Modified: 11-20-2023 Published: 04-01-2022
“Dear Sir or Madam, I am enclosing the order for the customs inspection.”The letter from the main customs office with the inspection order to the authorised recipient in your company – no need to panic. First of all, it is important that you read the inspection order carefully to find out exactly what it is about. We often see companies panicking at first, even though they are actually in a good position. There are also other cases, i.e. you are not at all prepared for an audit and have let your responsibilities slip in recent years (but we won’t assume that now 😉 ).
Basically, every company involved in foreign trade will be confronted with the topic of auditing at some point. Depending on the scope and risk, you will be visited more or less often. Basically, the more responsibility and freedom you have, the more obligations you have.
It is important that you understand what kind of exam it is and how you can prepare for it. Because there is strength in calmness! Regardless of whether you are well prepared or have let everything slide in the last few years, hectic actionism will not help in either case. In our article, we would like to show you the different types of audits, what preparations you can make for them and what is important for you and your company in the end.
You can find your most important information in the examination order. It will tell you what kind of audit it is, the name of the auditor, the time period and what exactly is being audited. The person in charge or the representative of your company will then sit down with the auditor to determine which documents have to be submitted and within what period of time. A small tip: If you need more time for preparation, there are possibilities to postpone the audit period.
We will briefly summarise the three most important types of examination here:
In the classic customs audit, the focus is on the import of a company – has the company paid import duties correctly? Are the goods from third countries correctly classified? Have the import duties been paid in the correct amount? Has the correct customs value been used? Are the specified preferential documents available? Have any additional customs duties been paid?
Foreign trade audits in the area of exports are more concerned with foreign trade aspects, such as simplified customs declarations and compliance with your authorisation requirements, export licence requirements or licence requirements for shipments within the EU, technology transfers or transit trade transactions, but also formal or foreign trade law aspects. In the area of imports, it is checked whether the relevant import licences or surveillance documents are available for relevant processes. Here, only very few products, depending on where they come from, require these licences. The third area of the foreign trade audit is the capital declarations – here it is checked whether the capital declarations to the Bundesbank have been made in the correct form.
Last but not least is the preferential audit. Here the focus is on the legality and validity of the preference document issued. Preference checks are primarily carried out when preference partner countries (countries with which the European Union has concluded a preference agreement) contact the German customs administration with a request to check whether a preference document was issued legally. In these cases, the customs administration carries out a corresponding check at the exporting company.
Internally, you should organise the customs check like a project. This means that there are clear responsibilities. It must be decided in advance who will talk to the customs officer and who will provide what data. The data provided to the officer should also be controlled centrally via the responsible person, for example the customs officer.
There are always findings that you can make a note of during the audit in order to derive measures for improvement, even independently of the final report. The final meeting – your opportunity to check and correct facts.
You have now completed the largest part of your examination. The examiner now writes an exam report based on all the information gathered, completely free of evaluations. Usually, at the end of the audit, there is a discussion involving at least one representative of your company and the auditor. This meeting can take place either as a “final meeting” with an official character (according to § 201 of the Tax Code) or as a “final meeting” with a more unofficial character. At the final meeting, you and your company can discuss facts or circumstances that are not correctly presented and have them corrected if necessary. You also have the opportunity to write a counterstatement or statement on the facts, which will then also become part of the audit report.
After discussing your audit report, it will be forwarded to the relevant department of the main customs office. Here it will be evaluated and finally decided what conclusions will be drawn. If violations are found, a distinction is made between work errors and system errors. A work error exists, for example, if it is an individual case. Here, the auditor assumes that work errors only happen if there is already a structured customs process. Therefore, the relevant customs authorities often offer to comment on the findings. Here you have the opportunity for the person responsible for customs in your company to present in a statement which processes you have already installed and which measures have already been taken in the past to avoid errors in the area of foreign trade law. You can also explain measures that you will take after the audit. However, you should not go too far out on a limb – you don’t want to give the impression that there was chaos beforehand.
The best news is that everyone has it in their own hands to achieve a positive conclusion to the exam and to be able to react more calmly to it. Such an audit always involves a lot of preparation and time. That is why it is important to ensure structured and legally compliant customs processing, including audit trails – and to do so permanently. Our most important tips are:
Good preparation, legally compliant customs processes and trained staff are the basis for successfully passing the customs audit. We would be happy to support you and your company in all technical matters relating to this topic, whether with various training courses or with a personal consultation. We help you to keep a cool head during the audit.
