HTSUS 9802.00.80 -- U.S. Articles Assembled Abroad

**Pre-Assessment Survey**

**Internal Control Technical Guide**

**Objective**

Provide guidance in performing a Pre-Assessment Survey (PAS) of the
company's internal controls for merchandise entered under HTSUS
9802.00.80 and evaluating the results.

**Background**

Generally Accepted Government Auditing Standards require the PAS team to
obtain a sufficient understanding of internal controls to plan the audit
and determine the nature, timing, and extent of tests to be performed.

The guidelines and terms in this technical guide are based on *Assessing
Internal Controls in Performance Audits,* GAO/OP-4.1.4, published by the
United States General Accounting Office, Office of Policy, September
1990, and the American Institute of Certified Public Accountants
*Statement on Auditing Standards No. 78*.

Subheading 9802.00.80 provides a duty allowance for assembly abroad in
whole or in part of fabricated components that are the product of the
United States and that (a) were exported in condition ready for assembly
without further fabrication; (b) have not lost their physical identity
in such articles by change in form, shape, or otherwise; and (c) have
not been advanced in value or improved in condition abroad except by
being assembled and except by operations incidental to the assembly
process, such as cleaning, lubricating and painting. The returned
articles are dutiable on the full value of the imported article less the
cost or, if no charge is made, the value of such products of the United
States, provided the documentary requirements of 19 CFR 10.24 are met.

19 CFR 10.24 states, "The following documents shall be filed in
connection with the entry of assembled articles claimed to be subject to
the exemption under subheading 9802.00.80, Harmonized Tariff Schedule of
the United States (HTSUS).... (1) A declaration by the person who
performed the assembly operations abroad ...; and (2) an endorsement by
the importer...."

The fabricated components must be in condition ready for assembly
without further fabrication at the time of their exportation from the
United States to qualify for the exemption. Components will not lose
their entitlement to the exemption by being subjected to operations
incidental to the assembly (e.g., cleaning, trimming, or filing, but not
chemical treatment of components or polishing) either before, during, or
after their assembly with other components. Materials undefined in final
dimensions and shapes, which are cut into specific shapes or patterns
abroad, are not considered fabricated components.

Some assembly operations (e.g., mixing or combining of liquids or
chemicals) are not significant enough to qualify.

**Examples of Red Flags**

The following examples are conditions that may indicate a potential
problem in 9802.00.80 are broken down into four categories: (1) General,
(2) Origin, (3) Usage, and (4) Value.

**1. General Red Flags**

-   The company has insufficiently documented, poorly defined, or no
    internal controls for accurately declaring 9802.00.80 for Customs
    purposes.

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-   The company does not monitor or interact with the broker on
    9802.00.80 issues.

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-   The company relies on one employee to handle 9802.00.80 issues, and
    there are poor or no management checks or balances over this
    employee.

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-   Company Customs staff lack knowledge of 9802.00.80 eligibility
    requirements.

-   The company offers unreasonable explanations to Customs inquiries.

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-   The company fails to cooperate with or respond to Customs.

-   The company has a high turnover of people in key Customs positions.

-   Significant variance exists between the importer's data and Customs
    data.

-   Customs (e.g., import specialist, account manager, compliance
    measurement, prior audit, other profile information) shows a history
    of problems with 9802.00.80.

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-   U.S. and foreign components are commingled.

-   The description of the assembly process for the imported article
    includes descriptions involving fabrication, completion, or
    improvement.

-   The company has no export documents to show components were shipped
    to the manufacturer.

-   The company has many drawback claims.

**2. Red Flags for Origin**

-   The company has no manufacturers' affidavits, or certificates or
    affidavits on file are incomplete.

-   Certificates of Origin are from a known distributor/wholesaler.

-   There is dual sourcing of fungible or commercially interchangeable
    components.

**3. Red Flags for Usage**

-   The importer cannot provide records to prove the U.S. components
    were used in production.

-   Inventory and accounting records indicate that the quantities of
    components purchased and shipped are less than the quantities
    claimed as 9802.00.80.

