TOF QUIZ Flashcards
The primary objective of PCA is to collect revenue from traders.
FALSE
The overall objectives of PCA is to assure that Customs declarations have been completed in
compliance with Customs legal requirements as well as other requirements under any other law
applicable in respect of import or export, via examination of a traders’ systems, accounting and
other business records and premises
PCA involves the examination of trader’s systems, accounting, and business records to ensure compliance with legal requirements.
TRUE
One of the objectives of PCA is to verify that the value, origin, and classification of goods are declared incorrectly.
FALSE
To verify that the value, origin and classification of goods is declared correctly and the
amount of revenue legally due has been identified and collected;
PCA ensures that specific import/export controls, such as prohibitions and restrictions, licences, and qoutas, are not applicable.
FALSE
To ensure goods liable to specific import/export controls are properly declared, including
prohibitions and restrictions, licenses, quota, etc.;
Conditions related to specific approvals and authorizations are not considered during the PCA process .
FALSE
To ensure conditions relating to specific approvals and authorizations are being observed,
e.g. pre-authenticated transit documents, preferential origin/movement certificates,
licenses, quota arrangements, Customs and excise warehouses and other simplified
procedure arrangements;
Building a good relationship relationship of trust between Customs and traders is not a goal of PCA.
FALSE
This can build a good relationship of trust between the Customs and the traders. Thus, PCA is a
means to measure and improve compliance of the traders.
PCA aims to hinder international trade movements of non-complaint traders.
FALSE
To facilitate international trade movements of the compliant traders.
PCA is synonymous with internal audit, both serving the same purpose in verifying and reviewing procedures.
FALSE
PCA should not be confused with “internal audit,” which is a mechanism to verify and review, either conducted by a company to review its own internal procedures or by Customs to review Customs’ own internal rules and procedures. Internal audits may be useful for management purposes and are an important part of an integrity programme but are quite distinct from the concept of PCA.
PCA is solely focused on measuring compliance and does not provide a means to improve it.
FALSE
PCA is a means to measure and improve compliance of the traders.
Audit-based controls in Customs control systems refer to measures ensuring the accuracy and authenticity of declarations through the examination of relevant books, records, business systems, and commercial data.
TRUE
Internal audits, whether conducted by a company or customs, are part of an integrity program and are distinct from the concept of PCA
TRUE
Each Member is required to adopt or maintain post-clearance audit to expidite the release of goods and ensure compliance with customs and related laws.
TRUE
The selection of persons or consignments for post-clearance audit should be dpne in a non-risk based manner to ensure fairness.
FALSE
Each Member shall select a person or a consignment for post-clearance audit in a risk-based manner, which may include appropriate selectivity criteria.
Members conducting post-clearance audits are not obligated to notify the audited person of the results, rights, obligations, and reasons for the results.
FALSE
Where the person is involved in the audit process and conclusive results have been achieved the Member shall, without delay, notify the person whose record is audited of the results, the person’s rights and obligations, and the reasons for the results
The information obtained in post-clearance audit may only be used within the audit process and cannot be applied in further administrative or judicial proceedings.
FALSE
The information obtained in post-clearance audit may be used in further administrative or judicial proceedings.
Members are encouraged to use the results of post-clearance audit in applying risk management whenever practicable.
TRUE
Facilitating compliant trade at the point o Customs clearance and reducing border controls are potential benefits of PCA
TRUE
One od the benefits of PCA is gaining better information on and understanding the trader’s business.
TRUE
Risk levels can be more easily assessed and reviewed through PCA, providing an opportunity to identify risks and weaknesses in trader’s system during a premises visit.
TRUE
PCA does not contribute to client education and does not focus on long-term and comprehensive compliance management.
FALSE
Benefits derived from PCA; Facilitates client education, long-term and comprehensive compliance management focus;
Customs administrators’ resources are less effectively deployed with the implementation of PCA
FALSE
Benefits derived from PCA; Customs administrations’ resources are more effectively deployed
PCA promotes the concept of voluntary compliance and self-assessment by traders.
TRUE
Suspected fraudulent activities, including cases of illicit financial flows (IFF) and trade-based money laundering (TBML) may be identified and referred to competent authorities and/or enforcement unit for appropriate action
TRUE
PCA provides a platform for evaluating continued entitlement to Authorized Economic Operator (AEO) status
TRUE
PCA and AEO validation are synonymous and serve the same purpose during the different stages of the process.
FALSE
PCA is not one to one with AEO validation/audit but they can complement each other during the different stages of the process
Validation/audit seeks to verify whether the applicant meets and continues to meet the requirements of its scope of authorization, including examinations of trader’s system.
TRUE
Feedback results from PCA cannot be used as part of the information gathering during the AEO validation process.
FALSE
Feedback results from PCA work conducted on the applicant or approved AEO can be used as part of the information gathering during the AEO validation process and vice-versa.
If a company is already an AEO, PCA should not take into account the validations to avoid duplication.
FALSE
If a company is already an AEO, any PCA should take into account the validations in order to avoid duplication.
Comprehensive Audit (Systems-based audit) focuses on specific areas of Customs, such as valuation and country of origin.
FALSE
Comprehensive audit (Systems-based audit) - type of audit looks at the entire business control environment and the impact this might have on Customs compliance
In comprehensive audit, analytical procedures are used heavily, and substantive testing is increased when the control environment and corporate governance systems are good.
FALSE
Analytical procedures are used heavily and substantive testing is reduced where control environment and corporate governance systems are good.
Focused audit (Issue-based audit) is particularly relevant for administrations with a trader-focused targeting approach.
FALSE
Focused audit (Issue-based audit) ; Mostly relevant for administrations with an issue-focused targeting approach
Post-import Transaction based-audit (TBA) involves scrutiny of individual Customs declarations before clearance, and referrals are made from the port/border post when doubts arise.
