US Customs and Border Protection just amended its policies regarding Focused Assessments, those intensive, prolonged, invasive audits of large importers. Employing the ascetic, some might suggest sadistic, philosophy of one who prefers to remove a bandaid slowly to maximize the duration of the discomfort, CBP decided that this is just the first big step of a greater overhaul that the agency plans to gradually roll out in the coming months and years. CBP claims without any sense of the irony that it is seeking to make focused assessments more nimble and malleable.
If you are one of the lucky and increasingly rare large importers that hasn't been subjected to a focused assessments, CBP auditors have been clinical in their application of a series of highly technical standards that all importers are expected to comply with. If this sounds like the agony that schools inflict on our kids through standardized tests under Leave No Child Standing, you are getting the gist. CBP uses questionnaires, personnel interviews, document reviews, facility walk-through, and statistical sampling to gauge compliance and improvement and upon finding an indication that either is missing will elevate the risk level and therefore the audit to more punitive levels of intrusion and cost. If you are really naughty, the CBP auditors may even set up shop on a semi-permanent basis within your place of business. It's like having cops move in to your home just to make sure you tow the line.
But CBP realizes that one size doesn't fit all and perhaps a more nuanced approach is needed.
Here are the major changes (thus far):
No More Advance Conferences: Before the audit even started, the importer and CBP audit team would meet in what could be seen as a test of wills. Armed with the answers to a lengthy questionnaire that the importer provided, CBP would interrogate the importer further to determine the scope the focused assessment, and the importer would gently but firmly deflect overreaching inquiries. Sadly, these preliminary scuffles are now gone (entrance conferences, however, will still be held) and CBP will rely more heavily on a review of the importer's policies and questionnaire answers. CBP has access to a wealth of the importer's data even before the importer is notified of the audit obviate the need for an interrogation. It is this data that allows the agency to decide which importers to audit. Much of the audit's scope, and certainly the contents of the questionnaire, are developed at this stage called the preliminary assessment of risk or PAR.
Tailored Questionnaires: The importer will still be asked to complete an extensive questionnaire, but now it's called a Pre-Assessment Survey Questionnaire or PASQ. While CBP provides a template for PASQs, CBP auditors are expected to tailor the PASQ to fit the importer based largely on the impressions generated during the PAR. In addition, "Auditors use their judgment to develop the format and content of the questionnaire". Most of the changes to the Focused Assessment are about giving CBP auditors more discretion. The scope of the Focused Assessment, how the auditors pick samples of entry documents and what they look at during walk-through will rely more heavily on the auditors' judgment. The problem with greater discretion is that the risk of overreaching is also greater. CBP auditors are not bound by yesterday's methodologies and will be able to dig more deeply into areas of concern.
Clearer Path to ISA: The Importer Self-Assessment (ISA) program is a gem that few importers take advantage of. A voluntary program from CBP, importers are allowed to audit and police themselves (CBP removes them from most audit pools) once they establish to CBP's satisfaction the soundness of their import policies. Because a Focused Assessment is more rigorous than ISA's qualifying procedures, companies that have successfully gone through a Focused Assessment are allowed a streamlined process to enroll in ISA.
Want to know more about the Focused Assessment amendments and how to prepare and survive a Focused Assessment, then sign up for our webinar on Monday, October 13.
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