-   The components are not shown on the bill of materials for the
    imported article.

**4. Red Flags for Value**

-   The import specialist/account manager has had previous experience
    with the company failing to file cost submissions or preparing
    inaccurate cost submissions.

-   Costs of components deducted from the foreign invoice value were not
    included in the foreign invoice value.

-   Foreign transportation, freight, and insurance costs are
    inappropriately omitted from the dutiable value.

**Examples of Best Practices**

-   Internal controls over 9802.00.80:

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-   Are in writing;

-   Include procedures for monitoring and feedback; and

-   Are approved by management.

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-   One manager is ultimately responsible for control of the Import
    Department, including ensuring eligibility of merchandise entered
    under 9802.00.80. That manager has knowledge of Customs matters and
    the power to ensure that internal control procedures for imports are
    established and followed by all company departments.

-   Written internal control procedures assign duties and tasks to a
    position rather than a person.

-   The company has good interdepartmental communication about Customs
    matters.

-   The company conducts and documents periodic reviews of 9802.00.80
    merchandise and uses the results to make corrections to entries and
    changes to its import operations as appropriate.

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-   The importer obtains manufacturers' affidavits and other
    documentation supporting U.S. origin prior to claiming 9802.00.80.

-   The importer obtains documentation to support the FOB U.S. port of
    export value of components prior to claiming 9802.00.80.

######### Examples of Documents and Information to Review

-   Written internal control policies and procedures for ensuring proper
    9802.00.80 eligibility

-   The company's responses to the questionnaire

-   Interviews with company staff concerning actual procedures and
    controls specific to 9802.00.80

-   Company documentation that supports monitoring and verification of
    established and/or written internal controls over 9802.00.80, such
    as:

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-   Entry Summary and invoice

-   Manufacturer's affidavits

-   Certificates of origin

-   Cost submission

-   Production records

-   Inventory records

-   Export documents (e.g., Mexican Pedimento, invoice, bill of lading)

-   Foreign Assembler's Declaration

-   Endorsement by the importer

-   Cost sheets

-   Accounting records

-   Bills of materials

-   Specification sheets

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-   Internal and external audit reports

**Suggested Testing**

PAS team judgement should be used to determine the type and amount of
testing needed to evaluate the effectiveness of internal controls and to
determine whether there is a sufficient risk to warrant proceeding to
the Assessment Compliance Testing (ACT) phase.

Using the chart and guidelines below, determine through limited
judgmental testing whether the company's internal controls are
effective.

To determine the extensiveness of internal control testing, it is
necessary to evaluate:

1.  The **risk exposure**; and

2.  The **internal controls** system, by determining whether the
    controls are in operation, how the controls were applied, how
    consistently they were applied, and who applies hem.

**Risk Exposure**

Risk exposure is the probability of significant Customs noncompliance.
In each step of determining risk exposure, consideration should be given
to:

1.  Significance (to Customs) and sensitivity (e.g., issues of interest
    to Congress or the media, or affecting admissibility)

2.  Susceptibility (of making incorrect declarations)

3.  The existence of any red flags

4.  Management support (of strong internal controls)

5.  Competent personnel (to adequately administer the controls)

*Steps to Determine Risk Exposure*

1.  Evaluate problems identified in the profile, exam discrepancy and
    summary discrepancy rates, questionnaire, and concerns raised by the
    import specialist and account manager.

2.  Perform macro risk analysis tests.

3.  Analyze all results to determine the risk exposure level.

4.  Continually reassess risk exposure as more information is gathered
    from evaluating internal control and performing other work in the
    PAS. Evaluation of risk exposure is not simply a one-time process
    that occurs at the start of the PAS process. .

