Post Clearance Audit

Post Clearance Audit

Is the structured examination of an importer’s books and records, as a means to measure and improve compliance. Post Clearance Audits are conducted after the clearance of goods and can be for a period of two (2) years for valuation purposes, three (3) years for compliance or seven (7) years for fraud. Any company or individual, that imports or exports goods to and from Jamaica can be audited.

Reasons Post Clearance Audit

The primary objective of PCA is to ensure compliance in a trade facilitating environment. The documentation which is required to be produced at the time of importation does not provide the whole picture and context of a commercial transaction. Therefore, the verification of accuracy and authenticity of the declarations made by importers/traders becomes necessary. Post clearance audit allows customs to change the approach from a purely transaction based control to a more comprehensive, company-oriented control.

Audits are conducted by our offices in Kingston and Montego Bay.

Companies are selected based on:

1. Risk analysis – The unit works in close collaboration with the Risk Management branch, from which it relies heavily on the referral of cases  or Internal Risk assessment.
2. Industry

Types of Customs Audits:

1. Desk reviews – Review of declarations previously submit are done at the customs office (takes about 2-4 weeks to be conducted).
2. Field audits – Reviews of documents are done at the importer’s place of business. (takes approximately 6-8 weeks to be conducted). These audits are usually compliance based, valuation or incentive related

Approaches to Audit:

1. Investigative approach- includes the execution of a Search Warrant (Section 203 of the Customs Act) and search of premises
2. Co-operative audits – the importer is informed of the impending audit, an interview is conducted to gather background information, and the importer supplies his import and financial records for review.

Sections 223 and 223A of the Customs Act and the Customs (Amendment) Act (2014) respectively, provide auditors with the authority to conduct audits.

Powers include:

1. The right to access auditee’s premises
2. The right to inspect auditee’s premises
3. The right to examine business records, business systems and commercial data
4. The right to uplift, copy and retain documents and records pertaining to the business
5. The right to confiscate hardware (eg – computer hard drive) where necessary
6. The right to inspect and take samples of goods imported.

Obligations of Auditors

Auditors have a responsibility for keeping all information, electronic data and documents of economic operators private and confidential (Section 4A – Customs (Amendment) Act, (2014)

Obligations of Importer

1. To provide to  the proper officer any documents pertaining to goods imported as requested.

The Right of the Importer

1. 1. The right to object any assessement raised(Section 17 of the Act)

Typical documents reviewed during PCA:

1. Import documentation
2. Contracts
3. Suppliers’ Statements
4. Goods Received Notes
5. Costing Records
6. Sales Records
7. Payment Records (Telegraphic Transfers, Bank Drafts & Letters of Credit, Credit Cards etc.)
8. Charts of Accounts
9. Freight Forwarders and Consolidators Records
10. Audited/ Draft Financial Statements
11. Any other documents relating to importation, exportation or disposal of imported goods.

Failure to produce the documents will result in the importer being cited breach of Section 223 of the Customs Act.

The Audit Process

1. Entry conference (interview and administer questionnaire)
2. Document review and data analysis
3. Communicate audit findings
4. Exit conference – discussion of audit findings

The entire process typically takes eight (8) weeks