What is Customs approach to compliance?
Our aim is to improve the level of voluntary compliance by clients.Customs does not examine every import or export transaction.
Instead, audits are used to confirm the integrity of information supplied in the self-assessment environment.
Audits are generally conducted by Customs officers using audit powers provided by the Customs and Excise Act, audits can be exercised in respect of imports and exports. Customs officers are also able to conduct audit activities under existing powers or licence conditions at licensed depots and warehouses.
What is Customs audit?
A Customs audit examines the records of clients after the import or export transaction has been finalised. Our legislation allows us to
examine records up to five years after the transaction. (Section 131 CA)
Audits can include:
Desktop audits - which are document verification checks of nominated transactions conducted at Customs offices. Desktop audits are generally conducted to monitor the activities of clients where a specific risk can be addressed by examining commercial documents and may involve a physical examination of the goods.
Focused audits - which are usually conducted at a client's premises to enable closer liaison with the client and for ease of access to computer and document-based records. The aim is to examine specific aspects of the client's interaction with Customs.
Warehouse verification audits - which are conducted in licensed warehouses. They involve verification of the data held by the company in order to substantiate the movement of goods into and out of the warehouse. Revenue payments and manufacturing processes (in warehouses licensed to manufacture) will also be verified.
Why was my company selected for an audit?
Customs has the authority to audit all client activity relating to customs, including imports, exports licensed warehouses, drawbacks, refunds, permits and taxes on imports.
Customs samples a range of companies in each industry sector to make an assessment about industry risks and compliance. Every client dealing with Customs has a chance of being audited.
The selection of clients for audit follows established risk management principles.
What happens in a Customs audit?
Customs will contact you about your selection for a Customs audit. You are welcome to include your Customs broker or any other representative in the audit process.
The audits will be conducted in as short a timeframe as possible to minimise the imposition on your business.
An entrance interview between the Customs audit team and key management personnel will be arranged to discuss the purpose, scope and timing of the audit. Any office accommodation requirements and access to company systems will also be discussed.
An exit interview will be conducted after the audit is completed. The audit team will give you a Company Audit Report and discuss with you any issues arising from the audit.
What will the auditors look at?
The audit team will examine the commercial documents (including electronic versions) that you must keep concerning your dealings with Customs. Some examples of relevant documents you may be asked to produce are:
- Accounting Ledgers;
- Bills of lading;
- Airway bills;
- Packing lists;
- Evidence of payment made or received.
What can I expect from Customs?
- You can expect the audit team to be professional at all times;
- You can expect Customs to answer any questions you have about the audit process;
- You have the right to expect Customs to observe privacy and confidentiality.
What if the audit team discovers errors in my records?
Customs primary concern is how errors can be avoided in the future. Where appropriate, Customs will recommend improvements to procedures to help prevent future errors.
The audit team will discuss any specific errors with you. Where legislated guidelines allow, errors will require adjustment. This may include revenue adjustments.
In some instances, penalties may be considered appropriate. You will have the opportunity to have the circumstances of the error considered by Customs.
If you disagree with the assessment of the audit team, you should contact the audit manager. It is your right to contest the outcome of the audit.
As a Customs client, you are legally responsible for your statutory obligations, even if you have paid for professional advice or assistance for your Customs dealings.
For more information on any Customs matter you can contact the Customs officer nearest to you.