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Compliance Programs

MSR Duty Recovery offers customs compliance assessment services to help you ensure you're prepared for a customs compliance verification audit.

An ounce of prevention is worth a pound of cure. Especially in international trade compliance.

It's no secret that Customs and other authorities in the United States and Canada have turned their focus and resources on compliance verification audits. These verification audits go hand-in-hand with their risk assessment strategies, including plans to eventually capture all companies involved in cross-border or international trade activities in the audit schedule.

It's also no secret that compliance errors expose companies to a great deal of risk: from quickly escalating fines and repetitive audits, to profit- destroying additional duties, taxes, interest and penalties on historical transactions, border delay costs and frequent inspections, even the loss of importing or exporting privileges.

And it's absolutely no secret that left unaddressed, inadequate compliance practices have significant costs – financial, operational, and reputational — with devastating consequences to empowered officials and business revenues.

We offer tailorable compliance assessment, enhancement and mitigation services to alleviate this risk.

Compliance Assessment Services

Like most issues, it's better to find your problems before the authorities do. Our compliance assessment services can simulate a full customs audit to determine your level of compliance and potential areas of risk.

Compliance assessment services can also be used to design or improve your internal processes, or if your compliance processes require an annual external review.

Our experts tailor their analysis on your business processes, systems, controls and documentation. They can provide you with options to enhance your processes and reduce your business risk from penalties and from missed opportunities:

Tariff classification

Your practice of determining tariff classification and managing or validating your third party classifications.

Valuation

The logic and documentation you use to determine the value for duty of goods from related and non-related parties, as well as your amendment processes.

Origin determination

An analysis of the audit trails in place to support rule of origin claims under free trade agreements, such as NAFTA.

Reporting and Recordkeeping

Customs reporting and record keeping practices are examined for alignment with customs or Sarbanes-Oxley requirements.

Duty reduction

A measurement of the effectiveness of controls over any duty reduction programs you use.

The results will allow you to benchmark your compliance to customs rules and regulations and identify areas of risk. Come audit time, you will have already taken steps to review and address compliance gaps, mitigating risk, penalties and Sarbanes-Oxley issues.

Standard Operating Procedure (SOP) Development

Develop or enhance internal processes and Standard Operating Procedures (SOPs) to achieve compliance with regulatory and corporate governance requirements.

Internal process documents and SOPs are critical for demonstrating how you comply with regulations. They help you maintain compliance standards and they help your supply chain partners understand and meet your company's compliance expectations. For publicly traded companies, these documents support the controls required by Sarbanes-Oxley legislation.

Our experts will work with you to develop internal processes and SOPs that are both customized to your needs and designed to help you achieve compliance with regulatory obligations and corporate governance requirements. Whether designing and developing your trade compliance processes or documenting specific SOPs, our trade consultants can provide you with insight and knowledge.

Take comfort knowing that you are running a streamlined operation and are prepared for a customs audit, with demonstrable due diligence practices.

Customs Valuation

Valuation is one of the key program areas of concern during Customs compliance verification audits.

While assigning a "value" to goods may seem a simple task, valuation rules are actually one of the most complicated Customs areas to navigate. In addition, duty rates are generally applied to the customs value, so an incorrect value will yield an incorrect duty amount.

Our experts can help you streamline your navigation of the various valuation methods, ensuring that transportation, commissions, assists, royalties, and other elements are applied correctly, and the correct method is selected based on transaction circumstances. Valuation services include:

  • Understanding the business process surrounding your import transactions
  • Reviewing related transaction documentation
  • Validate your customs valuation method or, where mistaken, determine the correct methodology, accurate valuations, and recommend corrective actions
  • Provide the necessary audit trail and documentation to support the valuation

Gain peace of mind knowing your valuation is accurate and in compliance with the specific rules for assigning a value for duty, and be prepared for a clean audit without penalties and Sarbanes-Oxley issues.

Voluntary Disclosures

Everyone makes mistakes. Voluntary disclosures allow you to come forward and reveal your issues in a positive and proactive way. Consequences and penalties are far more severe if customs authorities discover the non-conformance. Once customs discovers errors or initiates an audit, voluntary disclosure is no longer an option.

We'll help you determine if your situation meets the criteria for voluntary disclosure, then help you through the process of submitting and receiving acceptance. Our standard process is to:

  • Review the non-compliant issue and its scope within your trading practices
  • Prepare a report detailing errors or omissions
  • Discuss the implications with customs and submit your voluntary disclosure
  • Negotiate with customs to mitigate any penalties and interest

Use our voluntary disclosure services to help minimize the risk of penalties, fines and loss of importing privileges by addressing issues of non-compliance before they are discovered by customs authorities.

Appeals

If you find yourself in disagreement with customs authorities, no matter how complex, we can help. Our consultants have positive relationships with the authorities and have the have the skills and the track record to guide you through disputes involving valuation or tariff classification, seizures, trade actions, or any other special import measures.

You can rely on our experience. From initial contact and liaising with customs authorities through to formal legal representation, our team understands the process, preparation and strategic considerations necessary to improve the likelihood of securing a favorable outcome. You'll benefit by reducing your provisional payable duties and maximizing the refund of extra duties once your case has been resolved.

Audits and Audit Assistance

If you receive a notice from Customs that you are about to be audited we can help. Audits can take over a year and a thousand hours to complete so companies in this situation look to us for guidance. Our experts will provide you with continual assistance throughout the audit process and support you through the many requests made by customs auditors to help ensure as smooth an audit process as possible.

Customs authorities are increasing the number of audits they conduct and the use of penalties. They’re not only focusing on larger importers, but are also on smaller importers that have fewer resources to invest in managing sound compliance programs, controls and the people to manage them. As part of their auditing process, Customs is returning 12 to 18 months after an audit has been conducted to verify that non-conformances have been addressed and recommended changes have been implemented.

If Customs has questions about your importing practices, has provided you with a questionnaire or notified you of an audit, we can help you be confident you are complying with Customs' requirements in the way that you should. We will help you identify areas of non-compliance and discuss how best to disclose them. As part of our Audit Assistance service, we will:

  • Review and prepare questionnaires
  • Attend the initial audit/importer meeting
  • Review Customs' selected sample transactions for completeness, accuracy in order to understand the level of compliance prior to submission to Customs
  • Continue to provide technical support throughout the audit

By accessing our experience and knowledge about customs audits, you will be confident in knowing that you can rely on the experts who have helped many importers through a difficult audit process.

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