A focused assessment is an audit by U.S. Customs and Border Protection (“CBP”) that evaluates an importer’s internal controls for all CBP related transactions (going back to a maximum of five years). Further, CBP determines the importer’s level of compliance with the Customs laws and regulations. If a company is not found to be successfully compliant, the company will be required to put in place a compliance improvement plan and tender all monies owed to CBP. Our firm offers guidance to importers in complying with the Focused Assessment program to reduce risks and develop strong Customs compliance measures.
A Customs Audit i.e. Focused Assessment is an investigation conducted by Customs officials on a company’s compliance with customs regulations. The purpose of the audit is to ensure that the company adheres to the customs laws in the country of trade. The audit process helps Customs identify potential risks and vulnerabilities in a company’s customs compliance program and take remedial measures where necessary. There are different types of customs audits, but the most common one is the Focused Assessment (FA).
A Customs Audit i.e. Focused Assessment (FA) is a comprehensive audit that Customs officials conduct to evaluate a company’s compliance with customs regulations. It is a risk-based process that consists of three phases: pre-assessment, assessment, and post-assessment. The pre-assessment phase involves a review of the company’s customs compliance program, including policies, procedures, and records. The assessment phase comprises an on-site investigation to determine the company’s adherence to customs laws and regulations. The post-assessment stage involves the issuance of a report outlining the findings of the audit and any necessary corrective actions.
A Customs Audit i.e. Focused Assessment, particularly an FA, can be a rigorous process for a company. However, non-compliance with customs laws can result in severe consequences, such as penalties, fines, and suspension of business operations. Therefore, companies must demonstrate a high level of commitment and readiness to comply with customs regulations during the audit. Businesses need to establish a strong customs compliance program that fosters a culture of compliance and provides proper training and resources to employees.
An effective customs compliance program must include periodic internal audits to identify and address compliance issues proactively. Internal audit ensures that a company’s customs compliance program is working and meets its objectives. It is also essential for a company to have strong internal controls to mitigate the risks associated with non-compliance. These controls include process automation, for example, customs clearance software that can help companies expedite the clearance process while providing customs authorities impenetrable visibility.