[Federal Register: June 17, 2002 (Volume 67, Number 116)]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
DEPARTMENT OF THE TREASURY
Importer Self-Assessment Program
AGENCY: United States Customs Service, Department of the Treasury.
ACTION: General notice.
SUMMARY: This document advises the public of the implementation of the
Importer Self-Assessment (ISA) program and describes the requirements
for participation in, and benefits under, the ISA. The ISA, which was
developed by Customs under its regulatory audit authority, allows
interested importers to assess their own compliance with Customs laws
and regulations. Participation in the ISA is open to all importers who
are participating members in the Customs-Trade Partnership Against
DATE: Participation in the ISA will be open to all qualified importers
beginning on June 17, 2002.
FOR FURTHER INFORMATION CONTACT: Customs Internet website (http://
www.customs.gov/imp-exp1/comply/isa.htm) or Russell Ugone, Director,
Trade Agreements Branch, Regulatory Audit Division (202-927-0728).
As a consequence of the passage of the Customs Modernization
provisions of the North American Free Trade Agreement Implementation
Act (Public Law 103-182, 107 Stat. 2057), an important objective of
Customs in the trade compliance process has been to maximize importer
compliance with U.S. trade laws while, at the same time, facilitating
the importation and entry of admissible merchandise. To meet this goal,
Customs has made a comprehensive effort to review, improve, and
redesign, on an ongoing basis, the trade compliance process using
established business practices, reengineered tools, and new
methodologies that improve customer service without compromising the
enforcement aspect of the Customs mission.
In order to enable interested importers to participate in a program
that would allow them to assess their own compliance with Customs laws
and regulations on a continuing basis, Customs on April 24, 1998,
published in the Federal Register (63 FR 20442) a notice of a plan to
conduct a test regarding the Importer Compliance Monitoring Program
(ICMP). On April 30, 2002, Customs published a notice in the Federal
Register (67 FR 21322) advising the public of the termination of the
ICMP test because importer participation in the ICMP remained below the
level anticipated by Customs when the ICMP procedures were developed.
That notice stated that the ICMP was being discontinued in favor of a
new program. The new program, Importer Self-Assessment (ISA) will
continue the self-assessment principles of the ICMP while relying on
new methodologies which provide upfront benefits and a more flexible
The purpose of this notice is to describe the operation of the ISA,
including the requirements for participation in, and benefits under,
the ISA program.
Description of the Importer Self-Assessment Program
The ISA program is a joint government-business initiative designed
to build cooperative relationships that strengthen trade compliance. It
is based on the premise that importers with strong internal controls
achieve the highest level of compliance with Customs laws and
regulations. The ISA program provides a means to recognize
and support importers that have implemented such systems.
All importers who are current members of the Customs-Trade
Partnership Against Terrorism (C-TPAT) may apply for ISA by signing an
ISA Memorandum of Understanding (MOU) and completing an ISA
questionnaire. Customs will then assess the applicant's readiness to
assume the responsibilities of ISA. When signed by both parties, the
MOU will establish a partnership between the importer and Customs and
will provide further benefits as described below. ISA applications will
be accepted beginning on June 17, 2002.
ISA Participation Requirements
In order to participate in the ISA program, an importer must:
1. Become a member with full benefits of the C-TPAT.
2. Be a resident importer in the United States with a minimum of
two years importing experience.
3. Agree to comply with all applicable Customs laws and
4. Have and maintain a system of business records that demonstrates
the accuracy of Customs transactions.
5. Complete an ISA questionnaire and sign an ISA MOU under which
the importer agrees to:
a. Establish, document, and implement internal controls;
b. Perform periodic testing of the system based on risk;
c. Make appropriate adjustments to internal controls;
d. Inform Customs through appropriate disclosures of material
errors identified through company reviews;
e. Maintain an audit trail from financial records to Customs
f. Maintain results of testing for five years and make test
information available to Customs on request; and
g. Submit an annual written notification to Customs to confirm the
identity of the company ISA contact, and confirm the importer continues
to meet the requirements of the ISA program as specifically listed here
and in the MOU.
6. Have the ability to connect to the Internet.
1. Required Information
Each application for participation in the ISA program must include
the following information and documentation:
a. The importer's name;
b. A unique importer number (for example, SSN, EIN, Customs
Assigned Importer, DUNS);
c. A statement certifying to the importer's participation in C-
d. A statement certifying to the importer's ability to connect to
the Internet; and
e. A signed ISA MOU and completed ISA questionnaire.
