Do we have unauthorized or unapproved customs brokers? When I joined the company in 1998, we reviewed our Importer Trade Activity (ITRAC) report generated by U.S. Customs and Border Protection (CBP); and it turned out that we had a total of eight (8) customs brokers. Five (5) of them we determined were “unauthorized” and did not hold properly completed Powers of Attorney. Today, importers can and should be reviewing their Automated Commercial Environment (ACE) data for such unapproved brokers.
Did an uninformed or errant Merchant purchase something that could become problematic with CBP or other federal agencies? Individuals who perform buying or sourcing functions for the company should be well-trained on the technical aspects of our business and any special requirements or restrictions that may apply. It’s all too easy to get caught up in the glitz and lights of the product showroom and to simply forget that certain products may be restricted by Intellectual Property Right (IPR) issues or subject to anti-dumping or countervailing duties.
Did Finance pay the supplier or vendor the exact amount that was declared to CBP? If the payment amount does not match (exactly) the entered value with CBP, there’s a problem. It must be investigated, trued up and/or resolved. This is why we highly recommend that our clients perform a four-way match for every transaction; you should match the Purchase Order price, to the invoice price, to the value declared to CBP, to the actual payment amount. All out-of-tolerance discrepancies should be investigated and, if necessary, corrected with CBP.
Did a non-descript piece of correspondence from CBP get routed to the wrong department internally? You see, when CBP sends a letter it is rarely, if ever, addressed to an individual. It simply contains the company name and address, so in a big company it’s easy for the mailroom to misdeliver that letter perhaps to Tax, or Finance. And if it winds up on someone’s desk who doesn’t recognize its importance or doesn’t know where it belongs it can sit there for weeks.
Are we properly accounting for over, short and damaged (OS&D) goods? Do receiving reports match the quantity declared to CBP? Do you have a mechanism in place for the Receiving department to notify the trade Compliance department if there’s a discrepancy?
Are our brokers following our explicit entry instructions? Brokers are not perfect and routinely when there is a change of personnel mistakes are made. Do we have an adequate entry audit protocol in place to catch the vast majority of errors?
Are we exposed to potential penalties or errors that may trigger a CBP audit? As explained in last month’s article Enforced Compliance, new technology and data mining capabilities have helped CBP hone their skills at finding discrepant transactions. If your entry data contains significant errors, sooner or later CBP will find them. It’s much easier for importers to perform self-exams and Prior Disclosures than it is to endure a CBP Focused Assessment.
The bottom line is this, our business is rife with little trip wires and land mines. The unsuspecting or uneducated importer is very likely to find themselves at odds with CBP if they don’t take action to identify and self-correct errors. If you have been procrastinating now is the time to take affirmative action.
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