Internal Trade Compliance Audits

Customs and Border Protection recovers a tremendous amount of revenue through Trade Compliance Audits. This process can be quite a nightmarish for an importer without the proper trade compliance procedures in place. Customs targets trade compliance in the following areas:

  • Anti-Dumping & Countervailing Duties
  • Free Trade Agreements
  • Tariff Classifications
  • Valuation of Merchandise
  • Chapter 98

The Mod Act was passed with aim of increasing the voluntary compliance with customs laws and improvements to customs enforcement. It introduced two new customs concepts known as “informed compliance” and “shared responsibility.” These concepts are premised on the idea that to maximize voluntary compliance with Customs laws and regulations, the trade community needs to be clearly and completely informed of its legal obligations. Accordingly, the Mod Act imposes a greater obligation on Customs to provide the public with improved information concerning the trade community’s responsibilities and rights under Customs and related laws. In addition, both the trade and Customs share responsibility in carrying out import requirements.

Every importer should be able to exemplify a shared responsibility and transparency of these points as it is critical to their compliance standings in the eyes of CBP.

IITC assists with Self- Auditing!! It is the best way to be prepared when CBP comes knocking on the door. Most importers have heard of CBP audits, but do not know what to expect until auditors arrive. Preparing for audits is as simple as getting to continuously monitor the above-mentioned trade compliance areas that CBP targets. Assessing which imports represent the highest risk will allow for proper import risk management.

ITC assist you in identifying what it is that represents high risk for noncompliance. Once that is identified….INTERNAL AUDITING BEGINS. There is no magic number or percentage of audits which should be conducted. Audits should be conducted at least quarterly, whether targeted or random audits.

During the audit process, IITC will also review your internal records, SOPs, databases, and the entry documents themselves for any discrepancies. Additionally, we will document your audit process to demonstrate to CBP that the importer is conducting due diligence in its efforts to stay compliant.

This will prepare you for the time WHEN you do receive and official CBP audit.

Factory Free Trade Agreement Verification Audits

As a textile/wearing apparel importer making claims for duty free entry under a Trade Preference Program (TPP) or Free Trade Agreements (FTA), you are responsible for the validity of those claims. You take a huge risk if you choose a foreign factory to produce your merchandise and that factory does not know the requirements for entry under the trade preference program. Assuring that the factory you choose is knowledgeable of the rules and regulations relating to the program will ensure that your claims are not denied.

As a foreign factory producing merchandise being entered duty free under a Trade Preference Program (TPP) or Free Trade Agreements (FTA) you take a huge risk if you are not knowledgeable of the requirements of the program. Officers from U. S. Customs and Border Protection conduct on-site visits to foreign factories to verify the claim. If your factory is unable to substantiate a claim, you find yourself in a panic because of the possibility of losing lucrative business with U. S. importers.

The Solution:

Trade Preference Program or Free Trade Agreements Training: ensuring that the factory management is knowledgeable of the requirements of the TPP/FTA.

Factory audits: ensure that the factory is executing the trade preference program rules and regulations relating to the program so that the importation will qualify.

Quality checks: verify the quality of your products and that the proper components were used while they are still in the production phase.