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CTPAT Trade Compliance Handbook | October 2022
• Use of special trade programs such as free trade agreements, special duty provisions such
as Harmonized Tariff Schedule of the United States (HTSUS) Chapters 98 and 99,
Antidumping/Countervailing Duties, etc.
• Complexity of HTSUS classifications to types of merchandise imported.
• Use of a Basis of Appraisement other than Transaction Value.
• Use of “first sale” for valuation.
• Use of Landed Duty Paid terms of sale.
• Payments in addition to the price paid or payable (i.e., packing, selling commissions,
assists, royalties, and license fees, and proceeds from subsequent resale).
• Quality and quantity of pre- or post-entry reviews.
• Organizational changes that may affect the commitment to compliance, new management
structure, reduction in staff, etc.
• Changes to core business, addition of new product lines, and/or use of new manufacturers;
and,
• Impact of communication between CBP and the company (i.e., internal advice/ruling
decisions/information requests/notices of change liquidation).
RISK ASSESSMENT EXAMPLE SCENARIOS
Example Scenario 1: XYZ Company utilizes an automated system for its post- entry
valuation review, which is a three-way match of the purchase order value, invoice value, and
entry summary value. Any differences between the three values causes a discrepancy report to
be generated that is sent to the Customs Compliance Department for research and/or corrective
action. This is the process in place for the vast majority of XYZ Company’s entries. The
remaining entries, which are manually entered by the company’s broker, are not subject to the
automated post-entry valuation.
The fact that a number of XYZ Company’s transactions are not subject to the company’s control
activities (listed above) mean that these transactions should be considered during the risk
assessment. Additionally, XYZ Company should consider whether the values being compared
by the automated system have been verified for accuracy, e.g., are there any additions to the price
paid or payable not being declared,
Example Scenario 2: Company X, which is a long-time CTPAT Trade Compliance program
participant, acquires ACME Corporation, a non-CTPAT Trade Compliance program company.
While ACME Corporation maintained its own CBP compliance manual along with desktop
policies and procedures prior to its acquisition, Company X’s policy is to gradually integrate any
acquired company’s CBP operations into its CBP compliance manual and associated policies and
procedures. Company X should evaluate ACME Corporation’s policies and procedures to
identify risk areas and review a sample of their past import transactions. The review will help
Company X to determine what the risk factors are and where improvements are needed. Until