CBP Focused Assessment: How the Audit Works and How to Prepare

A CBP Focused Assessment (FA) is a structured compliance audit conducted by U.S. Customs and Border Protection to evaluate whether an importer's internal controls produce accurate entry data. The audit runs in two sequential phases: a Pre-Assessment Survey (PAS) that tests your control environment, and, if those controls are found inadequate, Assessment Compliance Testing (ACT) that examines actual transaction data for errors and unpaid duties. CBP's authority to examine records and demand production of documents flows from 19 U.S.C. 1509.

Why CBP Selects Companies for a Focused Assessment

CBP's Office of Trade uses risk-based targeting to select FA candidates. Common triggers include high import volume, activity in sensitive tariff categories, prior compliance issues, or anomalies surfaced through trade data analysis. Being selected does not automatically mean CBP suspects fraud, but it does mean the agency believes a closer look is warranted.

Key risk factors that draw scrutiny include:

• Significant exposure to Section 301 or Section 232 additional duties
• Imports subject to antidumping or countervailing duty (AD/CVD) orders
• Complex or high-value transactions where customs valuation is difficult to verify
• Frequent HTS classification changes or mismatches across entry types
• Related-party transactions that affect dutiable value

Phase One: The Pre-Assessment Survey (PAS)

The PAS is an internal-controls review. CBP auditors are not yet tallying dollars owed. They are asking: does this company have reliable systems that would catch and correct its own errors?

What auditors examine

• Organizational structure and responsibilities: Who owns the import function? Are duties segregated appropriately?
• Written policies and procedures: Does the company have documented processes for classification, valuation, and duty payment?
• Information systems: How does purchase-order data flow to the customs broker, and how are entry summaries reviewed after liquidation?
• Corrective-action history: Has the company identified and self-corrected past errors through prior disclosures or internal audits?
• Training: Are employees responsible for trade compliance trained and current?

PAS outcomes

At the conclusion of the PAS, CBP issues a report. If controls are rated adequate, the FA typically closes without an ACT. If controls are rated inadequate, CBP proceeds to the second phase. A mixed result, adequate in some areas and inadequate in others, can mean a targeted ACT limited to the weak control areas.

Phase Two: Assessment Compliance Testing (ACT)

The ACT is the transaction-level audit. CBP auditors pull a statistically valid sample of entry summaries from a defined look-back period, typically several years, and test each one against source documents: commercial invoices, purchase orders, contracts, bills of lading, and payment records.

Core scope areas

• Customs valuation: Is the transaction value correct? Are assists, royalties, and related-party adjustments included where required?
• Tariff classification: Do the HTS numbers on entry summaries match the actual merchandise? Classification errors in high-duty chapters can quickly produce large exposure figures.
• Section 301 and Section 232 duties: Are the correct additional duties being paid? Are any claimed exclusions properly documented and still valid? For importers active in these categories, the dollar stakes in an ACT can be substantial. See our guide on Section 301 tariff exposure for background on how these duties are structured.
• AD/CVD: Are the correct case numbers, rates, and special program indicators declared? AD/CVD errors often result in large retroactive liability because rates can be changed during administrative reviews.
• Country of origin: Is the declared origin accurate? Origin affects both duty rates and admissibility under trade agreements.

How CBP calculates potential loss of revenue

If auditors find errors in the sample, they project that error rate across all entries in the universe from which the sample was drawn. The result is a Potential Loss of Revenue (PLOR) figure. A small percentage error rate applied to a large entry universe can produce a surprisingly large number, which is why companies with high-volume, high-duty imports face the greatest financial exposure in an ACT.

Your Rights and Obligations During a Focused Assessment

Under 19 U.S.C. 1509, CBP may require production of records related to any entry within a defined retention period. Importers are required to maintain entry records for five years from the date of entry. Failure to produce records on request can itself give rise to penalties separate from any duty underpayment.

Importers have the right to have counsel present during interviews and document reviews. You may also respond to preliminary findings before a final report is issued. Using these opportunities to correct factual misunderstandings is important because the final FA report can serve as the basis for penalty referrals if CBP concludes errors were not inadvertent.

Common Mistakes That Amplify Audit Exposure

• No written procedures: Auditors treat the absence of documented controls as a strong indicator of systemic risk.
• Relying entirely on the broker: The importer of record is legally responsible for entry accuracy, even when a licensed broker prepares the documents.
• Unresolved classification questions: Using an HTS number that was "close enough" without a binding ruling or documented analysis is a liability.
• Inconsistent treatment of assists and royalties: If your vendor invoices do not include tooling, molds, or design costs that you supply, those values likely need to be added to dutiable value.
• Expired or unapplied exclusions: Claiming a Section 301 or Section 232 exclusion that has lapsed, or failing to claim one that applies, both create errors in opposite directions.

What Importers Should Do

1. Conduct a self-assessment now, before CBP contacts you. Map your control environment against the PAS criteria: written procedures, system controls, post-entry review, and training. Gaps you find and fix before an audit typically do not become FA findings.
2. Run a sample entry audit. Pull 20 to 30 recent entries and verify that the HTS numbers, declared values, origin, and any additional duty flags match your source documents. If the error rate in your own sample is meaningful, consider a prior disclosure.
3. Document everything. Classification rationale, valuation build-ups, origin determinations, and exclusion eligibility should all be in writing and retrievable. Auditors give credit for documented reasoning even when they disagree with the conclusion.
4. Engage trade counsel before you respond to a PAS questionnaire. The answers you give during the PAS frame the entire audit. Counsel can help you present accurate information in the most defensible way and can represent you if the audit escalates to a penalty proceeding.

This article is general information, not legal advice.