Maintaining Compliance Status - A Compliance Checklist

What Do You Need to Maintain Your Drawback Compliance Status?

	Payback
	Personnel
	Procedures
	Program
	Paper Trail
	Penalties

Payback:

"Payback" is what you earn if you do all the right things—you receive your duty refunds!

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Personnel...must:

Have Power of Attorney Someone must have authority to sign documents. An officer of the company must sign them.

Have a thorough understanding of drawback, importing, exporting and inventory controls Must be conversant in drawback regulations and the logical flow of data Ability to fill out proper forms (CF7551, CF7552, CF7553, POA)

Be able to glean relevant information from import related documents Duty rate problems and classification inconsistencies Should know differences between import data and entry data Ability to handle complex factors such as NDC's, currency conversions, etc. Capability of instructing proper filing of C.D.'s by vendors Invoice related problems - Large and/or bizarre part numbers Quantity ordered/delivered discrepancies Unit of measure inconsistencies Unrated invoices

Be able to locate sufficient proof of export Original waybills/bills of lading Canadian B3 import documents Mexican Pedimentos House bills Proof of payment Commercial invoices/packing lists denoting part/sku/style-size-color detail

Have knowledge of company flow of data and material Have overall familiarity with entire business Access to people in all affected areas Purchasing, receiving, shipping, manufacturing, international Ability to follow paper or computer trail of the workflow

Stay current on U.S. Customs regulations and activities World Trade Institute, Customs Website, AAEI, NCBFAA, Broker Power, etc.

Maintain an open channel of communications with Customs Keep them up to date on your changes/problems and vice versa

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Procedures:

Review procedures for preparation of claims

Recordkeeping Program / Record Retrieval List designated areas involved in compliance List topics/responsibilities to be covered with each Conduct visits

Review procedures for preparation of claims

Self Audit

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Paper Trail:

Imports Receipts

Manufacturing Work in process Finished goods inventory

Export

Electronic Information

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Program—Computer program must have:

Maintain Inventory Monitor balances

Ability to verify data Entry numbers Port Codes Dates

Avoidance of duplication/double dipping

Ability to handle all forms of drawback Substitution Direct Identification

Conforming to specific rulings

Provide common sense warnings

Must have competent operator

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Penalties:

In the compliance program Non Fraud (negligent) violation in a three-year period First Time—20% plus loss of revenue (possible warning) Second Time—50% plus loss of revenue Third Time—100% plus loss of revenue Fraud Three times loss of revenue

Not in compliance program Non Fraud (negligence) violation First Time—20% plus loss of revenue (no warnings) Second Time—50% plus loss of revenue Third Time—100% plus loss of revenue

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