You have received your customs examination order and are wondering how to prepare for the customs examination; customs examinations can have unpleasant consequences if they have not been properly prepared.
It is not only that additional payments of customs duties can be made (which are threatening anyway – even without preparation). Instead, administrative offence and criminal proceedings can also be opened or customs permits (e.g. authorised consignee, AEO etc.) are withdrawn.
Before any customs audit, companies should follow at least these 10 steps to properly prepare for the customs audit.
- Check the test arrangement
- Postpone customs check date if necessary
- Who is the contact person (internal and external) during the customs inspection?
- Checking the completeness of the customs documents (“Pre-audit”)
- study the latest customs examination report
- Set up and restrict access to the EDP system
- To instruct employees about duties to cooperate, rights to refuse to provide information and indications of the opening of administrative offence or criminal proceedings
- Informing tax advisors and lawyers
These points will be described in more detail below.
1. Check the test arrangement
The inspection order determines the scope of the customs inspection.
It also determines the rights of the auditor and sets out the company’s duties to cooperate. In particular, check the time period and the type of check ordered. When providing documents, they should only take into account the periods specified in the examination warrant.
If you provide more data or do not properly configure IT access, the auditor may see more operations than he should.
2. Date of customs inspection may be postponed
Normally you will also find an appointment for customs inspection in the customs inspection order. If this is not indicated, the main customs office will contact you. Again and again we hear the question: “Can the date of the customs inspection be postponed?” In principle, the date for the customs inspection is fixed. However, if there are urgent reasons for a postponement (e.g. important trade fairs, illness of employees), the customs administration will usually agree to postpone the customs inspection date without any problems.
3. Who is the contact person during the customs inspection?
In any case, you should clarify internally who the contact person is during the customs inspection. In smaller companies this is usually the managing director himself, often together with an accounting employee.
In larger companies it is recommended that the customs representative himself is the contact person during the customs inspection. He also coordinates any inquiries from the auditor with the various departments and the management.
In any case, it is important that there is a central contact person for the customs inspector. Otherwise, there is also the risk that the auditor will speak to a large number of employees and that the flow of information may no longer be controllable.
If necessary, an external contact person can also be selected for the customs inspection. Tax consultants or lawyers often coordinate customs inspections from outside or, if the client so wishes, are also on site during the customs inspection themselves and can thus help to shape these and, in the case of risks, advise the management directly during the inspection.
4. Checking the completeness of customs documents
In any case, it is extremely important that the completeness and accuracy of the customs documents are checked internally as part of a pre-audit before the inspection date.
The management or the customs representative should obtain an overview of the processes to date. Even if the customs representative has always been involved in the imports, it is often advisable to review the processes at least as part of a random sample.
Companies should ensure that the documents are complete on the one hand, but also that the data is readable and usable by the auditor within the framework of an export. In addition, it should not be omitted to check the customs documents for errors so that countermeasures can be taken before the inspection begins if necessary.
5. Read the latest customs audit report
You should also have the last customs audit report selected again for subsequent customs audits. Read it carefully. You should answer the following questions:
- Were there any complaints during the last test?
- Were there any findings during the last check that the goods tariff numbers were used incorrectly and were these errors corrected?
- Are there any other complaints from the last customs inspection?
- Has anything changed in the company’s standard (e.g. turnover, management, position in the supply chain)?
The customs inspector will also have read through the previous inspection report himself before the inspection. In this respect, you are well advised to refresh your own knowledge, because the examiner may ask the aforementioned questions himself.
6. Set up and restrict access to the EDP system
The auditors are increasingly requesting information for customs inspections also in electronic form. In this respect, it makes sense to give the customs inspector access authorisation to the EDP system. But remember to limit it effectively. If the customs inspector has the possibility to research old transactions without restrictions, it may well be that he will make a random find. The customs administration can then also make additional payments, although the random find may not have been covered by the audit order.
If necessary, you should involve your IT department and a contact person from the IT department should be present during the examination period for any changes in access authorizations.
7. Inform employees
Inform all employees who can get in touch with the customs inspector that there will soon be a customs inspection in the company.
You should point out to your employees that they are generally obliged to cooperate in the customs inspection.
However, you should also point out that in the event that the customs inspection turns into criminal proceedings, employees do not have to burden themselves. In addition, every employee should be made aware that the customs inspector can actually take on the role of a public prosecutor and can conduct criminal proceedings himself. In this respect, employees should be aware that the role of the auditor can certainly change in the context of a customs audit and what signs exist for the opening of administrative offences or criminal proceedings.
8.Informing tax advisors and lawyers
Finally, you should inform your tax advisor and legal adviser that you will be subject to a customs inspection. In many cases, it is recommended that an advisor is available on the day of the customs inspection, at least in the background, so that you can coordinate at short notice.