Customs Audit Attorneys
(Customs Audits, Quick Response Audits, and Audits Surveys)
Importers undergoing a Customs audit are well advised to retain an experienced Customs attorney to be involved in the defense process from the beginning of the audit.
General Information About Which Companies are Selected for Audit by U.S. Customs and Border Protection (CBP)
Selection criteria of such companies for a Customs audit typically relate to factors such as: an importer’s volume, total entered value, and the nature of the imports undertaken by the company.
As mentioned above, Customs has a particular affinity for importers dealing with “high risk” commodities, industries, and those who use higher risk compliance programs. These areas may include apparel, agriculture, textiles, footwear, automobiles and auto parts, handbags, cases & containers, goods subject to anti-dumping and or countervailing duties, goods subject to preferential trade programs, goods subject to drawback, and numerous other categories etc. (see e.g., CBP's priority trade initiatives).
With the advent of the ISA, C-TPAT and Trusted Trader programs, Customs has moved many of the large Tier 1 accounts into audit-proof pools and this has in turn allowed Customs to focus its resources on increasingly of the second-tier importers, (termed "mid-level accounts” which comprise up to 80%+ of all imports by value.) Second-tier companies can be characterized as importing goods in the range of $50 -$100 million annually.
Second-tier companies should therefore consider themselves at risk for a Customs Focused Assessment, especially if they import goods subject to one or more of CBP's priority trade initiatives.
Indeed, any company that imports near or over $10 million in annual volume ought to consider itself a candidate for some type of Customs audit process, and may wish to consider having an experienced attorney review its operations and procedures in advance of such outreach.
A Few Reasons to Retain a Customs Lawyer when Facing a Customs Audit
Importers benefit from the strategic map and nuanced thinking of a customs lawyer. A company without representation may not fully understand either the law or the audit processes, which in turn have a great impact impact on their legal rights and liabilities.
For example, one of the key dynamics in a Customs audit is the ability of the importer to tender protective prior disclosures to insulate itself from civil penalties. The decision of when to invoke a prior disclosure, however, requires that importer have the ability to spot errors that it may not have been aware of in the first instance. These discrepancies are often only discovered when a customs lawyer or a customs auditor scours the import transactions.
Other important legal mechanisms requiring specialized legal knowledge are the administrative protest, and internal advise mechanisms, allow for the resolution of disputed issues and the protection of an importer's legal rights. An experienced customs attorney will guide your company to present itself in the best light, and possibly minimize the extent and impact of the audit. By answering audit questions directly, an experienced practitioner helps move the proceedings in positive directions.
Types of Customs Audits
Factors that can trigger audit events include: (1) Being placed into an audit pool for routine audits, (2) Customs observation of a series of classification errors, (3) anti-dumping/countervailing duty compliance issues, (4) CF 29 rate advances, eligibility issues, (5) reconciliation problems, (6) apparent valuation & assist issues, (7) failures to file entries, late filings, or incorrect entries, (8) the misuse of FTAs or other preferential programs, and (9) investigations of evasion, transshipment, or other supplier issues undertaken by CBP.
Often compliance are identified by an Import Specialist, or another type of specialist within one of the CEEs (Centers for Excellence and Expertise), who may then refer the matter onward to ISET, Regulatory Audit, or the FP&F Division for further investigation and enforcement.
We are experienced in representing importers going thru Customs Audits
This includes Focused Assessments (FA), Quick-Response Audits (QRA), and Audit Surveys. If you believe that you are facing an audit situation, please contact a firm attorney at (415) 498-0070 to schedule an appointment.
Our customs lawyers are known nationally and internationally for their work in customs and international trade law.
The firm's offices are located in San Francisco, California, Seattle, Washington, and Los Angeles, California. Our practice areas include classification, valuation, admissibility, customs detentions, seizures and penalty proceedings, and customs audits. We bring litigation, and handle numerous other types of issues arising in international trade. See our services listings. To schedule an appointment, please contact our offices at (415) 498-0070.