The audit opens with a risk assessment and a pre assessment survey: questionnaires and documents about your organisation, your broker relationship, and your procedures for each review area. Then comes acceptance sampling on selected areas, classification, valuation, origin and free trade claims, antidumping exposure, where statistical samples decide whether an area passes or expands into deeper testing. Errors found in a sample can be projected across the entry population for that area, which is how a handful of bad entries becomes a seven figure exposure.
Importers lose time by treating the survey as paperwork. The answers you give define the controls the auditors then test. Claiming a review procedure that does not exist is the worst opening move available. Claiming a modest procedure that does exist, with records, gives the audit something true to test and your team something it can actually defend.
Transaction value sounds simple until the assists are counted: tooling, moulds, materials, or design work the buyer supplied free or cheaply that must be added to the entered value, plus royalties, packing, and proceeds of resale in the cases the statute names. Many importers undervalue for years by leaving an assist out of every entry, innocently and consistently. Consistency is what makes it expensive: a systemic error projects across the whole audit period.
Related party pricing draws the same scrutiny. Buying from a parent or a sister company invites CBP to test whether the relationship influenced the price, and the defence is documentation prepared before the audit: the test values or circumstances of sale evidence your pricing file already holds. Reconstructing that file after the audit letter is possible and looks exactly like what it is.
If your own review finds a material error, a prior disclosure to CBP, filed before the audit or investigation reaches you and with the duties tendered, can substantially limit penalties. Filed after CBP has notified a formal investigation of the same matter, the same disclosure buys far less. That timing gap is the entire argument for doing your own entry review on a schedule instead of waiting to be selected.
A disclosure is not an admission to improvise. It needs the error defined, the entry population identified, the loss of revenue calculated, and counsel involved before filing where exposure is real. A sloppy disclosure that understates the population can be treated as not made in good faith, which is worse than a careful one filed a month later but still before CBP knocks.
Per product family, keep the classification reasoning, any rulings, the broker instructions you actually sent, origin evidence, and the value build including assists. Keep the error log too: mistakes you found and corrected yourself are the strongest evidence a control system exists. Auditors trust a system that catches its own errors far more than a claim that no errors occur. One of those systems is real.
Run a sample review annually against the same areas CBP tests and fix what it finds while the fixing is voluntary. Confirm current audit practice with your broker or trade counsel, because programme details and priorities shift, and prepare on your facts.
By risk: entry volume, duty exposure, product sectors, prior errors, and referrals all feed selection. There is no safe volume below which an audit cannot happen, only a lower likelihood.
Where a statistical sample shows errors, CBP can project the error rate across all entries in that review area for the audit period. A small sample problem can therefore become a population sized duty bill, which is why sample responses matter.
No. The importer of record is liable for the entry statements. A broker's work is part of your control system, and your instructions to the broker, and your review of their filings, are exactly what an audit examines.
As soon as a material error is confirmed and scoped, and before CBP notifies you of an audit or investigation covering it. Get trade counsel involved to scope and file it correctly, because the timing benefit depends on the disclosure being complete.