POST CLEARANCE AUDIT (CAO-1-2019)

Question 1

Shall refer to persons authorized to bring imported goods into Free Zones, such as the sez and free ports.

Answer 1

Locators

Question 2

Shall refer to the use of insufficient or wrong desrciption of goods or the use of erroneous tariff heading.

Answer 2

Misclassification

Question 3

Shall refer to false, untruthful, erroneous or inaccurate declaration as to quantity, quality, description, weight, or measurement of goods.

Answer 3

Misdeclaration

Question 4

Shall refer to failure to exercise reasonable care and competence, through act or acts of ommission or commission, in ensuring tha a statement made is correct resulting in a deficiency in taxes and duties paid.

Answer 4

Negligence

Question 5

Shall refer to an office created under Executive Order No. 160 s. 2003, as amended by EO No. 46 s. 2017, mandated to conduct audit of importers, locators, and all parties engaged in customes clearance and processing.

Answer 5

Post Clearance Audit Group

Question 6

When the Bureau may conduct audit examination, inspection, verification, and investigation or records pertaining to goods declaration.

Answer 6

Within 3 years from the date of FINAL payment of duties and taxes or Customs Clearance.

Question 7

Period of limitation of assessment.

Answer 7

In the absence of fraud, it shall be conclusive upon all parties 3 years from the date of final payment of duties and taxes or upon completion of post clearance audit.

Question 8

Who are the entities required to keep records.

Answer 8

Importer, Broker, and Locators

Question 9

Composition of PCAG.

Answer 9

PCAG is headed by Assistant Commissioner
Units:
PCAG Trade and Information Risk Analysis Office(TIRAO)
PCAG Compliance Assessment Office (CAO)
-Each shall be headed by Director

Question 10

Entity authorized to determine the number of personnel requirements of PCAG and issue necessary order to reassign the required organic personnel of BOC to the group.

Answer 10

The Commissioner with the approval of the Secretary of Finance

Question 11

Shall refer to a program based on international best customs practice, authorizing the Commissioner of Customs to accept, as a potential mitigating factor, prior disclosure by Importer of errors and ommissions in goods declaration resulting in deficiency in duties and taxes on past importations.

Answer 11

Prior Disclosure Program

Question 12

Shall refer to a plea for the re-evaluation of the audit findings on the basis of existing records without need of additional evidence.

Answer 12

Reconsideration of Audit Findings

Question 13

Shall refer to a plea for the re-evaluation of the audit findings on the basis of newly discovered or additional evidence intended to be presented in the reinvestigation.

Answer 13

Reinvestigation of Audit Findings

Question 14

PCAG-TIRAO stands for?

Answer 14

Trade Information and Risk Analysis Office

Question 15

PCAG-CAO stands for?

Answer 15

Compliance Assessment Office

Question 16

One of the functions of PCAG-TIRAO is to review available trade data to determine compliance marker of industry and set benchmark for the purpose of developing an audit program.

Of whose approval they will need?

Answer 16

Commissioner’s approval

Question 17

PCAG-TIRAO in coordination with Management Information System and Technology Group shall develop a computer-aided risk based management system, the parameters of which are to be based on objective and quantifiable data for use in the profiling and identification of potential priority audit candidate based on the approved audit program.

Of whose approval they will need?

Answer 17

Subject to the approval of the SOF upon recommendation of Commissioner

Question 18

Preparation of audit work plan, scope and approach for the audit candidates is one of the functions of which entity?

Answer 18

PCAG-CAO

Question 19

PCAG-CAO shall prepare and submit the required reports on audit findings and recommendations to whom?

Answer 19

Commissioner of Customs for approval

Question 20

Whose approval that PCAG needs for the prepared set of post clearance audit procedures?

Answer 20

Commissioner’s

Question 21

Who shall issue an Audit Notification Letter?

Answer 21

Commissioner

Question 22

What is the timeframe for validity of ANL.

Answer 22

It shall be valid for 30 CALENDAR DAYS from the date of issuance, subject to revalidation by the Assistant Commissioner for another 30 DAYS prior to its expiry

Question 23

ANL and Demand Letter must be sent through these following means.

Answer 23

1. Personal service at principal place of business
2. Registered mail
3. Through e-mail

Question 24

When the audit team shall commence the audit proper?

Answer 24

Not later than 60 calendar days from the service of the ANL

Question 25

The audit shall be completed within what period?