FALSE
Referrals from the port/border post when an officer has doubts concerning a particular declaration at the time of clearance.
In a post-importation TBA, a targeting team scrutinizes individual Customs declarations after clearance, selecting those with no doubts regarding their accuracy.
FALSE
The introduction of post-importation controls may prompt administrations to consider developing a post-import, systems-based audit approach along with TBA
TRUE
Risk-based selection criteria are not recommended for determining which Customs declaration with be verified in a post-importation TBA
FALSE
In each case, it is highly recommended that risk-based selection criteria are used to determine which Customs declarations will be verified.
Customs laws and regulations must define the coverage of PCA, inclusing the persons or companies subject to PCA
TRUE
The scope and coverage of PCA should be limited to only importers/exporters and declarants
FALSE
Potentially, all businesses involved in the import
and/or export of goods or in the receipt, storage, manufacture and delivery of goods subject to
Customs controls may be audited.
PCA may cover businesses involved in the receipt, storage, manufacture, and delivery of goods subject to customs controls.
TRUE
The authority and powers of Customs officials/auditos conducting PCA are not essential components for legal framework.
FALSE
Customs laws and regulations should provide the following:
definition of PCA coverage (persons/company subject to PCA)
authority and powers of Customs officials/auditors conducting PCA
obligations and rights of auditees
penalty scheme
right of appeal
Customs laws and regulations should include a penalty scheme but should not specify the right of appeal for auditees.
FALSE
Customs laws and regulations should provide the following:
definition of PCA coverage (persons/company subject to PCA)
authority and powers of Customs officials/auditors conducting PCA
obligations and rights of auditees
penalty scheme
right of appeal
Customs laws and regulations should provide officers conducting PCA with the authority to conduct audits only at the premises of the auditee
FALSE
Customs laws and regulations should provide officers conducting PCA with the authority to
conduct an audit at the premises of the auditee and at the premises of auditor.
The right to access auditee’s premises, examine business records, and inspect auditee’s premises are unnecessary powers for customs officers conducting PCA
FALSE
Necessary powers
include:
the right to access auditee’s premises;
the right to examine business records, business/trading systems and commercial data
relevant to Customs declarations;
the right to inspect auditee’s premises;
the right to uplift and retain documents and business records;
and the right to inspect and take samples of goods.
Customs laws and regulations should not include an obligation for officers conducting PCA to maintain confidentiality.
FALSE
An obligation to maintain confidentiality should also be provided by Customs laws and regulations
to keep a good relationship between the Customs and the traders.
Customs laws and regulations should not specify a duration for retaining specified documentation, information, and records.
FALSE
a requirement to maintain specified documentation, information and records. The duration for
retaining such records should be no less than the maximum period after importation or
exportation when Customs may legally demand underpaid duty and make refunds for
overpaid duty;
Auditees have a right to expect confidential treatment of their business documentation according to Customs laws and regulations.
TRUE
The right to clearance of goods at the frontier with provision of security is not a right of auditees under Customs laws and regulations.
FALSE
a right to clearance of goods at the frontier with provision of security
The scope of auditees, beyond declarants and importers, raises questions about the legal obligation for keeping records on all persons/companies designated as complementary auditees
TRUE
National legislations regarding business activities, such as income tax or commercial tax law, cannot stipulate the obligation for keeping business records on persons/companies other than those closely related to import or export transactions.
FALSE
Other national legislations regarding the business activities, such as income tax
or commercial tax law, may stipulate their obligation.
Customs administrations should regularly review the adequacy of powers available under national law and modify them if necessary to respond to new national and international commitments.
TRUE
Non-Custom legislation, such as commercial law, company law, and income tax law, is irrelevant to Customs in the course of conducting a PCA
FALSE
Other non-Customs legislation may be of relevance and interest to Customs in the course of
conducting a PCA. For example:
regulation of business entities and their activities, such as commercial law, company law,
income tax law, etc.
import/export licensing requirements
foreign currency control, etc.
obligations deriving from binding UN Security Council Resolutions: Chapter VII UN Charter
(e.g. embargos, export controls).
Import/export licensing requirements and foreign currency control are examples of non-customs legislation that may be relevant to Customs during a PCA
TRUE
Customs is not obligated to consider obligations deriving from binding UN Security Council Resolutions, such as embargos and export controls during a PCA
FALSE
Other non-Customs legislation may be of relevance and interest to Customs in the course of
conducting a PCA. For example:
regulation of business entities and their activities, such as commercial law, company law,
income tax law, etc.
import/export licensing requirements
foreign currency control, etc.
obligations deriving from binding UN Security Council Resolutions: Chapter VII UN Charter
(e.g. embargos, export controls).
A PCA program’s interface is limited to risk management and enforcement within the Customs department.
FALSE
PCA has an interface with many other areas within the Customs department, including risk
management, intelligence sharing, enforcement, debt / revenue collection and legal support
The organizational structure of a PCA program should facilitate close working and effective communication among various areas, including risk management, intelligence sharing, enforcement, debt/revenue collection, and legal support
TRUE
A centralized audit structure establishes multiple PCA units within the administration.
FALSE
Centralized audit
This structure has established a single PCA unit within the administration.
Enhanced communication. coordination, and sharing of knowledge are advantages to the centralized audit structure.
TRUE
In a decentralized audit structure, auditors of different regions may compete to perform better.
TRUE
Difficulties in physically verifying the businesses premises of traders prior to the start of the audit are disadvantages of the decentralized audit structure.
FALSE
Disadvantage of Centralized audit includes
Difficult to physically verify the business premises of trader prior to the start of the
audit; and
Decentralized audit structures are more cost and time-efffective allowing for the performance of more audits.
TRUE
