Transcript Import Auditing and Self Assessments

Increased Enforcement Activities
“How to Prepare & Respond”
WMTA Breakfast
Wednesday, May 20, 2009
What We’ll Cover Today

What Does Customs Expect?

Things To Look Out For



Maintaining Audit Trail




Basic Entry Review
Identifying Discrepancies
Verification Checklist
Additional Back-up Information
Filing & Recordkeeping Protocol
Assessments



Internal
Quarterly
Annual
Recommended Reading
See Customs Publication Titled:
“What Every Member of the
Trade Community Should Know About:
Reasonable Care
(a checklist for compliance)”
February 2004
What Does Customs Expect?

Be informed & compliant on issues relating to the following core areas:






Review every single transaction?


Yes
Perform periodic audits of your import operations?



Classification
Valuation
Special Programs
Origin
Recordkeeping
Internal
Third party
Maintain audit trail
Things To Look Out For

Basic Entry Review

Ensure that all required documents are present:






HTSUS Classifications



Broker Invoice
CF-7501 (Entry Summary)
Commercial Invoice
Special Program Certificates (NAFTA, etc.)
Special Program Declarations (e.g. Assembly Declaration, Textile Declaration, etc.)
How do you classify?
Can you legally defend your classifications?
Entered Values

Cost Construction & Reporting

Duties Paid

Special Program Indicators (i.e. MX for NAFTA, 9802 & 9801, etc.)
Identifying Discrepancies

Material vs. Non-Material Errors

Material Errors Include:
 Value Adjustments (greater than $20.00)
 Origin Changes
 HTSUS Code Changes
 Special Claim Changes
 Quantity Changes
 Incorrect MID

Non-Material Errors Include:
 Primarily Value Adjustments


Resulting in little or no duty difference (e.g. < $20.00)
Quantity and Weight Adjustments

If they do not affect duty and the difference is less than 5%)
Audit Trail

Import Entry Verification Checklist

Create a simple form in Excel or Word that contains:








Entry Number
Invoice Number
Entry Date
Broker Reference Number (as applicable)
Total Duty Paid
Country of Origin
Final Entry Package Documents Received (from broker)
Verify Import Data Elements for accuracy / compliance:





Classification
Special Claims
Quantity
Value
Etc. (match commercial invoice to CF-7501)
Additional Backup Information

How was the classification determined?

If a special program was claimed is all of the support documentation
available?

Are the values declared accurate?

Are all the required declarations attached and properly filled out?

Do I have all my required certificates of origin?
Filing & Recordkeeping Protocol

Import Entry Verification Checklist

Broker Invoice

CF-7501

All Commercial Invoices

All Special Program Declarations
Reviews & Assessments

Ongoing Reviews


Internal (“DIY”)
Quarterly Assessments (3rd Party)

Review of import entry documentation packages; specifically:




Entries with NAFTA claims
Entries with 9801/9802 claim
Entries with no Special Program claims (general entries)
Annual Assessments (3rd Party)

Validate all import compliance procedures for accuracy including:



Customs Compliance Manual
Supporting Documents (e.g., checklists, guidelines, etc.)
Flow Diagrams
Thank you…
2297 Niels Bohr Court #114 ▪ San Diego CA 92154
Tel. 619.671.0376
www.zissergroup.com