A Comprehensive Approach to Meeting Customs Compliance Requirements

The passage of the Customs Modernization and Informed Compliance Act (Mod Act) implemented many new regulations for importers. The Mod Act assigns Customs the responsibility for clearly defining and communicating these regulations to the trade community. The Mod Act also requires the trade community to act with Reasonable Care in meeting those obligations and responsibilities, of which there are severe penalties for non-compliance.

Internal Compliance Reviews prepare companies for the new Customs Informed Compliance environment and are recommended by Customs as an indication of exercising the new Reasonable Care standard. In addition, a thorough assessment of a company’s customs function often reveals latent opportunities for customs duty savings.

Reasonable Care: Importers now have a regulatory responsibility to exercise Reasonable Care when: classifying merchandise, establishing the value of imported merchandise (using one of the Customs approved methods), determining country of origin, determining marking requirements, maintaining an accurate recordkeeping system, and following all other provisions of the Customs Regulations. Importers can continue to use a Customs Broker to assist in the above obligations, but no longer can importers rely solely on the Customs Broker to ensure compliance. The importer is now ultimately responsible.

Statutory and Regulatory Changes: The Mod Act shifts the burden of knowledge of the regulations directly to the importer. Importers are now directly responsible for self-education and compliance with Customs laws.

Customs Business Process: The customs function should be clearly defined through solid written procedures. These procedures must be maintained and internal controls must be in place to ensure the continued reliability of the system. Recordkeeping must be coordinated among all departments that affect the customs function.

Compliance Assessments: Customs is currently conducting Focused Assessment Reviews on importers. Companies that fail to meet compliance standards are required to initiate compliance improvement plans, which can be time consuming, resource consuming, and the reviews can result in severe penalty assessment. We perform compliance reviews for our clients as well as assist them through the formal Focused Assessment process.

Integrated Compliance Strategies