Post Clearance Audit

Corporate Services Audit & Compliance Audits Post Clearance Audit

What is a Customs Audit?

A Customs audit is an evaluation of company practices and records. The audit assists in judging:

  • The integrity of information supplied under self-assessment
  • The level of compliance with legislative requirements

ℹ️ Important Legal Responsibility: As an importer or exporter, you are legally responsible for the accuracy of information supplied to Customs, even though you must use a Customs Broker to prepare and lodge your declarations.

For your own protection:

  •  Ensure you examine and retain all documents supplied to Customs
  •  Check them for accuracy
  •  Advise your broker of any errors

How Customs Works – The Audit Approach

To help business move goods quickly, Customs cannot scrutinise every transaction. Instead, audits are used to confirm the integrity of information supplied.

Primary Goal To maximise voluntary compliance and eliminate future errors.
Sustained Compliance Customs wants to help you achieve and sustain compliance over time – not just improve compliance on a "hit-and-miss" basis.
Your Role You need to look carefully at all your customs-related business systems, processes, and procedures.

The Audit Process – Step by Step

Step 1: Entrance Interview

Customs will arrange an entrance interview with you to discuss the proposed audit, including:

  • Which transactions are to be examined
  • What documentation is required to be produced to the audit team
Step 2: Self-Examination (Recommended)

You are encouraged to examine your transactions prior to audit. Errors reported to Customs voluntarily will be viewed favourably.

Step 3: Exit Interview

Customs will conduct an exit interview with you to discuss:

  • The assessment made about your level of compliance
  • What, if any, further action is required by you

Common Errors Leading to Reduced Compliance

Customs has identified some of the more common reasons for reduced compliance.

Failure to retain adequate records

All relevant commercial documents must be retained for five years from the date of the transaction with Customs.

Origin incorrectly identified

Confirmation of country of origin is required in order to claim preferential rates of duty.

Failure to disclose related transactions

The value of goods can be influenced by related party transactions. An adjustment for the value may be needed.

Incomplete information passed to Customs Agent

Errors may occur if all relevant information is not passed on to the person selected to assist in clearing your goods.

Misuse of a TC number

The importer's TC number must be used on all import entries for that entity.

Self Assessment

Remember, every person dealing with Customs has a chance of being audited. If you make false or misleading statements to Customs you will face the prospect of the imposition of sanctions, up to and including prosecution in a Court of law.

Imports incorrectly entered
  •  All imported goods must be declared to Customs in the approved form, be accurately described, and correctly classified using the Harmonised Tariff.
  •  Any surplus goods must be reported.
  •  Items not ordered, samples, and promotional merchandise must also be entered.
  •  If merchandise is received but not included in the Customs entry, an application to lodge an amending entry should be made immediately.
  •  Voluntary payments of additional duty will not be penalised. However, in a self-assessment environment, importers could be subject to penalties if errors are detected during an audit.
  •  If duty has been paid on merchandise that is not received, you may be eligible to apply for a refund of duty.
  •  Customs provides a tariff advice service for importers who are in doubt as to the correct classification or concession.
Customs value does not include all associated costs

All costs associated with the goods are legally required to be considered when determining the Customs value. These may include costs relating to:

  •  Advertising
  •  Assists
  •  Commissions
  •  Credits
  •  Escalation charges
  •  Indirect payments
  •  Rebates
  •  Research and development
  •  Royalties

Customs provides a valuation advice service for importers.

Reporting requirements for exports
  •  Goods must be entered for export before they are placed on board any conveyance and within 3 days before entry outwards of that conveyance.
  •  All goods that require a permit, regardless of the value of the goods, must be reported to Customs using an export declaration.
  •  All export goods are subject to Customs control when they are received at the place of export – for example wharf, airport or depot.

Key Legislation Reference

Record Retention Five years from date of transaction with Customs.
Export Reporting Goods must be entered for export before being placed on board and within 3 days before entry outwards.

Customs Advisory Services

Tariff Advice Service

For importers in doubt as to correct classification or concession. Applications accompanied by supporting evidence should be lodged with Customs.

Valuation Advice Service

For importers needing assistance with determining Customs value. Applications accompanied by supporting evidence should be lodged with Customs.

⚠️ Remember, every person dealing with Customs has a chance of being audited. If you make false or misleading statements to Customs you will face the prospect of the imposition of sanctions, up to and including prosecution in a Court of law.

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