{"id":5270,"date":"2021-07-22T15:24:18","date_gmt":"2021-07-22T19:24:18","guid":{"rendered":"https:\/\/diaztradelaw.com\/?page_id=5270"},"modified":"2026-03-02T09:04:58","modified_gmt":"2026-03-02T14:04:58","slug":"customs-audits","status":"publish","type":"page","link":"https:\/\/diaztradelaw.com\/services\/importing\/customs-audits\/","title":{"rendered":"Customs Audits"},"content":{"rendered":"

Under the Customs Modernization Act of 1993, importers of record have a responsibility to use \u201creasonable care\u201d when declaring the classification, valuation, country of origin and use of duty preference programs for merchandise upon entry to the U.S. CBP often verifies compliance through the use of audits. A customs audit can be one of the most stressful and disruptive events an importer faces. CBP has increased its enforcement efforts, and companies of all sizes are being selected for audits and RASAs. The consequences of a poorly managed audit can include significant penalties and long-term compliance burdens.<\/span><\/p>\n

Types of audits an importer may face:<\/span><\/p>\n

Import Specialist Visit<\/b><\/h4>\n

While technically not an audit, importers may receive a visit from a CBP import specialist. Visits generally involve an on-site inspection of an importer\u2019s facilities, records, or cargo to ensure compliance with U.S. trade laws. If importers are not prepared for a visit, or if the specialist uncovers non-compliant practices, the import specialist may recommend a full audit to CBP\u2019s Trade Regulatory Audit team.<\/span><\/p>\n

Focused Assessment (FA)<\/b><\/h4>\n

A Focused Assessment (FA) is a targeted audit of sample import transactions and consists of an extensive review of the importer\u2019s records, including an in-depth look at a selected number of \u201cwalk-through entries\u201d (there is a five-year statute of limitations period) and documentation to prove the importer has a system in place to comply with Customs laws and regulations. Typically CBP notifies an importer that they are the subject of an FA via phone and then by mail or e-mail.<\/span><\/p>\n

\u00a0A risk-based approach is used in selecting candidates for FAs. Key considerations for risk exposure include size and import activity, complexity in import activity, the existence of \u201cred flags,\u201d high-risk trade areas, priority trade areas, unsatisfactory RASA results, suspected customs errors, and referrals from other government agencies. When FAs were first introduced, selection was more likely for large importers. However, CBP now regularly looks at small- and medium-size importers.<\/span><\/p>\n

While it is possible that CBP will find no violations during the FA, this is rare. At a minimum, CBP will expect the importer to: (i) complete a self-assessment to calculate any revenue lost and pay duties owed; and (ii) develop and implement a plan to correct the areas of deficiency. If CBP finds negligence, gross negligence, or fraud, they may decide to initiate a penalty case against the importer.<\/span><\/p>\n

Risk Analysis and Survey Assessments (RASA)<\/b><\/h4>\n

RASAs are technically not an audit. These assessments are considered a non-audit service authorized under 19 U.S.C. \u00a7 1509. A RASA is a quick assessment of a company\u2019s operations focused on a specific area of concern (e.g., intellectual property, anti-dumping and countervailing duties, valuation, etc.) CBP utilizes RASAs to obtain information about import activities without having to commit the substantial amount of time and resources that would be required when conducting a full audit. RASAs can evolve into full-blown audits if CBP is not satisfied with the importer\u2019s responses to the RASA questions.<\/span><\/p>\n

Other Audits<\/b><\/h4>\n

For both smaller importers, and those with suspected compliance issues, Customs may conduct a more targeted audit that concentrates on a specific area of compliance risk, such as classification or valuation. Because of their limited scope, these audits are generally less burdensome than a full Focused Assessment. CBP will review an importer\u2019s processes and examine selected transactions in a manner similar to how sample entries are evaluated during the pre-assessment survey (PAS) phase of an FA. The precise objectives of this type of audit can vary based on the circumstances and the compliance concerns CBP has about a particular importer.<\/span><\/p>\n

Companies engaged in higher-risk transactions are often the subjects of these smaller audits, which typically stem from referrals by CBP and Homeland Security offices. After completing the audit, CBP issues a written report outlining its findings and indicating whether the importer\u2019s practices present an acceptable or unacceptable risk.<\/span><\/p>\n

Informed Compliance Notification Letters<\/i><\/b><\/h4>\n

In lieu of initiating an audit, CBP may also issue informed compliance notification letters to importers. The receipt of an informed compliance notification letter means that CBP has identified issues with the importer\u2019s transactions and is \u201cstrongly considering\u201d the company for a comprehensive audit. If an importer receives this letter, they should immediately conduct an internal risk assessment, review internal controls, and consider filing a<\/span> prior disclosure<\/span><\/a> (PD). We strongly recommend retaining counsel at this stage.<\/span><\/p>\n

Audit Process<\/b><\/h4>\n

CBP is required to provide importers with advance notification of their intent to conduct an audit. CBP must also provide a reasonable estimate of the time it will take to complete the audit. Importers have the right to request an entrance conference, during which time CBP will discuss the audit\u2019s purpose, scope, and duration.<\/span><\/p>\n

CBP audits generally include sampling where auditors review select import transactions and compare the reported information to the company\u2019s internal records. Auditors also examine financial transactions to ensure customs values were properly declared.<\/span><\/p>\n

After completing the audit, CBP will hold a closing conference with the importer to explain their findings. CBP will provide a report to the importer outlining their findings and whether or not the company was compliant with CBP regulations. If the importer is found to be non-compliant, CBP will generally require the importer to create a plan outlining corrective measures and may schedule future testing.<\/span><\/p>\n

How Can Diaz Trade Law Help?<\/b><\/h4>\n

Diaz Trade Law assists in ensuring our clients have adequate compliance systems in place to comply with U.S. Customs laws and regulations and successfully navigate Customs audits.<\/span><\/p>\n

Our team works with importers to assess risk, strengthen internal controls, and ensure you meet CBP\u2019s \u201cReasonable Care\u201d and \u201cInformed Compliance\u201d standards. We can assist with internal compliance assessments, reasonable care review, staff training, broker management review, recordkeeping compliance, and more.<\/span><\/p>\n

If CBP has already notified you of an audit or request for information, we can help you respond and navigate the audit process. We assist with: response strategy, document review, communication with CBP, mitigation strategies, appeals, and post-audit support. Don\u2019t go through an audit or RASA alone!<\/span><\/p>\n

Audit Success Stories<\/b><\/h4>\n