Customs Coming Back Around on Compliance Audits

Before 1993, US customs used a “gotcha” approach to identify firms guilty of evading import tariffs: It relied on field officials and snitches to notify them of transgressors. However, the Customs Modernization Act of 1993 obligated customs and importers to share the burden of compliance; while customs agreed to teach importers about compliance, importers consented to “exercise reasonable care in conducting import transactions and to maintain adequate records to support their decisions.” Customs performed “compliance assessment audits” to detect any indiscretions and fined importers in breach of regulations. It also categorized importers...