Customs audit procedure is a very crucial part of import and export business. By definition, a customs audit is a process of verifying the compliance of a business with the relevant legislation and revenue requirements through verification of the accounts and other records of that business. A good customs audit procedure in place helps a business to control or avoid risks. By following a few simple rules you can improve your compliance of your business, avoid duty reclaims and time consuming appeals, leading to improved supply chain performance and cost control. The process of customs audit may slightly vary from country to country depending upon the rule of land however few basics remain constant across the globe.Â An unpleasant customs audit may result in recommendations, duty adjustments going back four years, and financial penalties. So, here is what you need to prepare before a customs audit:
- Implement a system First and foremost, you must have a standardized system in place, say a department that will take the primary responsibility of ensuring everything is in order. It becomes easier when a dedicated team overlooks customs procedures, such as internal reviews, record maintenance of import and export declarations, and are well-versed in compliance clauses. This will ensure customs manual is up-to-date and accurate the first thing an auditor will want to see.
- Keep internal factors under control It is important to review your compliance process at regular intervals so that all systems and controls are in place. There should be process and system linkages through each department. All financial links statements and agreements, must be accurate and accessible. The process of documentation must be followed for your tariff classifications, third party opinions, samples, and the like. Make sure you implement any recommended changes that resulted from a customs audit and address any outstanding issues.
- Conduct self and third party audit Self-audit of your trading activities is one of the best ways to get ready for a customs audit. Self-audit by an internal audit team must be done at least once a year, or if there is any change in rules and regulations by customs authorities. Alongside, if your organisation has undergone any internal change like change in business partners, or introduction of new product, this will also call for an audit. In addition, you must also consider a third-party audit to gauge your compliance level, and identify gaps before an actual customs auditor does it.
There is no alternative but to pay heavily for deviating from custom rules and regulations. Thus, it is better to be safe than sorry by taking the extra effort and time to keep all customs documents accurate, accessible and in order.