Primarily in response to an independent auditor’s review of the internal controls over financial reporting done in fiscal year 2002, Revenue became a PTI. The auditor’s report cited that Customs did not adequately monitor the effectiveness of its internal controls over the entry duties and taxes. In today’s environment of management accountability and reliance upon internal controls, CBP must take a proactive approach in determining areas that pose a material risk in our revenue process and ensuring that our internal operations and controls are designed to mitigate the risks at the point in the entry process where the risk occurs.

The international trade environment is complex and dynamic and the laws governing Revenue are diverse. U.S. Treasury delegates its authority to the Department of Homeland Security (DHS) to collect revenue under Section 412 of the Homeland Security Act. 19 USC 1484 requires each importer provide information to CBP for proper appraisement and classification of the merchandise. The authority to determine whether imported merchandise is correctly appraised and classified to set the amount of duty due is provided by 19 USC 1500. Tariff classification rules are set by the Harmonized Tariff Schedule of the U.S, which is codified as 19 USC 1202. The rules governing the appraisement of imported merchandise are 19 USC 1401a and 1502. The regulations that govern the classification of imported merchandise are in Parts 151 and 152. Subpart E of Part 152 contains the regulations that implement the valuation statutes. The authority to require bonds from an importer to secure the performance of the importer to comply with the applicable statutes and regulations on importation and to pay all applicable duty due is provided by 19 USC 1623 and is implemented by Part 113 of the CBP regulations.

The key internal stakeholders impacted by the Revenue PTI are the CBP field offices, whose job it is to ensure diligence in fulfilling the agency’s trade mission. The external stakeholders to the Revenue PTI include the trade community, U.S. citizens, Congress, US Treasury, and independent financial auditors. All of these external stakeholders apply a significant amount of pressure upon CBP to maintain high levels of performance for its trade-related mission.