CBP Updates COAC on its Focused Assessment and Importer Self-Assessment Programs
The Departmental Advisory Committee on Commercial Operations of the Bureau of Customs and Border Protection (COAC) held a quarterly meeting on February 6, 2004 in Washington, DC to discuss, and receive updates from U.S. Customs and Border Protection (CBP) officials on, various customs and trade issues.
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This is Part III of a multi-part series of summaries of the February 6, 2004 COAC meeting and focuses on CBP's Focused Assessment (FA) and Importer Self-Assessment (ISA) programs, highlights of which are provided below. See future issues of ITT for additional summaries.
Focused Assessments (FAs)
During the February 6, 2004 meeting, CBP sources provided COAC members with an update on the Focused Assessment (FA) program.
(CBP has previously stated that an FA is a compliance audit, conducted by CBP on selected importers, which is based on risk management principles. FAs replaced CBP's Compliance Assessments (CAs) on October 1, 2001. CBP states that under an FA, a Pre-Assessment Survey (PAS) is conducted to evaluate a company's internal controls over customs operations and, if significant control weaknesses are found, CBP would then use Assessment Compliance Testing (ACT) to measure only those areas where weak controls indicate a significant risk of non-compliance or loss of revenue. CBP states that if a loss of revenue or non-compliance for one or more of the areas tested is significant, CBP will collect the lost revenue and recommend a Compliance Improvement Plan (CIP) for that company.)
CBP has completed 183 PAS, 5 ACT, and 6 follow-ups. During its update regarding the FA program, CBP stated that it has completed PAS for 183 companies (which has an average cycle time of 6-7 months). CBP further states that it has completed ACT for five of those 183 companies (which has an average cycle time of 9-10 months).
CBP further states that of those companies for which FAs have been completed, six have already had a follow-up by CBP.
Discrepancies continue to include valuation, classification, 9802, GSP, etc. According to CBP, most discrepancies in FAs continue to be found in the areas of valuation, classification, HTS 9801 and 9802, and the Generalized System of Preferences (GSP) program.
CBP to work with trade to resolve problems with FA process. During the meeting, COAC members expressed concerns over certain FA-related issues such as (1) further clarification of the treatment of ultimate consignee transactions in FAs; (2) whether certain audit offices are accelerating the initial conference processes so that the FA advance conference (which is supposed to occur first) resembles an FA entrance conference (which is supposed to occur separately, at a later date); (3) etc. CBP sources responded to COAC's concerns by promising to work with the trade to resolve these and other issues.
Importer Self-Assessment (ISA)
CBP sources also provided COAC with an update on its voluntary Importer Self-Assessment (ISA) program during the February 6, 2004 meeting. CBP sources stated that, to date, there have been 88 applicants for its ISA program and that of those 88 applicants, 18 have been approved to date.
CBP sources noted that those companies that have been approved for the ISA program are large and medium-sized companies that represent a variety of industries, including pharmaceuticals, textiles and apparel, aerospace, etc.
(According to Customs, ISA is a joint government-business initiative that allows eligible importers to assess their own compliance with Customs laws and regulations. Customs states that ISA continues the self-assessment principles of its now-terminated Importer Compliance Monitoring Program (ICMP), while relying on new methodologies that provide upfront benefits and a more flexible approach. Customs has previously stated that once an importer volunteers for and is accepted into the ISA program, that importer becomes eligible for various benefits, including (partial list): exemption from comprehensive compliance audits, consideration of an importer's participation in ISA in the disposition of cases involving civil penalties or liquidated damages, coverage of multiple business units, etc.)
See ITT's Online Archives or 02/10/04 and 02/12/04 news, 04021015 and 04021205, for Parts I and II of this multi-part series of summaries on the February 6, 2004 COAC meeting.