Customs Due Diligence

Customs Due Diligence

A thorough review of the target company's customs activities should be an obligatory component of due diligence activities.

We perform full-scope customs due diligence of the Target.

We will provide the following services within the scope of Customs Due Diligence:

Full-fledged (one-time) or periodic (regular) customs due diligence of your company or your agents (the ‘Target’).

We will perform the customs due diligence of the Target for the covered period based on the following:

Customs summary

  • Summary of the key customs risks and general customs compliance, provide recommendations for improvement of customs compliance and mitigation of identified customs risks
  • Summary of other key customs issues that are identified during due diligence and their importance for the transaction log testing

General customs issues

Our analysis will focus on the following general customs aspects, including:

  • Verification of complete set of documents filed with customs authorities
  • Application of the correct Ukrainian Classification code (correct duty rate)
  • Identification of quantity and weight compliance with the customs documentation
  • Compliance with country of origin rules (e.g. EUR 1, restrictions, application of preferential duty rates)
  • Application with INCOTERMS (e.g. influence on customs valuation)
  • Compliance with customs regimes (programs) treatment (correctness of customs documentation in temporary admission, transit, etc.)
  • Verification of calculations of customs valuation and confirmation of selected customs valuation method
  • Non-tariff regulation compliance (depending on the specific goods – technical regulations, licenses, certification, etc.)
  • VAT Compliance
  • Other issues (availability of internal customs procedures, trainings and education of staff, high-level transfer pricing influence on customs valuation, risk management procedures, etc.)

Important notice

  • We will verify and analyse source documents only in respect of selected transactions log (up to two material transactions of each customs regime (program))
  • For the purpose of price and time efficiency, our customs deliverables will primarily include (i) a report of the customs issues (risks), (ii) their quantity and risk level (if possible), (iii) recommendations of eliminating or mitigating identified customs risks (if possible), and (iv) transactional testing log with summary of the due diligence.

Post-customs audit review and support during disputes with the customs authorities

  • We will provide support and represent the Target during disputes with the customs authorities.
  • We will discuss with the management status and analyze the results of recent customs audits and assessments; we will comment on the assessment of additional taxes during the recent customs audits or protocols on customs rules violations issued to the management of Target (if any). 
  • We will discuss with the management the history of court and out-of-court customs disputes; analyze the status of recent and current customs disputes (if any).

Compliance with the parent company internal customs policies

We will perform:

  • Analysis the availability of and compliance with internal customs policies of the parent company with Ukrainian legislation
  • Review of the customs policies (if applicable)
  • Analysis of the Target’s compliance with internal policies
  • In case of absence the internal customs policies, drafting and providing internal customs policies relevant to the Target.

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