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U.S. Customs Ratchets Up its Enforcement Efforts – Is Your Company Ready?

Four steps every company should take right now to ensure a smooth import compliance process for the future.

After dedicating much of the last several years to modernizing its business processes and launching the Automated Commercial Environment (ACE)—the primary system through which the trade community reports import and export data, and the government determines import admissibility—U.S. Customs and Border Protection (CBP) is now putting a greater emphasis on enforcement. For importers, this renewed attention to import compliance could present new challenges and obstacles.

In CBP Signals Change Ahead With New Regulatory Audit Procedure, Braumiller Law Group points out that CBP Office of Regulatory Audit officials recently discussed changes to their approach to auditing importers for compliance, along with the possibility of issuing penalties for non-compliance. For example, officials explained that while the Focused Assessment (FA) program is not going away, more “audit surveys” and “quick response audits” will be performed in lieu of the traditional FA.

“If a company gets an informed compliance notification via email or a telephone call, explained Reg Audit, that company is a likely candidate for an audit survey,” the law firm notes. “On the other hand, if a company receives a letter informing and referring them to relevant Informed Compliance Publications (“ICP”), it means Regulatory Audit is strongly considering that company for a comprehensive audit as a part of its National Audit Plan.”

More Data to Work With, More Opportunities to Explore 

ACE provides CBP with a more integrative platform for trade data, enabling this renewed focus on compliance. Equipped with more data and information, the department can now review, extract, manipulate, and “flag” data. This gives CBP additional insights into specific transactions and allows it to quickly identify potential issues and areas of non-compliance.

“All of the new data and functionality that’s at CBP’s fingertips is helping it to set up certain criteria for running systematic reviews of transactions,” said Scott Robbins, DB Schenker’s Senior Director of Customs Services, “and then digging down into the potential problem areas.”

Additionally, the Trade Facilitation and Trade Enforcement Act of 2015 is pushing forward CBP’s efforts to not only ensure regulatory compliance, but also report to Congress on its findings and actions. So not only does the department have the tools at its avail and more time on its hands as the conversion to ACE nears completion, but it’s also being governed by law to increase its enforcement efforts in this area. Combined, these factors could all create significant challenges for any importer that’s not paying close attention to import compliance in the coming months.

Four Steps to Take Right Now 

With CBP moving back into enforcement mode, we’re advising importers and exporters to pay particular attention to these renewed levels of oversight and the potential for both spot and full-blown customs audits. Knowing that compliance is often an “out of sight-out of mind” consideration for companies that are busy managing their day-to-day operations, now is a good time to stop, take a step back and reevaluate your programs and make sure you’re keeping pace with customs’ new enforcement processes and requirements.

Here are four steps that every importer should be taking right now:

Develop a solid compliance program. Typically reserved for very large organizations, compliance programs can help companies of all sizes effectively deal with import and export compliance. “Many small to midsized firms haven’t made this commitment yet,” said Robbins, “but even smaller companies must monitor their own compliance—and that of their vendors—or risk the financial burden of customs knocking on their door.”

Stay up to date on the requirements. CBP’s website is a good starting point for companies that want to know the Basic Importing and Exporting requirements. Both CBP and the importing/exporting community have a shared responsibility to maximize compliance with laws and regulations, and in carrying out this task CBP encourages importers/exporters to become familiar with applicable laws and regulations.

Seek out the advice of a knowledgeable trade professional. Here at DB Schenker, we help companies evaluate their own internal compliance programs and effectively identify—and fix—any pitfalls within those programs. “It’s not unusual for companies to overlook problem areas,” said Heather Burke, DB Schenker’s Director of Trade Services, “either because they’re too close to the information or because they lack knowledge of the requirements to do it on their own.”

 Don’t assume past history will repeat itself. Assuming that your company’s practices are compliant because they haven’t been told by customs there is an issue is dangerous (and potentially expensive) business. “Regulatory compliance is an area where many firms fall short because of a perception of low risk that customs will scrutinize its transactions,” said Burke. “Now, customs is starting to knock on importers’ doors. The whole industry is changing and companies must respond accordingly or risk penalties and fines.”

For more information about how DB Schenker can help ensure a smooth import and export compliance for you and your team, please contact your sales representative or contact DB Schenker directly at (800) 225-5229 or visit our website.


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