Customs and Border Protection Updates ISA

Customs and Border Protection has posted an updated Importer Self Assessment Memorandum of Understanding. You can read that document here.

I don;t want to sound like a curmudgeon; I am at least two years away from that status. But, I have long had questions about the value of ISA participation. Looking at this MOU, the ISA member agrees to a number of things including:
  • Agreeing to comply with applicable CBP laws and regulations
  • Perform annual risk assessments
  • Make appropriate disclosures
  • Maintain results of testing for three years and make test information available to CBP upon request
  • Maintain an audit trail from financial records to CBP declarations, or an alternate system that ensures accurate values are reported to CBP
So, the ISA member has to perform annual testing and maintain the records for review by CBP. 

An importer that is not in ISA but behaves as if it were would undertake annual (or more often) risk assessments. Those reports, however, if done at the direction of counsel, would be privileged against disclosure to Customs. Further, the company could decide what to disclose to Customs. A company that is careful and interested in compliance would make disclosures to protect itself from penalties and to ensure that it has paid the appropriate amount of duties to the U.S. Further, a careful and compliant company is going to maintain records in accordance with the law.

It seems to me that ISA members have agreed to give up the flexibility that goes with internal controls. The main benefit for this undertaking is to be removed from the random audit pool. That is true and a valuable benefit. But, importers should keep in mind that ISA membership does not remove them the responsibility of responding to a so-called Quick Response Audit. Nor does it mean that Customs and Border could not launch a full-blown audit if it sees a reason to do so. And, the MOU specifically states that ISA members are not immune from penalty liability (although membership may be taken into consideration in setting penalty amounts).

So, I have a question for ISA members out there: Is it worth it? If so, how?

Comments

Post a Comment

Popular posts from this blog

Ruling of the Week 2015.8: Old Jersey and Pitcairn Island

Image
For today's ROTW, I set out looking for a ruling dealing with some far off and preferably warm location. Turns out that, with the exception of coastwise transit issues, there are no Customs and Border Protection rulings involving Pitcairn Island or any of several Pacific Ocean microstates including Tuvalu , Niue , and Kiribati . Pitcairn Island What I did find is an interesting question about the country of origin marking for products of the Bailiwick of Jersey Island, Channel Islands. The ruling is HQ 561938 (Mar. 18, 2002). For those of you who may not know, Jersey is an island off the coast of Normandy, France. It is an independent international actor and not part of the U.K. although the U.K. is responsible for its defense and external relations. Also, the Queen is the Head of State in her capacity as "the Crown in Right of Jersey." It is, according to the U.S. Department of State, a " Crown Dependency " along with the Isle of Man and the Bailiwick o...
Read more

CAFC Decision in Double Invoicing Case

The Federal Circuit has issued a decision on the merits in United States v. Inn Foods, Inc.  There had been a previous decision on jurisdiction, which was followed by a trial at the Court of International Trade and then this appeal on the substance. The initial issue is whether Inn Foods' invoicing practice amounts to fraud.  Inn Foods had been receiving an invoice from growers in Mexico that had a relatively low sales prices on it.  Subsequent to entry, Inn Foods created a second invoice at something more similar to market value, retaining the original invoice number, and paid at that higher amount.   Superficially, this looks like a standard-issue double-invoicing scheme.  But, in the age of reconciliation, is it really more like a provisional pricing mechanism?  It might have been possible to make that argument had Inn Foods adjusted its entries accordingly.  It didn't and the loss of revenue was approximately $624,000.  Based on testimony and evidence indicating both knowl...
Read more

Ninestar and UFLPA Exhaustion

Image
Exhaustion is a key doctrine in administrative law. When applicable, it requires that a party unhappy with an agency’s determination complete the administrative appeal process before turning to the courts for judicial review. Requiring exhaustion typically promotes judicial efficiency by ensuring that disputes are resolved at the agency and, if they are not, that there is a complete record of the agency process. Exhaustion also ensures that the judiciary respects the executive agencies and their expertise.  There are, on the other hand, times when the courts will find that exhaustion is not necessary or appropriate. Such is the case in  Ninestar Corporation et al. v. United States  et al., a decision of the U.S. Court of International Trade.  Ninestar is also interesting because it is one of the first cases in the CIT involving the Uyghur Forced Labor Prevention Act, known as UFLPA. In my hiatus from active blogging, I missed the rise of UFLPA as a major compliance t...
Read more