(based on WCO PCA Guidelines, Vol.1)
“A structured examination of a business’
relevant commercial systems, sales
contracts, financial and non-financial
records, physical stock and other assets as a
means to measure and improve compliance.”
 AN


A

ENFORCEMENT TOOL
NOT A MEANS OF INVESTIGATING POSSIBLE FRAUD
WHERE FRAUD IS SUSPECTED, REFER TO
INVESTIGATION SPECIALISTS
FORM OF INTERNAL AUDIT
NOT DESIGNED AS A MECHANISM FOR CHECKING
CONTROLS CONDUCTED BY CUSTOMS AT THE
FRONTIER





To assure that Customs declarations have been completed
in compliance with Customs requirements, via examination
of a trader’s systems, accounting records and premises;
To verify that the amount of revenue legally due has been
identified and paid;
To facilitate international trade movements of the
compliant trade sector;
To ensure goods liable to specific import/export controls
are properly declared, including prohibitions and
restrictions, licenses, quota, etc.;
To ensure conditions relating to specific approvals and
authorizations are being observed








Compliant trade facilitated at time of Customs clearance
Customs gain better information and understanding of
clients’ business
Risk levels more easily assessed and reviewed
Facilitates client education and comprehensive compliance
management focus
Customs can promote concept of voluntary compliance and
self-assessment
Customs administrations’ resources more effectively
deployed
Suspected fraudulent activities may be identified
Provides platform for evaluating entitlement to certain
authorisations; e.g. AEO status
 Post-importation
transaction verification
Port referrals
 Risk selection
 Disputed decisions/ importer requests

 Field

/ on-site audit
Risk selection
 Office/

desk audit
Risk selection
 Large
business focus – special teams
 Transition
from border-focused controls to
PCA as the prime basis for Customs controls
typically evolves over several years
 PCA implementation should be embedded in
a wider facilitation/modernization context
 Infrastructure considerations
 Consider as a first step, post-importation
transaction-based controls
Legal and operational framework
Strategic Planning
Risk Management
Relationship with other departments
Customs laws and regulations should provide the
authority to conduct an audit at the premises of
the auditee. Necessary powers include the right
to:





access auditee’s premises;
examine business records, business systems, commercial
data relevant to Customs declarations;
inspect auditee’s premises;
uplift and retain documents and business records;
inspect and take samples of goods.
Customs laws and regulations should set out the
rights and obligations of persons & companies
involved in international trade. Provisions
should include:


The requirement to maintain specified documentation,
information and records
The duration for retaining such records (no less than the
maximum period after importation for effecting duty
adjustments)





requirement to make such documentation, information and
records available in a timely manner;
right to appeal ;
right to an explanation from Customs concerning
determination of Customs value;
right to expect confidential treatment of business
documentation;
right to clearance of goods at the frontier with provision of
security.
The audit plan should include the following :

How importers will be selected/targeted

How to improve compliance via self-assessment

How to manage resources for PCA

Relationship with other Customs sections:

e.g. border control, risk management, enforcement etc.
All auditors need a range of general skills including:






accounting techniques and principles :
knowledge of auditing standards and procedures;
familiarity with Customs laws and regulations;
general knowledge of Customs procedures (valuation,
classification, origin, etc.);
knowledge of computer-based accounting systems;
commercial awareness and knowledge of business
strategies in international trade
Additional specialist skills include:




Customs Valuation, Tariff Classification (as required)
I.T.-based accounting
Multi-national corporation accounting, including transfer
pricing
specialist trade sector knowledge
PROFESSIONAL
SKILLS AND
KNOWLEDGE
EQUITY AND
IMPARTIALITY
DUE CARE AND
DILIGENCE
INTEGRITY
CONFIDENTIALITY
PCA is the most effective means of ensuring compliance :
thorough verification requires access to importers’ records
and accounting system.
 Not a practical tool for informal traders :





Problems locating the trader
Lack of a structured accounting system and supporting books and
records, etc.
Cash payments etc.
Customs should encourage all operators to improve
compliance, including informal sector
Provide opportunity and incentive to formalize their
procedures in line with Customs requirements.