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Recordkeeping Compliance Essentials

In regards to trade compliance, the bottom line objective for importers is to avoid customs audit and customs penalties while growing a business and increasing revenue. While HTS classification, export compliance and valuation may be at the top of the internal audit list, one area that importers may not revisit frequently is Recordkeeping.  However, as increased environmental consciousness spurs many importers to switch to “paperless” operations now is the time to consider CBP rules regarding Recordkeeping compliance.  

Recordkeeping Basics

In general, U.S. Customs requires importers to maintain original records whether in paper or electronic format for a period of 5 years. Exceptions to the 5 year rule include any recordkeeping related to a drawback claim and records pertaining to entries valued at $800 or less. Additionally, there are reduced recordkeeping timeframes for storage of packing lists and also for documents in which a consignee who is not the owner assigns a broker to retain the documents[i].

Importers are able to utilize alternative storage methods for records after having provided advanced written notification to the CBP Director of Regulatory Audit at least 30 days prior to implementation.  Frequently used storage methods include, machine readable data, CD ROM and microfiche. Standards for maintaining alternative storage methods include: operational and written procedures, effective labelling, annual internal test of the system, ability to make hard-copy reproductions on demand, retention of entry records for 120 days from release/conditional release period, maintenance of one working copy and one back up copy by importer at a secure location.[ii]

Failure to Comply

19 CFR 163 outlines two levels of monetary penalty for failure to maintain and procure records upon CBP demand. The two levels of penalty are willful failure and negligent failure. Importers found to be acting out of willful failure can result in a penalty not to exceed $100,000 for each release of merchandise. Importers found to be acting out of negligence is subject to a penalty not to exceed to $10,000 for each release of merchandise. Importers should also be warned that investigations or audits are likely to be initiated if an importer is not able to procure records upon CBP Demand.

The Allyn Difference

Allyn International has an in house Electronic Recordkeeping Module that gives importers the ability to access and retrieve records quickly and confidently. Allyn’s web-based recordkeeping module is a part of our proprietary customs and logistics software, ALA™.  It allows for upload, storage and querying of documents.  This best in class recordkeeping solution allows importers to have confidence knowing their documentation is safe and readily available.  

For more information on our Electronic Recordkeeping Module or on how Allyn can assist you in optimizing your recordkeeping compliance in an increasingly “paperless” workplace please contact Allyn International at Sales@AllynIntl.com

 

Allyn Contributor: Danielle Brazil Hudson, LCB

[i] 19 CFR 163.4(b)

[ii] 19 CFR 163.5  (2) 

 

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