STRATEGIC

PLANNING FOR
POST-CLEARANCE
AUDIT (PCA)
(based on WCO PCA Guidelines, Vol.1)
SUMMARY OF SESSION
What PCA is/isnt
Objectives & benefits of PCA
Process and considerations for introduction
of PCA process
Legislation
Training needs
Strategic management
Resource considerations
Limitations of PCA
 WHAT IS POST
CLEARANCE AUDIT (PCA)?

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.
WHAT PCA ISNT!
AN ENFORCEMENT TOOL
NOT A MEANS OF INVESTIGATING POSSIBLE FRAUD
WHERE FRAUD IS SUSPECTED, REFER TO
INVESTIGATION SPECIALISTS

A FORM OF INTERNAL AUDIT

NOTDESIGNED AS A MECHANISM FOR CHECKING
CONTROLS CONDUCTED BY CUSTOMS AT THE
FRONTIER
WHAT ARE THE OBJECTIVES OF PCA?
To assure that Customs declarations have been completed
in compliance with Customs requirements, via examination
of a traders 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
BENEFITS DERIVED FROM PCA
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
TYPES OF POST-IMPORT CONTROLS
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
STEPPING STONES TOWARDS
AN EFFECTIVE PCA SYSTEM

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
PROCESS FOR INTRODUCING AN
EFFECTIVE PCA SYSTEM
Legal and operational framework

Strategic Planning

Risk Management

Relationship with other departments

OVERVIEW OF THE PCA PROCESS
REVIEW AND
UPDATE
MANAGEMENT
DATA

REPORT
PLAN AUDIT
EVALUATE PROGRAMME
FOLLOW UP

SELECT
CONDUCT
COMPANIES
FIELD AUDIT
FOR AUDIT

PREPARE
FOR AUDIT
GROUP EXERCISE ON LEGAL POWERS,
RIGHTS AND OBLIGATIONS
List:

1. Legal powers for Customs

2. Legal obligations on commercial operator
3. Legal rights of commercial operator
LEGAL AND OPERATIONAL FRAMEWORK
- AUTHORITY AND POWERS OF CUSTOMS OFFICERS

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 auditees premises;
examine business records, business systems,
commercial data relevant to Customs
declarations;
inspect auditees premises;
uplift and retain documents and business
records;
inspect and take samples of goods.
LEGAL AND OPERATIONAL FRAMEWORK
- OBLIGATIONS AND RIGHTS OF AUDITEES (I)

Customs laws and regulations should set out

the rights and obligations of persons &
companies involved in international trade.
Provisions should include:
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)
LEGAL AND OPERATIONAL FRAMEWORK
- OBLIGATIONS AND RIGHTS OF AUDITEES (II)

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.
INTRODUCTION OF STRATEGIC PLANNING
FOR PCA
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.
TRAINING NEEDS AND
PROFESSIONAL SKILLS (I)
All auditors need a range of general skills including:
accounting techniques and principles, based on
Generally Accepted Accounting Principles (GAAP);
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
TRAINING NEEDS AND
PROFESSIONAL SKILLS (II)
Additional specialist skills include:
Customs Valuation, Rules of Origin, Tariff
Classification (as required)
I.T.-based accounting
Multi-national corporation accounting, including
transfer pricing
specialist trade sector knowledge
COMPETENCIES OF AUDITORS

PROFESSIONAL
SKILLS AND
KNOWLEDGE

EQUITY AND
INTEGRITY
IMPARTIALITY

DUE CARE AND

CONFIDENTIALITY
DILIGENCE
LIMITATIONS OF PCA
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.