**Macro Risk Analysis Examples**

*Example A: Low Risk Exposure*

Customs Automated Commercial System (ACS) data show that in all
instances at entry the company made a North American Free Trade
Agreement (NAFTA) claim with its 9802.00.80 claim. NAFTA verification
was made of the exporter the previous year. As a result, if the
components entered under 9802.00.80 were found to be ineligible, there
would be no revenue effect because the finished good was entered under
NAFTA. While being interviewed on its 9802.00.80 internal controls, the
company agrees that there is no advantage to its claiming 9802.00.80
because as of July 1, 1999, there is no merchandise processing fee (MPF)
for NAFTA claims. Because 9802.00.80 claims are made only on goods for
which a NAFTA claim is made, the company agrees to cease making
9802.00.80 claims. Therefore, the macro risk analysis indicates a low
risk exposure.

*Example B: High Risk Exposure*

The company provides the PAS team with a database of components that
were entered under 9802.00.80 during the scope of the PAS. The database
includes the part number, origin, manufacturer, quantity, and actual
unit cost for each 9802.00.80 component. Using the database, the team
calculates the total 9802.00.80 value declared to Customs according to
company records and compares it against the 9802.00.80 value shown on
the cost submissions. The claims made according to company records were
\$3 million less than the 9802.00.80 value shown on the cost
submissions. Using the importer's average duty rate per Customs ACS
data, the team determines that the \$3 million in value would result in
underpaid duties of \$195,000. During the scope period, the importer had
paid \$1.5 million in duties. In addition, based on their experience
with the company, the import specialist and account manager believed
that 9802.00.80 claims would continue to be made. Therefore, the macro
risk analyses indicate a high risk exposure.

**System of Internal Controls**

To evaluate the internal control system:

1.  Consider the five components of internal control:

-   Control Environment

-   Risk Assessment

-   Control Activities

-   Information and Communication

-   Monitoring

2.  Review relevant Customs and company documents to identify and
    understand relevant internal controls over 9802.00.80. (Examples of
    documents and information to review are listed above.)

3.  Determine whether the company has established and follows
    procedures. Review:

-   Documentary evidence of the results of periodic internal control
    reviews/testing and corrective action implemented

-   Documentary evidence of communication with the broker and company
    departments on 9802.00.80 issues, including company testing of
    broker operations and verification that the broker followed company
    instructions

-   Documentary evidence that company-specific rulings are requested and
    followed

-   Documentary evidence of intercompany communications to ensure that
    correct information is provided to Customs

-   Training records and materials used to educate staff on Customs
    matters

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-   Documentary evidence that the company ensures that the merchandise
    was exported from the United States without payment of drawback

-   Documentary evidence that the company ensures that the merchandise
    was not advanced in value or improved in condition while abroad

4.  Review written policies and procedures and interview applicable
    company personnel to complete appropriate sections of the "Worksheet
    for Evaluating Internal Controls Over 9802.00.80."

> Note: The internal control assessment should include steps to:

-   Identify and understand internal controls

-   Determine what is already known about control effectiveness

-   Assess the adequacy of internal control design

-   Determine whether controls are implemented and effective

-   Determine whether transaction processes are documented

**Extensiveness of Audit Tests (Testing Limits)**

The purpose of limited PAS testing is to take a survey in order to
determine the necessity for and extent of substantive tests. In some
circumstances the PAS team may decide that it probably will not be able
to form an opinion based on limited PAS testing. In such cases, it may
be necessary to proceed immediately to the ACT process. If the PAS team
believes that it can form an opinion based on limited PAS testing, it
should test the appropriate number of controls and associated
transactions using the table below. Tests may be appropriate for various
areas below the HTSUS 9802.00.80 level that compliance will be reported
on. For example, the company may import from several foreign companies,
but testing may be necessary only for certain companies or only for
certain imports that have been identified as the primary risks.

