Customs Corruption Risks: Identifying the Problem Areas (Part One of Three)

Moving goods from one country to another – a staple of many businesses – exposes companies to various points of bribery risk as employees try to navigate different customs regimes and expedite shipments.  In this three-article series, we explore customs-related hurdles and FCPA risks.  This, the first article in the series, examines how the customs system works and the risks associated with that system, including books and records violations for inaccurate customs forms and the temptation for employees to make illegal payments to customs officials to ensure that their paperwork is approved as quickly as possible.  The article also outlines four ways to mitigate customs risks.  The second article in the series will take a closer look at how to address the risks arising from working with customs brokers, freight forwarders and other third-party vendors.  The third article will discuss facilitation payments in the customs context, including whether companies should allow such payments and, if so, how they can structure their compliance policies to minimize risks.  See also “Training, Certification, Due Diligence, Customs Clearance and Facilitation Payments: An Interview with Leaders of Ernst & Young’s Fraud Investigation & Dispute Services Practice” (Jun. 6, 2012).

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