Preparing for a CBP Focused Assessment: Records, Documentation, and Common Findings

What Is a CBP Focused Assessment?

A focused assessment (FA) is CBP's most in-depth audit program for evaluating an importer's compliance with US customs laws. Conducted by CBP's Regulatory Audit division, a focused assessment examines your internal controls, import procedures, and entry accuracy across all major compliance areas: classification, valuation, country of origin, trade program eligibility, and record-keeping. Unlike a quick review or a CF-28 information request, a focused assessment is a multi-week process that involves on-site visits, extensive document review, transaction testing, and detailed findings reports.

CBP selects importers for focused assessments based on risk factors including: import volume, product complexity, prior compliance issues, industry risk profiles, and tips or referrals. Being selected does not necessarily mean CBP suspects wrongdoing — the program is designed to evaluate and improve compliance across the trade community. However, the findings of a focused assessment can lead to penalties, rate increases, increased examinations, or even loss of trade privileges if significant compliance gaps are found.

The Focused Assessment Process

1. Phase 1 — Pre-Assessment Survey (PAS): CBP sends a questionnaire asking about your compliance program, organizational structure, import procedures, and internal controls. This is your first opportunity to demonstrate reasonable care. CBP uses your responses to plan the on-site audit.
2. Phase 2 — Planning: CBP auditors review your questionnaire responses, analyze your import data from ACE, and identify risk areas for detailed testing. They select the time period, product lines, and compliance areas to focus on.
3. Phase 3 — On-Site Audit: CBP auditors visit your facility (usually headquarters or the location where import decisions are made). They interview key personnel, review documents, test transactions, and evaluate your internal controls in person. This phase typically lasts 1-3 weeks.
4. Phase 4 — Transaction Testing: CBP pulls a sample of your entries (typically 50-200 entries) and verifies that the classification, valuation, country of origin, and other declarations are accurate. Discrepancies are documented as findings.
5. Phase 5 — Draft Report: CBP issues a draft audit report with findings, recommendations, and potential violations. You have an opportunity to respond to the draft before the final report is issued.
6. Phase 6 — Final Report: CBP issues the final focused assessment report. If violations are found, the report may recommend penalties, rate changes, or require corrective action plans. If your compliance program is strong, the report may result in a clean finding with no further action.

What CBP Auditors Look For

CBP auditors evaluate both your compliance systems (policies, procedures, controls) and your compliance results (whether entries are actually accurate). A company with excellent written procedures but poor entry accuracy will not pass, and neither will a company with accurate entries but no documented procedures. CBP wants to see that your compliance is systematic, not accidental.

• Classification system: How do you determine HTS codes? Who is responsible? What sources do you use (ruling letters, professional advice, tools)? How do you handle new products? How often do you review existing classifications?
• Valuation procedures: How do you determine transaction value? Do you report assists, royalties, and other additions? How do you handle related-party transactions? Do you have transfer pricing documentation?
• Country of origin determinations: How do you determine country of origin? Do you have processes for verifying origin claims, especially for goods from countries subject to trade remedies?
• Broker management: How do you instruct and oversee your customs broker? Do you provide written classification and valuation instructions? Do you review broker-filed entries?
• Record-keeping: Can you produce all required records for the audit period? Are records organized and accessible? Do you have a formal record retention policy?
• Internal audit and testing: Do you conduct internal audits? What is your error rate? What corrective actions have you taken based on audit findings?
• Training: Who in your organization receives customs compliance training? How often? What topics are covered?

Most Common Focused Assessment Findings

• Undeclared assists: The single most common finding. Importers fail to report tooling, molds, engineering, design work, or raw materials provided to foreign manufacturers. CBP auditors specifically look for payments to foreign parties that are not reflected in the declared value.
• Classification errors: Misclassified products resulting in underpaid duties. CBP tests a sample of entries and reclassifies the goods independently — if their classification differs from yours, it becomes a finding.
• Missing or inadequate records: Inability to produce invoices, packing lists, purchase orders, or correspondence for audited entries. The 5-year record retention requirement under 19 USC 1508 is strictly enforced.
• No formal compliance program: The absence of written procedures, documented classification decisions, and internal audit results is itself a finding — it demonstrates insufficient reasonable care.
• Royalty and license fee omissions: Payments to foreign licensors that should have been added to transaction value but were not declared to CBP.
• Country of origin errors: Incorrect origin declarations, especially for goods assembled in multiple countries where substantial transformation analysis is required.
• Trade program non-compliance: Claiming preferential tariff treatment (USMCA, GSP) without valid certificates of origin or without meeting rules of origin requirements.
• Broker oversight failures: No evidence that the importer reviewed or verified entries filed by the customs broker.

How to Prepare Before the Audit

1. Conduct a mock audit. Before CBP arrives, run your own focused assessment. Pull a sample of entries, verify classifications, check valuations, and test your record-keeping. Fix what you find.
2. Organize your records. Ensure you can produce all required documents — invoices, packing lists, purchase orders, entry summaries, broker instructions, correspondence, and payment records — for the audit period.
3. Review and update your compliance manual. If you do not have one, create one before the audit. If you have one, make sure it reflects your current procedures and is not outdated.
4. Validate your classifications. Pull your top 50 products by import volume and independently verify the HTS classifications. Use ruling letters, the HTS text, and classification tools to confirm accuracy.
5. Identify and disclose known issues. If your mock audit reveals errors, consider filing prior disclosures before the focused assessment begins. Errors disclosed voluntarily receive significantly lower penalties.
6. Brief your team. Everyone who may interact with CBP auditors — compliance staff, purchasing, logistics, finance, executive management — should understand the audit process and their role.
7. Engage trade counsel. A customs attorney or experienced trade consultant can help you prepare for the audit, review your compliance program, and guide you through the process.

After the Audit: Responding to Findings

When CBP issues a draft report with findings, you have the right to respond. This response is critical — it is your opportunity to correct factual errors, provide additional documentation, explain mitigating circumstances, and propose corrective action. Work with trade counsel to prepare a thorough, professional response. If CBP's findings lead to penalties, you can negotiate through the penalty process, request mitigation, or protest the penalty. If the findings are valid, implement corrective actions immediately and document them — CBP may conduct a follow-up audit to verify that you addressed the issues.

“The goal of a focused assessment is not to punish importers — it is to evaluate and improve compliance. Importers who prepare thoroughly, cooperate fully, and demonstrate a genuine commitment to accuracy typically come through the process with minimal disruption.”

— CBP Regulatory Audit Division