Standardize Internal Control Procedures

CustomsAdvisoryPlus' experiences are

that internal control procedures in the customs and related tax areas are often non-existent or, otherwise, not harmonized throughout the company. Also, internal control procedures existing for audit-and indirect tax (if present) are often also not aligned with indirect tax procedures.

Customs duties do most of the time not have a material impact on your balance sheet, if the scope is limited to one customs jurisdiction. Therefore, customs duties are almost never a subject which is covered by the auditors when doing a SOX assessment.

CustomsAdvisoryPlus would like to stress that for MNC's, underpayment of duties may not be material under the SOX rules on a country-by-country basis, but may become consequential on a consolidated global basis. The accumulation of exposures on a global basis may be material under SOX, when global customs classification, valuation and sourcing programs have not been correctly implemented. Regardless of SOX requirements, MNC's should always be "in control" of the customs function (see also below). Customs is more and more focusing on the presence of internal control procedures when a company applies for the AEO status (see also AEO) or the use of simplified customs procedures (see SASP).

When your company already has customs licenses, it will also be important to be "in control". If the correct procedures (similar to AEO requirements) have not been implemented before January 1, 2012, customs may withdraw your license(s). The customs function, amongst other things, also deals with non-duty related risks, such as: pricing- (if duties have been underpaid), operational-, compliance-, regulatory-, reputation - and security risks. Exposures to any of such risks, may have a significant adverse impact on your company.

Solutions

CustomsAdvisoryPlus has developed a program, which could be incorporated in your company's internal direct tax control program. Our program covers the aspects of payment (such as payment process, timely and correct payment), systems, which support the customs function, the material impact (correct origin, value, classification) and also third parties.

Implementation of our program would enable you to properly manage the various customs areas and also your external service providers (such as customs brokers).

CustomsAdvisoryPlus' services approach is as follows:

ICproc flow

Your benefits

Cost savings: No additional (non-recoverable) costs, because of retroactive duty assessments and fines resulting from non-compliancy.
More efficient approach and more transparency of the customs function, because of the developed integrated customs- and direct tax procedures.
Less unexpected surprises in the future.
Consistent approach, more knowledgeable staff and time savings (defense documentation, implemented control procedures).

More information: contact info@customs.a.plus.com