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Five (hidden) information about the upcoming customs audit

Each customs inspection begins with an inspection order. In this respect, the test regulation is of outstanding importance for the customs examination.

Companies should therefore read the audit order carefully. Under no circumstances should the examination order “disappear into the drawer” and wait until the external examination begins.

At least five important information can be read from each test order to give you an idea of what you can expect during the test and within which framework the customs inspector may move.

No customs inspection without a test order

A customs inspection is only possible if an inspection order has been issued. This test order is issued by the main customs office. The main customs office, which is responsible for the company’s headquarters, is responsible for this. The examination regulation is the minimum requirement for every customs examination.

A customs inspection without a test order is illegal.

As a rule, the audit order is accompanied by a leaflet explaining to the company the most important rights and duties to cooperate in the customs audit. Many companies that have their first customs audit should therefore read the fact sheet carefully.

Important (hidden) information in the test order

The audit order contains a great deal of important information; this concerns the period, the legal basis and the subject matter of the audit. However, hidden information can also be found in an examination order for the customs examination. Anyone who knows how to read a customs inspection order may therefore have decisive advantages. The five most important hidden information in a customs audit order and its meaning will be explained below.

The most important (hidden) points that you can find in a customs inspection order are

  • Whether customs are based on intentional behaviour in your company,
  • How much time you have left to prepare the customs inspection yourself within the framework of an upstream pre-audti,
  • Whether there are concrete suspicions against your company,
  • whether inconsistencies are to be expected with the final customs inspection.

How much time remains for preparation: Start date of the examination

The test order contains the date on which the customs examination will begin. Some customs examination regulations only contain the note that the date will be announced separately. The main customs office will then also contact the company by telephone to arrange an appointment. As a rule, however, no more than three months should elapse between the notification of the test order and the start of the test.

The timing of the start of the audit is very important for companies. There is still the possibility of correcting any irregularities in imports in recent years before the auditor is in the company.

It is recommended that the management be shown several sample import processes in order to assess whether there may be weaknesses in customs clearance. If employees are unsure whether import processing has really gone smoothly, they should therefore use the time to carry out a self-check as part of a “pre-audit” and determine whether customs processing has actually been carried out properly.

Indication of intentional behavior: The period to be checked

The time period to be audited in the company is also of particular importance. As a rule, the customs inspection relates to the last three years. Companies must check here whether a period which has already been checked during the previous customs audit may not have been mentioned in the audit order. A double check is not normally carried out by customs. If this is the case, there seems to be a concrete suspicion at customs that the company has irregularities. This should give us cause for our own research.

The length of the audit period may also provide an indication as to whether customs may have specific suspicions against the company. While a three-year review is the norm, a longer review period may indicate that Customs believes that there may be intentional non-compliance by the company.

Important: The last exam was not three years ago? This indicates that customs has specific suspicions of an infringement.

The rotation of the check also gives a hidden indication of what the customs authorities assume. If the last test was about three years ago, there is every reason to believe that you as a company are simply audited on a regular basis. However, if the last inspection was only one year ago, customs probably ordered a so-called case-related inspection on the basis of specific suspicions. Even then, the pre-audit should critically examine whether there may have been violations that customs now wants to check.

Concrete suspicions against your company: The scope of the test

The audit order also sets out the scope of the customs audit.

For example, there are various audits by the tax authorities:

  • Examination of import duties within the framework of a customs inspection;
  • Examination of the extent to which excise duties have been paid properly;
  • Suction. Preference checks to determine whether the export was carried out with proper proofs of preference;
  • Foreign trade audits that ensure compliance with export law and export controls.

Companies must therefore first determine exactly which area is being examined. Depending on the scope of the examination order, the relevant documents must be selected during the customs examination.

It is also possible that only certain transactions are to be checked (for example, imports from a certain manufacturer). In this case, the test order specifies which processes are meant. This also suggests that there are specific suspicions on the part of customs that these imports were not correct. These processes should therefore be examined very critically in advance and other – but similar processes – should also be dealt with urgently before the start of the inspection.

Important: The test regulation limits the rights of the examiner. If more tests are actually to be carried out in the examination than specified in the examination warrant, the examiner requires a supplementary examination warrant from his main customs office.

In this respect, the test order also limits the rights of the customs examiner. For this reason, it is also advisable to read the examination regulations.

Are there threats of contradictions to the final test? Which customs auditor carries out the check

Attention should also be paid to which customs inspector carries out the inspection. Often the same examiner is involved in new exams as before. This has the advantage for companies that they already know which auditor they will be dealing with. Every inspector has certain test focal points or peculiarities. It can therefore be reassuring to know who will carry out the customs inspection.

If the inspector is a different inspector from the previous customs inspection, companies should read the latest customs inspection report carefully again. In consulting practice, it happens time and again that a new customs auditor suddenly takes a different legal view than the previous auditor, for example in the context of the tariffing of goods.

It has already happened that – although a product was”waved through” in another customs inspection – it then comes to an additional debit.

So if there are inconsistencies between different customs audits, the auditor should in any case be confronted with the findings of his colleague.

However, it should be noted that the customs inspector as such cannot necessarily be rejected. Which auditor carries out the customs inspectors is therefore not a verifiable administrative act of the customs authority. However, if there are serious doubts about the independence or bias of the auditor, legal action may also be taken against the appointment of the customs auditor.

Who needs to prepare Name of the company concerned

The audit order must also specify the addressee of the customs audit. Within a group, therefore, only the company specified in the audit order is obliged to participate in the customs audit.

If information is required from other companies of the same group of companies, an independent audit order is required here.

Companies should in any case check whether they have been correctly identified in the customs control order. An improper designation or delivery to the wrong company can lead to the nullity of the test order.

Advantages if the customs inspection order is read carefully

As we have been able to ascertain, therefore, useful information arises from the main customs office’s examination regulations. Those who simply put the test order aside may be surprised by the scope and content of the customs test.

Too much information may also be processed in advance if Customs had actually ordered only a partial check. A partial audit should therefore be critically questioned by the management as to why these processes in particular should be examined.

Particularly in the case of partial audits, companies must also consider the possibility of extending the audit. For example, if internal control has established that the transactions to be audited are correct but there may have been irregularities in other (comparable) transactions, companies must decide whether they may want to use this knowledge to offensively approach the auditor. Without an extension of the test order, the examiner cannot check the other procedures, but the main customs office often extends the scope retrospectively without problems.

Finally, it should be noted that from a legal point of view, the main customs office’s examination order constitutes a so-called administrative act. In this respect, it is even possible to appeal against the test order. The main customs office must then correct this in the event of an incorrect test order. However, tax assessments issued on the basis of an unlawful test order are also illegal and must be repealed. This is because the findings of a customs inspection which has not been properly ordered may not be used. However, there are exceptions to this rule of law. For example, if taxes are set for the first time despite an unlawful test order, the ban on exploitation does not apply.

 

Attorney Dr. Tristan Wegner

Ihr Ansprechpartner

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