Chapter 9. Customs and Border Protection's Examination of Importers' Operations: The Focused Assessment
Author | Michael D. Sherman |
Pages | 179-190 |
CHAPTER 9
Customs and Border Protection’s
Examination of Importers’ Operations:
The Focused Assessment
MICHAEL D. SHERMAN
OVERVIEW H
“We are from the government, and we are here to help you.” That sentiment
is behind what, benignly, is called a Focused Assessment—an audit conducted
by CBP auditors that seeks to determine the adequacy of an importer’s internal
controls, to ascertain the potential areas of risk of an importer’s noncompliance
with CBP laws and regulations, and to develop improved internal compliance
policies and procedures for the future. To a real extent, it is true. But one other
“small” purpose of a Focused Assessment must be recognized for what it is—to
collect money for violations if it is determined that the proper amount of duties has not
been paid and to seek penalties when CBP thinks it appropriate.
The underpinnings for Focused Assessments are the Mod Act, which was
introduced in Chapter , “Introduction and Overview,” and the need for more effi-
cient use of CBP personnel in fulfilling its traditional trade functions, when CBP’s
mission was enhanced regarding border security after the events of September ,
200. A Focused Assessment allows CBP to take advantage of the formal statutory
obligation placed on importers under the Mod Act to exercise “reasonable care,”
with its implicit recognition of the need for appropriate internal controls. CBP
wants an importer to police itself. The premise is straightforward. If in CBP’s
assessment, the company is doing a good job regarding all of its transactions
through the adoption—and implementation—of an effective internal compliance
program, CBP will minimize its scrutiny of individual transactions. As a high-level
CBP official has said: “We know from experience that companies with good inter-
nal customs controls are much more likely to be compliant and that companies
without sufficient system controls pose a high risk to Customs.”
CBP has further pointed out that when the Focused Assessment program
started, importers without adequate internal controls, on average, had duty liabil-
ities ten times higher than importers with adequate internal controls. Of course,
an importer and CBP generally have very different views as to what is “sufficient”
or “adequate.” Nevertheless, having an effective internal compliance program is a
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