Customs

1
Customs Border Protections Goal of
Compliance (Regulatory Audit s Role)
Tom Jesukiewicz 10-21-05
2
Regulatory Audit Charter

• RAD charter was established by the Customs
  Commissioner's directive dated June 14, 1973.
• RAD provides Customs with a capability to verify
  transactions and related claims of importers,
  carriers, and their agents through on-site audits
  of the records, accounts, and operating
  facilities of such persons and companies.

3
CBPs Goal
Continuing Customs Compliance
4
CBPs Definition of Risk

• Risk is the degree of exposure to the chance of
  non-compliance or violation of laws that would
  result in injury or loss to the government or
  public.
• Risk is anything that threatens our ability to
  accomplish our mission.
• Webster definition
• Possibility of suffering
  harm or loss Danger

5
Health - Focus on High-Risk
Heart Disease
Risk
High Cholesterol
Family History
Obesity
6
Trade - Focus on High-Risk
Total Imports
Compliance Threat
Material Discrepancies
Priority Trade Issues
Major Accounts
7
Priority Trade Issues

• Textiles/Wearing Apparel
• Intellectual Property Rights
• Agriculture
• Revenue
• Penalties
• Anti-Dumping/Countervailing Duties

8
Types of Audits

• Importer (Focused Assessment)
• Agriculture new area
• IPR new area
• Fraud Money Laundering
• Bonded Warehouse
• NAFTA, GSP, CBI, IFT
• Customs Broker
• Foreign Trade Zone
• Drawback

9
Focused Assessment Program

• A systematic risk-based approach to auditing in
  which a team evaluates a companys CBP-related
  internal control to determine the likelihood of
  non-compliance and to assess risk.
• Pre-Assessment Survey (PAS)
• Identify risks to CBP and evaluate the adequacy
  of internal control over CBP activities to
  determine if risk is acceptable.
• Assessment Compliance Testing (ACT)
• Transaction testing used to measure compliance
  and/or determine loss of revenue.

10
Focused Assessment Areas

• Value
• Classification
• Anti-dumping/Countervailing Duties
• Tariff 9801 and 9802 provisions
• Generalized System of Preferences and other
  Special Trade Provisions
• Transshipment
• Intellectual Property Rights
• Foreign Trade Zone
• Bonded Warehouse
• Health Safety

11
Benefits of Effective Internal Control

• Is the first line of defense against
  noncompliance with CBP laws and regulations.
• Provides predictability concerning CBP-related
  transactions.
• Demonstrates commitment to compliance.
• Links management objectives and results.
• May reduce duty overpayment and decrease risk.
• Is the foundation for compliance in CBP programs.
  (C-TPAT, ISA FA, etc.)

12
Best Practices

• 1. Management Commitment
• 2. Establish Compliance Goals
• 3. Develop Formal Policies Procedures
• 4. Establish Training Programs
• 5. Conduct Internal Control Reviews
• 6. Create a CBP Compliance Group
• 7. Access to Executives for Needed Resources
• 8. Develop Compliance Requirements for
  Suppliers
• 9. Establish a Record Keeping Program
• 10. Partner with Customs Border Protection

13
Evaluate Your Controls

• Are CBP control procedures formally documented to
  ensure accuracy of CBP information?
• Are written policies and procedures that relate
  to CBP issues approved by Management?
• Are CBP related policies and procedures reviewed
  and updated periodically by responsible company
  officials?
• Within the written control procedures, are duties
  assigned to a position rather than a person?
• Are internal controls periodically tested,
  results documented and appropriate corrective
  action taken?

14
Evaluate Your Controls

• Does company identify, analyze, and manage risk
  rated to CBP issues?
• Has the company identified any risks related to
  CBP issues and implemented control mechanisms?
• Do company employees responsible for ensuring
  that accuracy of CBP related information have
  adequate knowledge and training?
• Does the company have adequate interdepartmental
  communication about CBP?

15
Web-site http//www.cbp.gov
TJ
15