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Printer-Friendly Frequently Asked Questions: Customs Compliance
General Questions
- Why do Customs & Border Protection (CBP) and the Canada Customs and Revenue Agency (CCRA) perform audits?
- The United States Customs Modernization Act (Mod Act) and the Canadian Customs Act shifted the legal responsibility for Customs compliance activities to importers. It is the responsibility of importers to declare value, classification, duty rate and other information for every item imported into the US or Canada.
The CBP and the CCRA use audits to test an importer’s ability to fulfill these responsibilities.
- What are the consequences of an audit?
- If Customs determines that an importer is fulfilling its legal responsibilities and that it has adequate systems to ensure future compliance:
- The audit process ends efficiently and positively.
- The company will likely receive minimal inspections in the future.
If Customs determines that a company is not in compliance or that it does not have adequate systems to ensure future compliance:
- The importer will be required to develop a Compliance Improvement Plan.
- The importer will receive followup audits to re-measure compliance and re-evaluate systems and processes.
- Future inspections will occur at a higher than average rate.
- Penalties may be issued.
- What can be done to prepare for a compliance audit?
- Importers can initiate a compliance evaluation using individuals with the experience and knowledge to:
- Review recordkeeping, classifications, valuations, special duty programs and all other aspects of a company’s compliance activities relative to current requirements
- Recommend improvements and redesign processes and procedures
- Assist you in ensuring that a compliance evaluation results in better, more compliant, operations
A high-quality, comprehensive compliance evaluation should result in faster and more satisfactory customs audits, including:
- Fewer future inspections
- Less post-entry activity
- Lower risk of penalties
- Are there other benefits from compliance evaluations?
- Yes. High-quality compliance evaluations programs often result in finding cost-savings opportunities for duty drawback, special duty programs, NAFTA eligibility, and more.
- How can FedEx Trade Networks help my company with customs compliance?
- FedEx Trade Networks offers a number of services that can help companies prepare for Customs audits and improve their compliance processes and systems, including:
Diagnostic Evaluations. We will sample transactions, assist with process improvements and corrective actions, document procedures, and assist with a Customs Compliance Audit.
Customs Compliance Manuals. We will help you develop compliance manuals detailing procedures, performance requirements and recordkeeping guidelines.
As your advisor in international trade, FedEx Trade Networks will design and execute a compliance evaluation program to help you achieve your goals for compliance process efficiency and cost savings.