modification of the vehicle’s VIN, (2) notify the 

embassy of the country from which the vehicle was imported whether the 

vehicle will be returned, and (3) make the vehicle available to the owner 

within 15 days of deciding that it will be returned. While the proposed 

treaties provide a recovery process, they do not require that the stolen 

vehicle be returned if local courts award it to a third party in the country of 

recovery. Appendix I lists the existing and proposed treaty countries as 

well as data on the number of vehicles recovered from these countries.

Scope and 

Methodology

We conducted our initial work from June 19, 1997, to December 14, 1997, 

and subsequent work, as requested by your Subcommittee, from October 9, 

1998, to March 8, 1999. We interviewed Customs headquarters officials and 

other Customs personnel responsible for issues concerning the exportation 

of vehicles. We also interviewed federal, state, and local law enforcement 

officials at Miami Seaport and Port Everglades, Florida; Port of 

Brownsville/Los Indios, Port of Hidalgo/Pharr, and Port of El Paso, Texas; 

and Port of San Francisco, California. We interviewed NICB officials and 

obtained information from participants of NICB conferences at which 

issues concerning stolen vehicles were discussed. We reviewed Customs 

policies and procedures for handling the exportation of stolen vehicles, 

procedures used at the different locations we visited, and documents 

related to vehicles being exported at the various locations.

We discussed our limited observations with Customs personnel responsible 

for vehicle exportation. They concurred with our observations and advised 

us of proposed revisions to existing export procedures.

As arranged with your office, unless you announce its contents earlier, we 

plan no further distribution of this report until 5 days after the date of this 

letter. At that time, we will send copies of the report to the Honorable 

Robert E. Rubin, Secretary of the Treasury; the Honorable David C. 

Williams, Treasury Inspector General; the Honorable Raymond W. Kelly, 
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Page 9 GAO/OSI-99-10 Exportation of Stolen Vehicles

Commissioner of Customs; the Honorable Louis J. Freeh, Director of the 

FBI; and John G. Diliberto, President/Chief Executive Officer of NICB. 

Copies will also be made available to others upon request. If you have any 

questions or need additional information, please contact Assistant Director 

Stephen V. Iannucci of my staff at (202) 512-6722. Major contributors to 

this report are listed in appendix II.

Sincerely yours,

Robert H. Hast 

Acting Assistant Comptroller General

 for Special Investigations 
Page 10 GAO/OSI-99-10 Exportation of Stolen Vehicles

Appendix I

Treaties and Information Relating to Stolen 

Vehicle Recoveries in Foreign Countries ApeInxdi

Note: NICB has advised us that although the existing treaty for facilitating recovery is with only Mexico, 

the other countries have followed the spirit of the pending treaties in allowing these vehicle recoveries.

aThese countries, along with Germany (23 vehicles), Ecuador (21 vehicles), Haiti (21 vehicles), and 

Belgium (16 vehicles), comprise the top 10 countries in which stolen vehicles were located in 1998.

bInformation reflecting the number of stolen U.S. vehicles located in this country is not available.

Country Status

Number of stolen

vehicles located in the

foreign country in 1998

Number of vehicles

recovered,1996-1998

Mexicoa Active 6,345 6,011

Belize Pending b 0

Guatemalaa Pending 64 10

Dominican Republica Pending 37 33

Costa Rica Pending b 2

Panama Pending b 10

Venezuelaa Pending 55 15

El Salvador Pending b 0

Hondurasa Pending 36 0

Nicaragua Pending b 9

Polanda Pending 19 27

Russia Pending b 0
Page 11 GAO/OSI-99-10 Exportation of Stolen Vehicles

Appendix II

Major Contributors to This Report ApIexndi

Office of Special 

Investigations, 

Washington, D.C.

Kevin P. Craddock, Senior Special Agent 

Stephen V. Iannucci, Assistant Director

Barbara W. Alsip, Senior Communications Analyst

Office of the General 

Counsel, Washington, 

D.C.

Barbara C. Coles, Senior Attorney

(600429) Lret
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