**Determine Extensiveness of Audit Tests**

+----------+---+------------------+---+-------------------+-------------+
| **Risk   | * | > **Preliminary  | * | **Extensiveness   | **Testing** |
| Ex       | * | > Review         | * | of Audit Test**   |             |
| posure** | + | > Internal       | = |                   | **Limit**   |
|          | * | > Control**      | * |                   |             |
|          | * |                  | * |                   |             |
+==========+===+==================+===+===================+=============+
|          |   |                  |   |                   |             |
+----------+---+------------------+---+-------------------+-------------+
| **High** |   | Weak             |   | High              | 10-20       |
+----------+---+------------------+---+-------------------+-------------+
|          |   | Adequate         |   | Moderate to High  |             |
+----------+---+------------------+---+-------------------+-------------+
|          |   | Strong           |   | Low to Moderate   |             |
+----------+---+------------------+---+-------------------+-------------+
|          |   |                  |   |                   |             |
+----------+---+------------------+---+-------------------+-------------+
| **Mo     |   | Weak             |   | Moderate to High  | 5-15        |
| derate** |   |                  |   |                   |             |
+----------+---+------------------+---+-------------------+-------------+
|          |   | Adequate         |   | Moderate          |             |
+----------+---+------------------+---+-------------------+-------------+
|          |   | Strong           |   | Low               |             |
+----------+---+------------------+---+-------------------+-------------+
|          |   |                  |   |                   |             |
+----------+---+------------------+---+-------------------+-------------+
| **Low**  |   | Weak             |   | Low to Moderate   | 1-10        |
+----------+---+------------------+---+-------------------+-------------+
|          |   | Adequate         |   | Low               |             |
+----------+---+------------------+---+-------------------+-------------+
|          |   | Strong           |   | Very Low          |             |
+----------+---+------------------+---+-------------------+-------------+

*Source*: Adapted from *Assessing Internal Controls in Performance
Audits.*

Column titled "Testing Limit" reflects Customs test sizes.

*Example: Validation of Company Control Activity*

One of the company's internal controls over 9802.00.80 is that it
reviews every 20^th^ 9802.00.80 transaction to ensure that 9802.00.80
transactions are properly declared. The company maintains a "9802.00.80
Review Log" to document this review process. To determine internal
control effectiveness, the PAS team may decide to verify that the
company review procedure identifies incorrectly declared 9802.00.80 and
that the company takes appropriate corrective action, including improved
procedures to avoid future improperly declared 9802.00.80.

The PAS team may select a limited number of reviewed items from the
"9802.00.80 Review Log" to verify that 9802.00.80 was properly reviewed
to determine accurate declaration of 9802.00.80 and that any incorrectly
declared 9802.00.80 entries were corrected and reported to Customs.

In addition, the PAS team should verify that the company took action to
avoid future improperly declared 9802.00.80 after such errors were
identified. In order to do this, the PAS team should verify that the
same types of improperly declared items were correctly declared on
subsequent entries. The following are examples of some of the tests that
can be performed to determine whether 9802.00.80 are accurately
declared.

Origin

-   Compare the dates of manufacturers' affidavits to the dates of
    9802.00.80 claims.

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-   Review purchase orders and bills of materials to identify dual
    sourcing of materials.

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-   Conduct third-party verifications to verify origin.

Usage

-   Using inventory and accounting records identify the quantities of
    components purchased and shipped compared to the quantities claimed
    as 9802.00.80.

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-   Conduct a plant tour.

Value

-   Compare the 9802.00.80 value on the cost submission to accounting
    records.

**Evaluation of Pre-Assessment Survey Testing Results**

The following steps are guidance for determining the effectiveness of
the company\'s internal controls over 9802.00.80.

1.  Complete the "Worksheet for Evaluating Internal Control Over
    9802.00.80" to determine whether risk determination is acceptable or
    unacceptable and document why. Put the results of testing in
    perspective and evaluate confirmed weakness as a whole. The
    evaluation should consider the results of the internal control
    testing, problems identified in the profile, and/or concerns raised
    by the import specialist or account manager. The team must evaluate
    the PAS results based on the specific situation(s).

> Customs considers risk to be unacceptable when testing reveals that
> internal controls were not sufficient or effective in providing
> reasonable assurance that accurate, timely, and complete declarations
> are reported to Customs.

2.  The following will help the PAS team determine whether conditions
    warrant proceeding to ACT:

-   **Do not proceed to ACT (Revenue)** **if:**

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-   Cost-benefit analysis warrants no further effort (i.e., do not spend
    a significant amount of resources to identify a potential loss of
    revenue considered insignificant).

