Importers interested in U.S. Customs and Border Protection's (CBP) Importer Self-Assessment (ISA) program should be aware of a report the Department of Homeland Security, Office of the Inspector General (OIG) released this week concerning CBP's ISA program. The findings in this report will impact CBP's future management of the ISA program and likely lead to increased scrutiny of every ISA participant's compliance with the program requirements.
While the entire report is worth reading, OIG summarized its findings as follows:
CBP has not fully established key management controls for the ISA program. CBP has not clearly defined the program’s purpose, established performance measures, issued operating procedures to agency personnel, verified the effectiveness of applicants’ internal controls prior to acceptance into the program, or exercised effective oversight of participants’ compliance with program requirements. As a result, CBP does not have adequate tools to gain assurance that participating importers comply with federal trade requirements and, therefore, that government revenues are being protected.
Based on these findings, OIG made a number of recommendations to CBP (all of which CBP accepted). Of particular interest to ISA members, and companies interested in becoming ISA members, are the recommendations that CBP (i) assess the risks to trade compliance associated with the current policies and procedures for acceptance of importers into the program and establish internal controls to provide reasonable assurance of participants' compliance with trade laws and regulations, (ii) standardize the oversight of ISA members, and (iii) establish procedures to ensure that ISA participants’ annual self-testing results are requested and reviewed for compliance with program requirements by CBP. This third recommendation was also made to CBP in 2009, as part of a prior OIG review.
Based on this, we expect that CBP will begin scrutinizing both existing ISA members and new applicants much more closely than they have in the past.