2. Customs Review of Application
After the importer has submitted an application, Customs will
review the company submission. This review will include a risk
assessment of the applicant and review of the application to determine
the applicant's readiness to assume responsibilities for self-
assessment. In some cases a Customs multi-disciplinary team may visit
the applicant to consult with the company, to discuss and review the
company's internal controls. This will not be an audit and will not
involve extensive testing. The purpose of the consultation is to
determine if the applicant is ready to assume the responsibilities of
self-assessment and to provide Customs assistance and training as
appropriate. If Customs determines that the company is not ready to
assume the responsibilities of self-assessment, Customs will continue
to work with the company to strengthen and improve their program. If
Customs determines the applicant is ready to assume the
responsibilities of self-assessment, Customs will sign the MOU.
Customs reserves the right, in its discretion, to approve or
disapprove an application. Further, in selecting applicants for
participation in ISA, Customs reserves the right to establish
priorities for the processing and approval of applications based upon
the volume and/or nature of each applicant's Customs transactions and
other factors, including whether the applicant had a previous
designation as a low-risk importer, whether the applicant made a prior
application under the ICMP test, and whether the applicant was engaged
in management processes involving a full-time Account Manager from
Customs. First priority will be given to importers with low-risk
ISA Potential Benefits
Once accepted into the ISA program, the importer becomes eligible
for the following benefits:
1. The importer will be entitled to receive entry summary trade
data, including analysis support, from Customs.
2. Consultation, guidance, and training by Customs will be
available to the importer as requested and as resources permit (for
compliance assistance, risk assessments, internal controls, Customs
audit trails, etc.).
3. There will be an opportunity to apply for coverage of multiple
4. The importer will be exempt from all comprehensive compliance
audits (accounts may be subject to onsite examinations for specific
reasons but will not be subject to comprehensive assessments of all
5. The importer will be able to use a hotline to Regulatory Audit
Division key liaison officials.
6. With respect to an importer's right to make a prior disclosure
pursuant to 19 U.S.C. 1592(c) or 1593a(c) and 19 CFR 162.74 when the
importer becomes aware of facts that may represent a violation of 19
U.S.C. 1592 or 1593a, an ISA participant may utilize the following
process: Unless, during Customs assistance, consultation or training
with an ISA participant, Customs becomes aware of errors in which there
is an indication of a fraudulent violation of 19 U.S.C. 1592 or 1593a,
Customs will provide a written notice to the participant of such errors
and allow 30 days from the date of the notification for the participant
to assess and, if determined necessary, to file a prior disclosure
pursuant to 19 CFR 162.74. This benefit does not apply if the matter is
already the subject of an on-going Customs investigation.
7. In the event that civil penalties or liquidated damages are
assessed against an importer, the importer's participation in ISA will
be considered in the disposition of the case.
8. The importer will have access to a Customs team consisting of an
Account Manager, an auditor and a trade analyst assigned to service ISA
9. Additional benefits may be made available, tailored to industry
needs (by mutual agreement).
ISA Continuing Participation Requirements
ISA participants must remain in compliance with the requirements of
the ISA MOU, which include the annual notification to Customs. In
connection with this notification, Customs will determine if additional
discussions or reviews of company controls or documentation are
necessary. In addition, ISA participants are responsible for making
appropriate ongoing changes to internal controls as needed.
As indicated above, ISA participants as a general rule will not be
subjected to any routine or periodic on-site reviews or audits, other
consultations with Customs account managers and auditors for training,
support and compliance improvement purposes. However, a participant may
be subject to an audit or on-site review of a specific issue related to
an identified trade compliance risk. In such instances, Customs and the
participant will work together to determine a mutually acceptable
course of action wherever possible.
If a participant fails to follow the terms of the MOU, fails to
exercise reasonable care in the execution of participant obligations
under the program or fails to abide by applicable laws and regulations,
the participant may be subject to removal from the ISA program. If
Customs believes that there is a basis for proposing the removal of a
participant from the ISA program, a written notice of proposed removal
will be provided to the participant and will apprise the participant of
the facts or conduct warranting removal. The participant may respond to
the proposed removal by writing to the Director, Regulatory Audit
Division, U.S. Customs Service, 1300 Pennsylvania Avenue, NW.,
Washington, DC 20229, within 15 days of the date of the notice of
proposed removal. The participant's response should address the facts
or conduct charges contained in the notice and should state how
compliance will be achieved. A final written decision on the proposed
removal will be issued to the participant by Customs after the 15-day
response period has closed. However, in the case of willfulness or
where public health interests or safety are concerned, a removal from
the ISA program may be effective immediately as a final action and
without opportunity for written response.
Detailed information concerning the ISA program is maintained at
the Customs Internet website (http://www.customs.gov/imp-exp1/comply/
isa.htm). The ISA Handbook available at that website contains general
information and forms needed to apply for the program and specific
information and details about program requirements and benefits.
Dated: June 13, 2002.
Douglas M. Browning,
Deputy Commissioner of Customs.
[FR Doc. 02-15308 Filed 6-13-02; 2:15 pm]
BILLING CODE 4820-02-P