Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



NAFTA Audits – Differences

In a recent posting my colleague, Cyndee Cherniak spoke about NAFTA audits and things prudent Canadian companies will do to prepare for them. It is worth noting that such audits are done quite differently in the U.S. Oh, the basic rules are the same, it’s just that American Customs has a very different attitude about audits and how they are conducted.

For example, whether dealing with Mexican or Canadian Customs, it is common for the audit team to provide details to the exporter ahead of time so that the necessary documents can be gathered and made available promptly after the audit team arrives. American auditors will not tell you in advance much about what they will audit and will generally tell you even less about the documents they want to review. Any prudent exporter should be able to figure out what documents are likely to be under the microscope, but still, it helps to know with certainty.

Another major difference is one of timing. With the Canadian and Mexican auditors, the audit is likely to be completed within a matter of days. Of course, it will take much longer if irregularities are confirmed or discovered. However, the routine American audit takes weeks and often longer.

So, if you have the misfortune to be selected for a NAFTA audit, make sure you consult your trade advisor so you know ahead of time the framework in which you will be operating.

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