CBP Updates its Focused Assessment Kit and Revises Exhibit on Treatment of Ultimate Consignee
U.S. Customs and Border Protection (CBP) has posted a notice to its Web site announcing that it has updated its guidance documents on the Focused Assessment Program (FAP), which CBP refers to as the FA Kit. CBP states that the FA Kit contains the same handbooks, audit program, sampling plans, and guidelines that regulatory auditors and other Customs specialists on an FA Team use to conduct an FA. Providing it to the trade is intended to help importers prepare for an FA and conduct an assessment of their own Customs systems.
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CBP is making available all its FAP guidance documents in an updated, single download. In addition, CBP has also revised and reissued Exhibit 3J, on the "Treatment of the Ultimate Consignee Transactions in a Focused Assessment."
CBP's Web site also indicates that in October 2004, CBP revised and reissued Exhibit 6A ("Sampling Technical Guide"), which provides technical guidance for sampling and seven associated appendices. (See ITT's Online Archives or 12/27/02 news, 02122705 for BP summary of late 2002 revision to Exhibit 6A)
(CBP has previously stated that an FA is a compliance audit conducted by CBP, based on risk management principles. In 2001, FAs replaced Customs' Compliance Assessments. )
FA Kit Available as a Single Document
CBP has made available all of its FAP documents in a single, large (3,493 KB) PDF file. CBP states that individuals may wish to right-click on the link and save it to their desktop before opening the file.
Exhibit on Treatment of Ultimate Consignee Transactions Revised
According to CBP, Exhibit 3J (as revised) addresses Importer of Record and Ultimate Consignee responsibilities and audit procedures, highlights of which are provided below (partial list).
During an audit, Exhibit 3J states that the FA team will primarily address issues related to the responsibilities of the auditee as Importer of Record. Issues related to the auditee's responsibilities as Ultimate Consignee will be addressed as needed on a case-by-case basis.
The Importer of Record will be held '"accountable" for the declarations made at entry, while both the Importer of Record and the Ultimate Consignee will be held responsible for maintaining the necessary records1.
Scenarios when auditee is Ultimate Consignee, but not Importer of Record. The exhibit (as revised) also provides guidance to auditors in the form of three scenarios where the auditee is the Ultimate Consignee but not the Importer of Record:
- Consolidated entries with multiple ultimate consignees. In this scenario, an audit sample may include a consolidated entry that identifies the auditee as the ultimate consignee when other ultimate consignees are responsible for part of the consolidated shipment. When this occurs and the auditee is not the importer of record, the auditee must arrange with the entry filer to provide information to CBP to prove that the auditee is not the Ultimate Consignee responsible for all portions of the consolidated entry. The auditee is only responsible for those portions of the consolidated entry for which he is the ultimate consignee. In addition, the auditee must maintain records related to those portions of the entry for which he is was the ultimate consignee.
- Unsolicited merchandise on entries listing a company as ultimate consignee. This scenario encompasses companies that are listed as the ultimate consignee on an entry when the company does not initiate or have any information about the specific import transaction (for example, unsolicited samples, prototypes, or returned merchandise).
If the auditee did not initiate the import transaction has no records related to the importation, and can adequately explain the circumstances and its lack of records to support this transaction, the auditee will not be held responsible for the necessary records1 or for the accuracy or completeness of entry information.
- Entries initiated by the ultimate consignee but another entity is importer of record. This situation may occur, for example, when the overseas supplier (or other entity) is the Importer of Record and handles the details of the importation. If these entries are included in the audit sample, the Ultimate Consignee is responsible for maintaining and making available the necessary records1.
1The records referred to in Exhibit 3J are those required by 19 USC 1508 (Recordkeeping), which, among other things, include records normally kept in the ordinary course of business.
Background
Customs has previously stated that under an FA it would conduct a Pre-Assessment Survey (PAS) to evaluate a company's internal controls over Customs operations and, if significant control weaknesses are found, CBP would then use Assessment Compliance Testing (ACT) to measure only those areas where weak controls indicate a significant risk of non-compliance or loss of revenue. If a loss of revenue or non-compliance for one or more of the areas tested is significant, CBP will collect the lost revenue and recommend a Compliance Improvement Plan (CIP) for that company.
Entire FA Kit (dated 10/31/05), revised Exhibit 3J (dated 10/31/05), and revised Exhibit 6A/Appendices (dated 10/31/04) available at