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Customs Duty Investigation

Customs Duty Investigation?
It refers to examining whether the importers and exporters made legitimate import/export declaration, as prescribed in the trade related legislations such as Customs Act, the Foreign Trade Act, Foreign Exchange Transaction Act, etc.
Customs duty investigation is generally divided into 'Corporation Audit' and 'Planning Audit'. AEO-authorized companies are subject to 'AEO Authorization Audit' and 'Comprehensive Audit' after the authorization.

Corporation Audit (Customs Act, Article 110-3 ①)

Where a negligent declaration is suspicious as a result of a periodical
analysis of sincerity of their declarations

Where the duty payers have not been subject to customs post audits
for a long period of time (at least for the preceding four years or more)

Where the head of a customs intends to conduct a sample
survey on a random basis

Planning Audit (Customs Act, Article 110-3 ②)

Where duty payers fail to file a declaration accurately or perform any obligation to comply with payment of customs duties

Where there is a specific report on duty evasion
against exporters and importers

Where the details of a declaration contain any data
such as tax evasion or errors

AEO-authorized companies are not subject to Corporation Audit but 'AEO Authorization Audit', and'Comprehensive Audit' after the authorization.

AEO-Authorized Companies

AEO-Authorized Companies info
Authorization/Comprehensive Audit
  • Official AEO authorization after the authorization audit
  • Comprehensive audit, conducted for every 3 to 5 years
    since the AEO authorization
  • Customs-private partnership

Non AEO-Authorized Companies

Non AEO-Authorized Companies info
Corporation Audit Planning Audit
  • Businesses with at least USD 50 million in annual import volume over the past 2 years
  • Periodical audit conducted for every 4 to 5 years
  • Customs duties, foreign exchange and clearance requirements are all subject to investigation
  • High-risk businesses
  • Frequent audit of specific issues
  • Joint audit by investigation divisions

Customs Duty Investigation Process

  1. 1
    Advance
    Notice
    • ‘Corporation Audit’ notice will be sent at least 15 days before the audit started.
    • Companies may apply for postponement of the audit or alteration of audit venue.
  2. 2
    Start of Audit
    • The identity of the customs officers in charge of investigation is checked.
    • Companies will be informed of 「Charter of the Taxpayer’s Right」.
    • Companies will complete 「Integrity Pledge」 with the officers.
  3. 3
    Audit
    Performance
    • Companies may get helped from customs brokers and other customs experts.
    • 「Customs Integrated Civil Service Center」 will help protect tax payers’ rights
  4. 4
    End of Audit
    • The audit should be closed within the scheduled period. (However, may be extended if necessary)
    • Companies will be informed via the consultation of the results of Corporate Audit, customs administrative systems for business convenience, and tips for a faithful customs report.
  5. 5
    Notification
    of Results
    • 「Corporation Audit Results」 will be sent.
    • Companies may request 「pre-taxation deliberation」 when they have something to appeal in the results.
  6. 6
    ssuance
    of Notice Bill
    • 「Notice Bill of Tax Payment」 will be sent.
    • If companies disagree with the notice, they can file an objection such as administrative protest, examination requests, appeal for the judgement etc. within 90 days.

Service Scope

Service Scope list
Representation of Pre-taxation Deliberation Representation of Corporate Audit
Representation of Administrative Protests  Representation of Examination Requests
Representation of Appeal for Judgement Advisory for Administrative Litigation 
Organizing TFT for Customs Investigation Collaboration with Specialized Lawyers
Representation of Corporate Audit for Clients Representation of Verifying FTA Country of Origin