CBP “informed compliance” letters place heightened responsibilities on importers

CBP letters to importers about informed compliance

U.S. Customs and Border Protection (CBP) has been sending letters to importers about “informed compliance,” and information that is intended to assist importers meet future compliance requirements.

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The letters note that under current statutory provisions (19 U.S.C. § 1592(c)(4)) importers may elect to submit a disclosure, and if a complete disclosure is presented before a CBP investigation is initiated (or before there is knowledge that CBP will begin a formal investigation), there can be reduced penalties.

In providing these letters, CPB is reminding importers that any future violations could result in seizures and forfeitures of imported merchandise, as well as the imposition of monetary penalties. CBP is requesting that recipients of the letters sign and return a copy of the letter to CBP.

“Informed compliance” reference items

The CBP letters include a list of informed compliance publications available on the CBP website (and are accompanied by a DVD). According to a sample of the letters, CBP is encouraging importers “to proactively monitor” transactional data in the ACE secure data portal and to evaluate whether there are “significant errors/discrepancies that should be voluntarily reported to CBP.”  

  • The letters encourage companies to conduct self-review of systems used to make declarations to CBP and to take appropriate steps to correct issues and submit loss of revenue (duties, fees, taxes) based on the liquidation status of the subject entries or transactions. 
  • The letters note that ACE portal account users have access to view their account information and transactional data that may be used to identify and evaluate compliance issues and to monitor daily operations. 

KPMG observation

Importers receiving this type of CBP letter need to carefully consider and recognize that this may be a precursor to a full CBP “focused assessment” or other type of audit.  Accordingly, companies that receive this CBP letter would want to consider the following steps:

  • Immediately conduct a risk assessment of all import transactions with a specific focus on any risk areas addressed by CBP in the letter
  • Conduct sampling and transactional testing to further asses the level of risk, if any, within those identified risk areas
  • Include import transactions (as well as other payments that may be considered to be included in dutiable customs value—e.g., royalty payments) in conducting the sampling and testing functions  
  • Take appropriate action to correct any findings of non-compliance including submitting a prior disclosure and improving internal controls

 

KPMG Trade & Customs professionals have extensive experience in addressing similar CBP reviews and assessments. 

 

For more information about possible next steps to take if your company receives a similar letter from CBP, contact a professional with KPMG’s Trade & Customs practice:

Douglas Zuvich | +1 (312) 665-1022 | dzuvich@kpmg.com

Andrew Siciliano | +1 (631) 425-6057 | asiciliano@kpmg.com

Todd Smith | +1 (949) 885-5617 | trsmith@kpmg.com

Luis Abad | +1 (212) 954-3094 | labad@kpmg.com

John McLoughlin | +1 (267) 256-2614 | jlmcloughlin@kpmg.com 

George Zaharatos | +1 (404) 222-3292 | gzaharatos@kpmg.com 

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