Issue 311, August 7, 2001
Customs intends to reinstate the Importer Compliance Monitoring Program (ICMP). Previously tested from 1998 to 1999, the ICMP is a voluntary program for measuring Customs compliance, where participants self-assess their level of compliance with the Customs laws and report their findings to Customs. If the results show that the importer is compliant, Customs designates it "Low Risk" for trade compliance purposes.

Why should a company volunteer to subject itself to Customs scrutiny? Because Customs is now bestowing conditional Low Risk designation during the review period on all ICMP participants accepted into the program. Being designated Low Risk means fewer cargo exams, which translates into improved clearance cycle times, reduced warehousing and other related expenses, and less Customs involvement with a company's imports.

An importer has to apply and be accepted into the ICMP. Thereafter, risk areas for testing will be identified by Customs. A designated number of entries will be tested and the company's importing processes and systems will be reviewed. The actual testing conducted by the importer will mirror the methodology currently employed by Customs in its CAT reviews.

The program should be less intrusive than a CAT review. Customs will spend less time on site, and only those areas of an importer's operations identified as posing a risk will be subject to the self-assessment. Errors disclosed as a result of self-assessment may be treated as prior disclosures, as long as the disclosure meets the legal standards set out in 19U.S.C.?1592 and its implementing regulations.

Who should consider this program? With Customs now extending the universe of importers potentially subject to compliance reviews from the top 1000 importers to the top 3000, more companies will be exposed to the possibility of formal Customs review. The goal of the new ICMP is to provide compliant importers some tangible benefit for their efforts to exercise reasonable care and meet their Mod Act responsibilities. Unlike companies subject to CATs or Customs' new program, the Focused Assessment, those participating in the ICMP benefit from Low Risk designation during the period of the review, proceed on a self-paced schedule over a three year period, and will have fewer direct dealings with Customs auditors.

Those companies that have, are, or contemplate undergoing some form of internal self assessment should consider if the ICMP is appropriate for them, and if so, what necessary steps should be taken prior to applying for admission into the program. Questions regarding the ICMP can be directed to the author.

Our contributing writer, F.D. "Rick" Van Arnam, is a Partner at the international trade and Customs law firm of Barnes, Richardson & Colburn in New York, and can be reached at (212) 725-0200 or rvanarnam@brc-ny.com.

Please note that due to the complex nature of the subject matter, Danzas AEI cannot be responsible for actions taken by the reader in reliance on the information contained herein without prior consultation with Danzas AEI.