Yesterday, I had the privilege of speaking at ACI’s Advanced Forum on Customs & Trade Enforcement here in Washington, DC. I spoke on a panel with an attorney from US Customs and Border Protection (CBP) Headquarters about the interplay between transfer pricing and customs valuation. I have attached the slides from our presentation here for your reference.
I also wanted to pass along a tidbit I picked up from one of the other panels that addressed CBP audits. As we have advised previously, CBP is conducting more audits, but fewer of those audits are traditional Focused Assessments (FA’s). Instead, with the transition of enforcement responsibilities to the Centers of Excellence and Expertise (CEE’s), CBP is conducting many more “targeted” or “single-issue” audits (e.g., quick response audits, survey audits, etc.). These focused audits are aimed at issues of perceived non-compliance, rather than at the internal controls the company has in place over one or more areas (like a traditional FA). Also, the CBP speaker on the audit panel made it clear that, while the primary benefit of the Importer Self-Assessment program (ISA) is being removed from the CBP audit pool, that means being removed from the FA audit pool only. Stated differently, ISA member can be (and frequently are) the subject of the targeted audits being directed by the CEE’s and conducted by Regulatory Audit. If CBP is conducting fewer FA’s, and more targeted audits, this calls into question whether ISA members are really getting much benefit from the ISA program.
We hope this is helpful. If you have any questions about either intercompany customs valuation or the audit issues discussed above, please let us know.