What typically triggers a customs compliance risk assessment?

A customs compliance risk assessment is often triggered by findings of inaccuracies in previous customs filings. This is because such discrepancies can indicate underlying issues in a company’s compliance practices, suggesting that there may be a need for a deeper evaluation of how customs-related data is collected, reported, and managed. By identifying inaccuracies, customs authorities may prioritize further scrutiny to ensure that trade regulations are being followed and to mitigate potential risks such as financial penalties, legal ramifications, or trade violations.

The potential for inaccuracies can prompt not only a review of past filings but also a re-evaluation of the systems and processes in place that govern compliance. When unacceptable levels of inaccuracies are present, organizations may not only be at risk of penalties but could also affect their reputation and relationship with customs authorities.

Though factors like high tariffs, exports to high-risk countries, and changes in international trade agreements can suggest areas of focus in customs compliance, they do not directly point to inadequacies in a company's practices. Inaccurate filings specifically indicate an immediate concern that necessitates a detailed assessment to ensure compliance going forward.