The Revised Kyoto Convention, which is more popularly known by its acronym, RKC, and is the main trade facilitation customs convention, defines postclearance audits (PCAs), or audit-based controls, as measures that customs authority rely on to satisfies themselves about the accuracy and authenticity of declarations. The measures include the examination of the relevant books, records, business systems and commercial data held by the parties concerned.

According to the United Nations Economic Commission for Europe’ (UNECE’s) Trade Facilitation Implementation Guide, a PCA is a critical control methodology for a customs authority and other border regulatory authorities, as it enables them to apply a multilayered risk-based control approach by moving from a strictly transaction-based control environment to a stronger, audit-based administration. The UNECE reminds that transaction-based controls are those controls applied to each individual shipment at the time of crossing the border, such as physical examination; verification of value, origin and classification of goods; sampling; and verification of certifi- cates, licences and permits, besides others.

The RKC is not a recent invention – it was developed by the World Customs Organisation (WCO) and entered into force on February 3, 2006, updating the original Kyoto Convention, which was adopted in 1973. At the time of its release in 2006, the PCA guidelines were also released, remaining the most recent until the recent update. This followed a comprehensive review necessitated by the need to reflect a new approach to PCAs. The review was a consequence of the growing need by WCO members (countries’ customs admini- strations) to secure revenue, while facilitating legitimate trade. It was also as a result of the increasing migration of customs activities away from traditional border controls to the postclearance environment.

What seems to have gone largely unnoticed, through all this, is the release of the WCO’s Guidelines for Post-Clearance Audit (PCA) Volume 1 and the WCO’s Guidelines for Post-Clearance Audit (PCA) Volume 2 – Restricted for WCO Members’ Use Only. The good news is that the latter is available on the Internet.

According to the WCO, Volume 1 is primarily targeted at those at management level and aims to assist with the development and administration of a PCA programme, while Volume 2 focuses on the operational aspects of PCAs, with practical guidelines and checklists for auditing officials.

The 46-page Volume 2 consists of four chapters: Implementation of PCA; Preparatory Process; Conduct of the Field Audit; and Irregularities, as well as an annex and case studies. Without question, Chapter 3, Conduct of the Field Audit, is the most informative, as it covers the initial audit meeting; audit techniques and tools; checklists on customs value; country of origin; tariff classification; end-use; customs warehousing; inward processing procedure; outward processing procedure; processing under customs control; temporary importation; dual-use goods; and export value-added tax. The chapter also deals with examination, which includes inspection of books and records, veri- fication of the customs value, examination of accounting records, inspection of computer- based accounting systems, physical inspection of goods and premises, expansion of the audit to third parties, and recording, review of findings and conclusions. The chapter concludes with reporting, which includes a section on a suggested checklist for the final report.

Having read through both volumes, I highly recommend that any business that has a customs component, be it directly or indirectly, should make a concerted effort to read these two documents. Do not misunderstand me – I am not recommending that you read these documents when you are subjected to a PCA, but, rather, that you take a more proactive approach. In other words, use these two documents to self-evaluate your current customs processes procedures and practices.

If your customs processes, procedures and practices conform to the requirements, you have, in essence, adopted the customs best practice. If you want to surpass these and go the extra mile, you could also consider the UNECE’s Trade Facilitation Implementation Guide.

Forewarned is forearmed, as my mother always reminds.