volume 1 Flashcards
An importer, exporter, one who engages in transit or the like,
who has a relationship with Customs
trader
A entity selected for an audit, not limited to importers, as it can
include exporters or transportation companies, Customs broker
etc.
Auditee
Collective term for commercial or industrial enterprises usually
referred to as the Customs’ counterpart
business sector
Group of productive or profit-making enterprises
Industry
Commercial enterprise, regardless of any relationship with
Customs
Company
One who is involved in or affected by a course of action
Stakeholder
A business pattern with particular commercial / physical distribution of an import / export cargo, including the payment conditions
Whole business
transaction / transaction /
transaction pattern
Statement of an administration’s overall intentions and
direction regarding PCA
PCA policy
Scheme/strategy for audits specifying the objectives, scope,
methodologies and assignment of auditor/team members for the audit
Audit Plan
An audit conducted at auditors’ premises usually by calling
Desk audit
An audit conducted at the premises of the auditee
on site audit
overall objectives of PCA
is to assure that Customs declarations have been completed in compliance with Customs legal requirements
Objectives
- 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; - To ensure goods liable to specific import/export controls are properly declared, including
prohibitions and restrictions, licenses, quota, etc.; - 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; and - To facilitate international trade movements of the compliant traders.
means measures by which the Customs satisfy themselves as to the accuracy and authenticity of declarations through the examination of the relevant books, records, business systems and commercial data held by persons concerned.
audit based control
Benefits derived from PCA
Compliant trade is facilitated at the point of Customs clearance and border controls can
be reduced;
Enables Customs to gain better information on and understanding of traders’ business;
Risk levels can be more easily assessed and reviewed: a premises visit provides the opportunity to identify risks and weaknesses in traders’ systems;
Facilitates client education, long-term and comprehensive compliance management
focus;
Customs administrations’ resources are more effectively deployed;
Customs can promote the concept of voluntary compliance and self-assessment;
Suspected fraudulent activities including cases of illicit financial flows (IFF), trade-base
money laundering (TBML) may be identified and referred to competent authorities and/or
enforcement unit for appropriate action;
Provides a platform for evaluating continued entitlement to Authorized Economic Operator status, where applicable.
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 asudit
take note : PCA is not internal audit
Take note
PCA is not one to one with AEO validation/audit but they can complement each other during
the different stages of the process.
If a company is
already an AEO, any PCA should take into account the validations in order to avoid duplication.
This type of audit looks at the entire business control environment and the impact this might have on Customs compliance.
This kind of
audit takes place at the premises of the auditee (field audit).
Mostly relevant for administrations with a trader-focused targeting approach2.
Comprehensive audit (Systems-based audit)
This type of audit concentrates on one or a few areas of Customs e.g. valuation, country of origin etc.
Mostly relevant for administrations with an issue-focused targeting approach
Focused audit (Issue-based audit)
administrations that have newly implemented post-importation
controls may consider introducing checks on individual transactions. This can work in two ways:
1) Referrals from the port/border post when an officer has doubts concerning a particular
declaration at the time of clearance. If it is deemed that significant duty may be at stake, an
enquiry is then referred to the appropriate Customs office to further examine the declaration,
normally in consultation with the importer/exporter. The goods in question may be released or
other action may be taken as appropriate.
2) A targeting team scrutinizes individual Customs
declarations after clearance and selects those where doubts arise regarding their accuracy.
Post-importation Transaction-based audit (TBA)
Legal framework and essential powers
To facilitate PCA, it is necessary to implement legislation which provides Customs with the legal basis to conduct an audit and also sets out the rights and obligations of the auditee.
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
The scope and coverage of PCA - namely, which persons may be subject to an audit - should be
clearly defined in Customs laws and regulations.
This may include:
importers/exporters;
declarants;
consignees of the imported goods;
owners or beneficial owner of the imported goods;
subsequent acquirers of the imported goods;
Customs clearing agents of the imported/exported goods;
storage agents of the imported/exported goods;
transporters of the imported/exported goods; and
other persons/companies directly or indirectly involved in the transaction of the imported
or export goods.
