Customs Announces New Importer Self-Assessment Program

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August 14, 2003

Recently, the Customs Service ("Customs") issued a general notice announcing the implementation of its new Importer Self-Assessment ("ISA") Program, a joint government initiative that will allow interested, eligible importers to assess their own compliance with Customs laws and regulations on a continuing basis. See 67 Fed. Reg. 41298 (June 17, 2002). The ISA program provides a means to recognize and support importers that have implemented such programs.

Customs states that all importers who are current members in the Customs-Trade Partnership Against Terrorism ("C-TPAT") may apply for ISA by signing an ISA Memorandum of Understanding ("MOU") and completing an ISA questionnaire. Customs will assess the applicant's readiness to assume the responsibilities of ISA. Customs began accepting applications to participate in the ISA on June 17, 2002.

According to Customs, ISA will continue the self-assessment principles of Customs' now-discontinued Importer Compliance Monitoring Program ("ICMP"), while relying on new methodologies that provide upfront benefits and a more flexible approach.

In order to participate in the ISA program, an importer must:

 

• become a member with full benefits in C-TPAT;
• be a resident importer in the United States with a minimum of two years importing experience;
• agree to comply with all applicable Customs laws and regulations;
• have and maintain a system of business records that demonstrates the accuracy of Customs transactions;
• complete an ISA questionnaire and sign an MOU under which the importer agrees to establish, document, implement and adjust internal controls, test risk, and submit an annual written notification to Customs identifying a company ISA contact and confirming that the importer continues to meet the ISA requirements; and
• have the ability to connect to the internet.

In order to complete the ISA application, Customs will require the importer's name, a unique importer number, a statement concerning the importer's participation in C-TPAT, a statement certifying the importer's ability to connect to the internet, as well as a signed ISA MOU and completed ISA questionnaire.

After the importer has submitted a completed application, Customs will review the company submission. Customs will conduct a risk assessment of the applicant and will review the applicant's readiness to assume responsibilities for self-assessment. In some cases, Customs may visit the applicant to consult with the company to discuss and review the company's internal controls. If Customs determines that the company is not ready to assume the responsibilities of self-assessment, Customs will continue to work with the company to strengthen and improve their program. If Customs determines the applicant is ready to assume the responsibilities of self-assessment, Customs will sign the MOU.

Once accepted into the ISA program, an importer becomes eligible for the following benefits:

• the importer is entitled to receive entry summary trade data, including analysis support from Customs;
• consultation, guidance and training by Customs will be available to the importer as requested and as resources permit (for compliance assistance, risk assessments, internal controls, Customs audit trails, etc.);
• the opportunity to apply for coverage of multiple business units;
• the importer will be exempt from all comprehensive compliance audits (accounts may be subject to onsite examinations for specific reasons, but will not be subject to comprehensive assessments of all Customs operations);
• the importer will be able to use a hotline to Regulatory Audit key liason officials;
• Customs will allow the importer 30 days, following written notice that it has become aware of errors in which their is an indication of fraudulent violation, to assess and file a prior disclosure if necessary;
• the importer's participation in ISA will be considered in the assessment of any civil penalties or liquidated damages;
• the importer will have access to a Customs team consisting of an Account Manager, auditor and a trade analyst assigned to service ISA participants.

Additional benefits may be made available and tailored to meet certain industry needs.

More detailed information concerning the ISA program is available on the Customs website at www.customs.gov/imp-exp1/comply.isa.htm, including an ISA Handbook which contains the information and forms necessary to apply for the program.