Learn more
DUTY DRAWBACK
RESTRICTED PARTIES
U.S. businesses for working with restricted parties:
Total penalty fees issued in 2022 by the U.S. government to
DEPARTMENTS
OFFICIALS OR
GOVERNMENT
AUDITS
REGULATORY
INCREASED
DAMAGE
REPUTATIONAL
CHARGES
AND/OR CRIMINAL
LEGAL LIABILITIES
LICENSES
LOSS OF EXPORT
BUSINESSES
INDIVIDUALS
million
An 80% uptick from 2020
Double the amount from 2021
include:
only risks, others
Fines aren’t the
and take the anxiety out of doing international business.
Automated processes can relieve administrative burdens
associated with your business’ supply chain is integral.
Establishing an ongoing screening process for all partners
Restricted Party Screening (RPS):
up from 630 in 2021.
West (U.S. and allies) between February and December 2022,
Approximately 1,658 Russian entities were sanctioned by the
There's been an increase in restricted parties
find themselves in breach of customs requirements.
– even if it’s unbeknownst to the original business – might
nefarious activities or that buy from/sell to restricted parties
Businesses that buy or sell from partners engaged in
there’s no global repository.
Every country has a different list that changes daily and
national security or in breach of international law include:
Restricted parties that have been deemed a threat to
restricted-party list is next to impossible
Keeping track of those on the
Restricted Parties
These risks are disruptive, but they don’t have to be.
that most businesses don’t plan for.
cost-containment efforts. There are costs lurking in every supply chain
processes and limited resources have the potential to derail
Risky supply chain partnerships, inadequate trade management
Supply Chain
Hidden Risks In Your
CUSTOMS AUDITS
Customs Audits
The process of preparing for an audit
requires an all-hands-on-deck approach,
even when no penalties are issued.
Trade compliance is grueling work. The wrong classification
codes can lead to major headaches and profit loss if customs
officials choose to conduct an audit.
And it’s not just classification codes, non-compliance
can also be caused by:
These issues leave the person in charge of compliance vulnerable
to errors and omissions that diligent customs officials will catch.
Importance of classification codes
IMPROPER
VALUATION
INCORRECT
ORIGIN
DECLARATIONS
MISUSE OF
FREE TRADE
AGREEMENTS
The percentage increase in trade penalties issued from
2018 to 2022, compared to the relatively unchanged
number of audits being issued in the same timeframe.
Customs audit vigilance is on the rise in the U.S.
53%
The total cost of fines issued in association with those audits:
AN INCREASE
OF 86%
UP FROM
$42 MILLION IN
2018
in 2022
$78 million
That’s significant money out of the pockets of businesses.
Completed Audits
(Quantity)
Total Collected as a
Result of Importer Audits
(Million)
Total Trade
Penalties Issued
(Quantity)
2018
0
500
1000
1500
2000
2500
$30
$54
$78
$102
$126
$150
2019
2020
2021
2022
Year
Millions
Quantity
Quantity
Preparing for an audit can:
In many cases, customs
non-compliance is the
result of:
Limited resources
Take away from
day-to-day work
Leave compliance
officers and their teams
scrambling
Poor trade data
management
Incorrect record keeping
(which is a fineable offence
in the event of an audit)
Going it alone
Most compliance managers, or individuals whose responsibility it is to
manage trade data, often work alone or have 1 to 2 team members.
They don’t have the resources to manage the volume of incoming data,
while keeping track of ever-changing customs requirements.
The result: importing businesses have turned
to compliance experts for support.
The pandemic
New tariffs
Especially since
supply chain
complexities have
increased in recent
years due to:
Stricter laws around
products made with
forced labor
Learn more
The CBSA currently has 20 verification priorities:
19 for tariff classification
1 for customs valuation
This reflects the agency’s assessment of non-compliance risk with
customs rules for categories of imported goods.
The CBSA also conducts:
North of the border
The number of appeals received by the Canadian International Trade
Tribunal to contest CBSA rulings related to classifications grew by
10.71%
in 2021-22
Up from 56 in 2020-21
QUICK RESPONSE
AUDITS
AUDIT
SURVEYS
FOCUSED
ASSESSMENT
AUDITS
The Good News
So, why do so many businesses leave
money on the table?
Time – or lack thereof.
Compiling a tremendous
volume of documentation
Gathering specific information
many business and trade
managers don’t have the time
to complete
Money Left on the Table
Every year, businesses walk away from the opportunity to
recover thousands, potentially millions, of dollars in paid duties
either knowingly or unknowingly.
Importers have the
potential to get back
the money they paid
the government in
customs duties if
they meet one of
three criteria:
There are other instances where duty drawback can be claimed, such as
duties paid in Section 301 tariffs for goods entering the U.S. from China,
and misclassified goods at the time of entry.
113%
The percentage increase in
duty drawback filings
between 2021 and 2022, given
rising supply chain costs.
45%
The percentage of U.S.
imports that are
intermediate goods, which
means significant potential
for duty drawback eligibility.
Duty drawback can be
achieved up to 4 years after
the importation of goods.
How to utilize duty
drawback to recover costs:
Maintain accurate records
Work with a
trade-consulting partner to
file for duty drawback
Learn more
The imported goods are
re-exported as is
They are goods incorporated
into the manufacturing
process of a more refined
product that is later exported
They are goods that were not
requested by the importer or
arrived damaged and unusable
at the time of entry into the U.S.
Duty drawback applications are complex, they require:
Replay animation
$0
$6
$12
$18
$24
$30
$36
$42
Learn more
Learn more
Replay animation
0%
6%
14%
22%
30%
38%
46%
50%
53%
