According to Customs and Border Protection (CBP), one of the responsibilities of an importer is to follow the recordkeeping requirements for all customs documents and import transactions. All records from the time of a purchase request to final disposition of the merchandise are included. Even when an importer utilizes the services of a third-party provider such as a licensed customs broker, the importer is still responsible to obtain and store all required records.
Customs Documentation that must be Stored
Chapter 163 of the 19 Code of Federal Regulations (19 CFR) explains that the term “records” refers to documentation pertaining to the following customs-related business activities:
- Importations
- Goods transported while in-bond
- Drawback claims
- Completing a North American Free Trade Agreement (NAFTA) export Certificate of Origin
- Collecting and paying fees and taxes due to CBP
- Other activities required to follow CBP laws and regulations
An exhaustive list of the specific documents that must be kept can be found in section 509(a)(1)(A) of the Tariff Act (19 U.S.C. §1509(a)(1)(A)). The list is also included in 19 CFR chapter 163 and in the Informed Compliance publication on customs recordkeeping. In general, the following must be retained for all of the transactions listed above:
- Documents, declarations, and statements
- Data generated electronically or machine readable
- Electronic stored or transmitted data or information
- Correspondence, papers, and books
- Financial accounting data
- Technical data
- Computer programs used to retrieve data in a readable format
Customs recordkeeping requirements apply to owners, importers, consignees, importers of record, entry filers and any other individual who performs one of the following commercial activities:
- Imports goods into United States customs territory
- Submits a claim for drawback
- Stores or transports goods in-bond
- Knowingly causes an import transaction or in-bond movement
- Any party that acts as an agent for any of the individuals listed above
- An individual who is involved in activities that require the filing of an entry or declaration
Retention of Customs Documents
In general, all required documents must be kept five years from the time of entry or the date of the related activity. There are a few exceptions with different retention requirements that can be found in the customs regulations. Records must be kept in their original format, but approval to use an alternative storage method can be requested (such as retaining scanned copies). Even if CBP approves alternative storage, originals must be kept for 120 days.
Customs may require documents to be produced at any time during the retention period. This may be part of an audit or a formal Request for Information. Written notice of the request will be provided and records must be submitted to customs within 30 calendar days. It is critical to store documents in a safe place and in an orderly fashion for easy retrieval. Unless the individual can prove documents were destroyed by an event such as an act of God or natural disaster, failure to produce requested documents can result in hefty fines and penalties.
Internal Control Procedures for Customs Recordkeeping
An important part of every importer’s compliance program should be recordkeeping procedures. In Mastering Import & Export Management by Thomas Cook, record retention is included as part of the overall recommended structure for compliance management. The book explains that a good compliance strategy should include “…the ability to create, implement, and audit internal centralized recordkeeping practices of the company.”
CBP offers a voluntary Recordkeeping Compliance Program to encourage importers to adapt good recordkeeping procedures. Those who meet the requirements of the program receive the benefit of alternatives to first-time recordkeeping penalties and greater mitigation should a later penalty be received.
Using good internal control procedures for storage of customs documents will keep one compliant with customs laws and regulations, and prepared should CBP request the documents. When the correct documents are kept in an organized fashion, following the recordkeeping requirements is easy.
Sherri Nield - Sherri Nield has a Bachelor of Science degree from the Indiana University Kelly School of Business. Her major was Business Administration ...
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