Multinationals Should Audit Import Operations for Tariff Compliance and Hidden Risk

This article provides a self-assessment checklist for multinational companies to evaluate their customs compliance and tariff risk in the current environment of high enforcement and rapidly changing tariff rules. Import compliance failures typically result from accumulated small errors—such as outdated country-of-origin determinations, stale tariff classifications, or failure to track manufacturing location changes—rather than single dramatic mistakes. The guide helps importers identify procedures that U.S. Customs and Border Protection expects, with particular focus on country-of-origin determination, which forms the foundation for proper tariff classification and duty calculation.

Import compliance problems typically accumulate gradually through procedural lapses rather than occurring as single violations. Common issues include relying on outdated assumptions about where products originate, using obsolete tariff classifications, neglecting to document component sourcing changes, and failing to monitor when manufacturers relocate operations. These incremental mistakes become particularly costly in today's environment, where enforcement intensity is elevated and tariff policies shift frequently, potentially resulting in substantial duty underpayments and associated penalties.

The self-assessment framework addresses three primary compliance areas: country-of-origin determination, tariff classification under the Harmonized Tariff Schedule, and customs valuation. Country-of-origin analysis requires companies to apply appropriate legal standards—such as substantial transformation tests or tariff-shift rules under trade agreements—rather than passively accepting supplier declarations. Similar rigor applies to maintaining current tariff classifications and ensuring declared values reflect proper commercial pricing with all required adjustments.