1. Poor information sharing and exchange between departments
The customs declaration department is actually a “window” through which the company’s information is reported to the government department. The customs declaration department itself does not generate information, but only obtains relevant information from other departments or the company’s internal management system. If the customs declaration department cannot obtain accurate information from other departments in a timely manner, or cannot obtain corresponding authorization to obtain information from the Enterprise Resource Planning (ERP) system, the data it declares will be distorted.
On the other hand, if the purchasing, sales, and logistics departments cannot obtain the declaration requirements of the customs and other government departments from the customs declaration department, it may eventually lead to delayed shipment, receipt or delivery due to insufficient preparation of materials. If other departments are not clear about the customs supervision requirements, the management of customs-supervised goods within the company will not meet the customs supervision requirements, such as unauthorized handling of duty-free equipment and bonded goods.
2. Chaotic internal control of the customs declaration department
The functions of different personnel in the customs declaration department are not separated, and there is a lack of an effective authorization management system. As a result, some customs officials have too much power and are out of control. Of course, from the perspective of customs officers, the chaotic internal control system will make customs officers feel that there is no effective backup support, and their work enthusiasm will naturally be hit.
There is no basis for the evaluation and assessment of customs officers within the customs declaration department, and the management only asks about the “results” and ignores the “process”, and only requires smooth customs declaration and smooth verification to reduce tax costs. Under this assessment model, the duties of customs officers are changed from “truthful declaration” to “tax saving and tax avoidance”, which often evades the important issues, whitewashes risks, and deeply buries “mines”, only considering current interests and ignoring long-term risk control.
3. Imperfect management of documents and reports
The customs declaration documents of the customs declaration department are often important vouchers for other departments. For example, the customs declaration form is the key voucher for handling export tax rebates and foreign exchange verification. Some companies have not established an effective document circulation and handover process, and customs declaration documents are often lost in circulation, or the delayed documents exceed the validity period, resulting in the inability to handle tax and foreign exchange procedures, causing unnecessary losses. For example, after the customs declaration personnel of some enterprises left, the enterprises found that a batch of import declaration forms had “disappeared”, which made it impossible to pay foreign exchange.
Some enterprises’ customs declaration departments did not establish internal operation records and internal management reports, so the management could not timely understand the implementation of customs affairs, nor could they judge the problems and compliance risks in customs affairs.
4. The internal review and internal audit system of customs affairs is not perfect
Some enterprises lack an effective review system for the declaration process. The division of labor among customs personnel of many enterprises is that each person is engaged in customs declaration in different fields, and there is no cross-review between each other. In this way, many errors and omissions cannot be discovered in time, and can only be reviewed and discovered by the customs declaration personnel of the customs declaration company. However, the customs declaration personnel of the customs declaration company have to deal with a lot of documents every day, and they are not as familiar with the company’s commodities and transactions as the staff of the company. Therefore, errors and omissions are often not discovered in time.
Most companies have internal and external audit systems, but most of these audits cover some routine financial, accounting and other businesses. There are two sources for the internal audit system of domestic enterprises: one is the internal audit system of the original state-owned enterprises; the other is the internal audit system of foreign multinational companies. Of these two internal audit systems, the former will ignore the audit of customs affairs, while the latter cannot be applied to the complexity of domestic customs affairs.