What is a Focused Assessment?
An FA is a comprehensive risk-based audit of importers by Customs. It involves a review of the internal control over import activities to determine if the importer poses an acceptable risk for complying with CBP laws and regulations.
Criteria used to choose importers
- Import Volume, Value, Nature of Imports
- Primary Focus Industries – Electronics, Textiles, Automobiles
- Specific product countries of origin or manufacturers
- Use of Special Trade Programs –
- Free Trade Agreements
- Antidumping & Countervailing Duties
- Generalized System of Preferences (GSP)
- Drawbacks (9801 / 9802; when US products are re-imported into the country)
- Import Specialist / Inspector Referrals
If your company is selected, you will receive a call from a CBP auditor in October. The initial call simply lets you know there is a possibility of an audit. At that time it is highly recommended that you begin reviewing your internal processes. A second call between October – June call will confirm your company’s participation. At that point the CBP auditor will explain what is needed to begin the audit.
Three Phases of the Focused Assessment
- Pre-Assessment Survey – CBP will make an assessment of the company’s internal CBP compliance controls. This will include an in depth questionnaire, review of accounting procedures, entrance conference, walkthroughs and interviews with various company department staff.
- Assessment Compliance Testing – once the CBP auditors have reviewed the company’s controls they will set up sample testing to ensure the controls are working. Based on the pre-assessment survey and testing they will make recommendations to improve compliance.
- Follow up Audit – CBP will return to verify recommendations and proper controls have been implemented and are working as designed.
If you get the call in October, don’t panic! Get started!
- Review your current processes related to importing and Customs compliance
- Are they current & updated regularly?
- Review your internal controls
- How are your import processes being recorded and evaluated?
- What kind of risk assessments are considered in regards to importing and Customs compliance?
- Are documents on shipment values and costs being kept for recordkeeping?
- How are regulations and compliance documents being handled?
- Evaluate communication between company departments that are involved in any import transactions
- Transparency: communication between departments is considered essential for successful compliance controls
After the assessment
Once the Customs audit is successfully completed (i.e. you passed!), your company can begin transition to the ISA (Importer Self-Assessment Program). The ISA program is a self-audit which can save your company money and improve efficiency while achieving regulatory compliance.
More information can be found at: http://www.cbp.gov/trade/audits/focused-assessment
Look out for an in-depth look at the three phases of the Customs audit, coming soon!