Answer 25

120 calendar days per year of audit period from the date the Importer receives the ANL

Question 26

When the audit is considered completed?

Answer 26

When the audit team has been submitted the FAR with Demand Letter or PCAG-CRF, endorsed by the Assistant Commisioner and subsequently approved by the Commissioner

Question 27

What shall the audit team do when unable to submit FAR within the required period?

Answer 27

A status report must be submitted to the Commissioner through the Assistant Commisisoner not later than 5 CALENDAR days prior to expiration of the said period giving the reasons for the non-completion of the audit and the proposed period to complete the audit not exceeding 30 CALENDAR days

Question 28

Within what period shall the PCAG send the Demand Letter to the Importer?

Answer 28

Within 5 CALENDAR days from the receipt of the Demand Letter signed by the Commissioner with a demand to pay not later than 15 CALENDAR days from receipt

Question 29

If the Importer adversely affected by the deficiency assessment issued by the PCAG and approved by the Commissioner may file a request for reconsideration or reinvestigation to whom and what period?

Answer 29

The Importer may file a request for reconsideration or reinvestigation to the Commissioner within 15 DAYS from the receipt of the Demand Letter For request for reinvestigation, the supporting documents must be submitted within 30 DAYS from the date of filing, otherwise, the request shall be denied. The Bureau through the PCAG shall have 60 CALENDAR days from submission of complete documents to resolve the request

Question 30

Within what period should the Bureau furnish the DOF and BIR a copy of Final Audit Results?

Answer 30

Within 30 calendar days from the issuance thereof including the amount paid by the Importer. In addition the Bureau shall provide quarterly status report to the DOF of all ANL's issued and audits conducted

Question 31

Who may avail PDP?

Answer 31

Any Importer without waiting for the issuance of an ANL and Importer who has received an ANL

Question 32

May the Importer who has received an ANL still avail of the PDP?

Answer 32

Yes, within a period of 90 CALENDAR days from the receipt of ANL The Importer may amend the PDP application and pay additional deficiency duties, taxes and penalties within an additonal non-extendible period of 30 CALENDAR days from the filing of the PDP application form

Question 33

What is the effect of PDP to applicant who has not yet received an ANL?

Answer 33

Payment of deficiency in duties and taxes due plus legal interest

Question 34

What is the effect of PDP to applicant who has received an ANL?

Answer 34

Payment of deficiency in duties and taxes due plus penalty of 10% of the basic deficiency and legal interest

Question 35

What is the consequence of failure to comply with the necessary documentation in PDP application?

Answer 35

Non-acceptance or disapproval of the application

Question 36

What is the timeframe for completion of verification and approval or denial of the PDP application?

Answer 36

90 CALENDAR days from the submission if complete PDP documents

Question 37

Any request for a waiver of penalties, interest, fine, or surcharge made by the importer shall be subject to the final approval of whom?

Answer 37

Secretary of Finance

Question 38

What is the remedy of the Importer when his request for reconsideration or reinvestigation is denied by Commissioner?

Answer 38

Importer may appeal such denial to the CTA within 30 days from the receipt of adverse ruling or decision of the Commissioner

Question 39

What are the penalties for failure to keep and maintain records?

Answer 39

SSHCW

Question 40

What are the penalties for those who deny the authorized customs officer full and free access to the records?

Answer 40

SPRSHC

Question 41

What are the 2 degrees of culpabilities as penalty for Importer found to have deficiencies in duties and taxes paid for imported goods?

Answer 41

Negligence and Fraud

Question 42

What is the penalty for Negligence?

Answer 42

Fine equivalent to 125% of the revenue loss, provided, under Section 108, chapter 2, title 1 of the CMTA, Penalty of 25% of the revenue loss shall be imposed on an inadvertent error amounting to SIMPLE NEGLIGENCE

Question 43

What is the penalty for FRAUD?

Answer 43

Penalty of 6 times of the revenue loss and/or imprisonment of not less than 2 years but not more than 8 years

Question 44

What are the records to be kept by Bureu?

Answer 44

1. Articles of incorporation 2. Company structure 3. Key importation 4. Importation privileges enjoyed 5. Records of violations and penalties 6. Risk categories 7. Audit results 8. Other information and documents from various offices of the Bureau (ACKIRRAO)

Question 45

What are the records that Importer must give the auditors access to?

Answer 45

a. Document flow b. Financial flow c. Goods inventory d. Other business processes that is necessary and relevant for audit