INTRODUCTION TO

POST CLEARANCE
AUDIT
Definition/Scope
POST CLEARANCE AUDIT(PCA)OR AUDIT-
BASED CONTROLS are defined by the Revised
Kyoto Convention as measures by which the
Customs satisfy themselves as to the accuracy and
authenticity of declarations through the
examination of the relevant books, records,
business systems and commercial data held by
persons concerned.
Definition/Scope

is a critical control methodology for Customs and

other border regulatory authorities as it enables
them to apply a multi layered risk-based control
approach by moving from a strictly transaction-
based control environment to a stronger audit-
based administration
Definition/Scope

Transaction based controls are those controls

applied to each individual shipment at the time of
crossing the border, such as physical examination,
verification of value, origin and classification of
goods, sampling, verification of certificates,
licenses and permits, etc.
Definition/Scope
CUSTOMS POST ENTRY AUDIT
• a post release(of goods)evaluation

•verify the truthfulness or accuracy of the

declared customs value and tariff
classification of imports.

•allow an assessment of the importer’s

exercise or due diligence and its anticipated
customs compliance level.
Definition/Scope
ASSESSMENT:

Final determination of duty and tax done

At the port prior to the release of goods from
customs jurisdiction (performed by the
Formal Entry Division/ Assessment Division.
Definition/Scope
LIQUIDATION:

Done at the port after the release of goods

from customs jurisdiction aimed at identifying
possible assessment nonconformities and raise
additional duty and tax (performed by the
Liquidation and Billing Division).
Definition/Scope
AUDIT:

Final liquidation of import entries (goods

declaration) upon conduct of review,
evaluation, investigation, analysis of import
and pertinent company documents and field
audit of the importer (performed by the Post
Clearance Audit Group)
Definition/Scope
SECTION 707.
Ascertainment of the Accuracy of the
Declared Value.
Nothing in this section shall be construed as
restricting or calling into question the right of
the Bureau to ascertain the truth or accuracy
of any statement, document or declaration
presented for customs valuation purposes
Definition/Scope
When a declaration has been presented and
when the Bureau has reason to doubt the truth
or accuracy of the particulars or of documents
produced in support of such declaration, it
may ask the importer to provide further
explanation, including documents or other
evidence, that the declared value represents
the total amount actually paid or payable for
the imported goods, adjusted in accordance
with the provisions of Section 701 of this Act.
Definition/Scope
If in the course of determining the dutiable
value of imported goods, it becomes necessary
to delay the final determination of such dutiable
value, the importer shall nevertheless be able to
secure the release of the imported goods upon
posting of a sufficient security in an amount
equivalent to the duties and taxes in dispute
conditioned on the payment of additional
duties and taxes, if any, as may be determined
Provided, That prohibited goods shall not be
released under any circumstance.
Definition/Scope
If, after receiving further information, or in the
absence of a response, the Bureau still has
reasonable doubts about the truth or accuracy
of the declared value, it may deem that the
customs value of the imported goods cannot be
determined under method one, without
prejudice to an importer’s right to appeal
pursuant to Section 1101 of this Act.
Definition/Scope
Before taking a final decision, the District
Officer shall communicate to the importer, in
writing if requested, the grounds for doubting
the truth or accuracy of the particulars or
documents produced and give the importer a
reasonable opportunity to respond When a final
decision is made, the Bureau shall communicate
its decision and the grounds therefore in
writing.
Basic Audit Questions
Yes or No.
1. Exporters are not covered with audit
guidelines.
2. Locators in free zones like PEZA firms are
exempted from the audit requirements of the
Bureau of Customs.
3. Importations under informal entries shall not
be audited.
4. SGL companies are exempt from the records
keeping and audit requirements.
Basic Audit Questions
Yes or No.
5. Customs brokers shall not be part of the audit
activities of their importers.
6.When duties and taxes have been paid at the
port including additional assessment as
determined by the LBD, then the covering
import entries shall not be touched by the
PCAG.
7. Firms shall be audited primarily to generate
additional duties and taxes.
Basic Audit Questions
Yes or No.
8. Government importations are free from audit
procedures.
9. Customs auditors can no longer audit entries
beyond three years.
10. Customs auditors can no longer conduct
audit when importers have closed their
companies.
Basic Audit Questions
Yes or No.
11. Customs auditors can no longer touch
import entries that have been previously the
subject of WSD and have been released either
thru payment of fines or redemption values.
12. Customs audit cannot cover importations
with issues on IPR, illegal or unauthorized
withdrawals, permits, etc.
13 In the course of audit, an importer auditee
who was informed of a nonconformity can opt
to pay the amount even before a FAR is issued.
Basic Audit Questions
Yes or No.
14. When an importer has availed of a PDP due
to an issue he raised, (such as insurance
premium) Customs can only evaluate this issue
and can no longer raise other issue/s
15. The demand letters signed by the
Commissioner after the FAR when there is a
discrepancy must be paid within 15 days upon
receipt.