-   The PAS indicated that the revenue loss was due to an isolated
    incident.

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-   The company agrees with the PAS finding(s) and agrees to quantify
    actual loss of revenue within an acceptable time frame.

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-   **Do not proceed to ACT (Compliance) if:**

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-   Error was isolated and the importer can show identical entry lines
    are correct.

-   Errors were systemic, but the importer agrees to develop and
    implement a compliance improvement plan within an acceptable time
    frame.

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-   **Proceed to ACT (Revenue)** **if:**

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-   The company does not have adequate internal control, and the PAS
    indicated material loss of revenue that cannot be quantified without
    statistical sampling or further review.

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-   The importer will not quantify loss of revenue.

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-   **Proceed to ACT (Compliance)** **if:**

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-   The importer refuses to take corrective action on systemic errors,
    and it is necessary to calculate a compliance rate.

> Note: If substantive tests necessary to determine a compliance rate or
> revenue loss can be performed quickly and without extensive effort,
> the team should immediately perform the substantive tests without
> proceeding to ACT.

###### 

3.  Determine whether referrals should be made for enforcement actions.

###### Examples

The following examples of situations that might be encountered under PAS
are *for clarification purposes only.*

## *Example A: Situation in which the team would not proceed to ACT (Compliance)*

###### Company's Policies and Procedures

The company's Customs Compliance Manual requires the buyer to identify
U.S.-origin components used in the assembly of imported articles and
obtain a declaration from the foreign company performing the assembly.
This includes obtaining manufacturers' affidavits from suppliers prior
to making the 9802.00.80 claim. The affidavits are compared to the bills
of materials for imported articles to identify where a 9802.00.80 claim
can be made. The buyer submits the declaration to the company's Customs
Department and provides assistance to the Customs Department, if
necessary, in preparing the Importer's Declaration. The Customs
Department in turn is responsible for submitting these declarations to
the Customs broker with instructions to include them with the entry. The
buyer is also responsible for conferring with the foreign company to
make sure that the invoice to be sent to the company sets forth the cost
or value of the articles and the assembly. The Customs Compliance Manual
further requires the Customs Department to maintain and have ready for
submission the foreign customs entry, foreign customs invoice, and bill
of lading/air waybill related to the export of the merchandise from the
United States for assembly in case the U.S. Customs Service should
request additional supporting documentation.

###### Monitoring Activities

The Customs Compliance Manual also includes procedures to verify
compliance. First, the company's Customs Department conducts a cursory
review of all entries filed by the Customs broker. If an error is
identified, the company sends the broker a letter describing the type of
error, with instructions to correct the error. In addition, the company
reconciles quantities of exported articles to imported articles on a
monthly basis to ensure that materials imported do not exceed quantities
of materials originally exported.

Finally, the Manual establishes procedures for conducting internal
audits on a semiannual basis. The Manual requires the import/export
compliance manager to select 26 entries (one from each week in the
6-month period) for detailed review. If the review discloses any entry
to be substantially noncompliant, the manager also checks entries made
in the 15 days before and 15 days after the noncompliant entry was made.
Within 2 weeks of completing the audit, the manager is required to
prepare a report with findings and recommendations and submit it to the
director of the Import/Export Department.

###### Pre-Assessment Survey

To determine whether the controls are working, the PAS team:

-   Interviewed employees in the Purchasing Department to determine
    whether they are familiar with the procedures established in the
    Customs Compliance Manual

-   Selected five entries from the Automated Commercial System (ACS)
    and:

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-   Reviewed the manufacturers' affidavits and compares the part numbers
    against the bills of materials

-   Trace the 9802.00.80 value shown on the bills of materials to the
    9802.00.80 claim made at entry

-   Identified part numbers on the bills of materials that were not
    covered by a manufacturer's affidavit

-   Determined whether the company had the assembler's and importer's
    declarations on file

-   Reviewed assembly orders to determine the type of work to be
    conducted by the foreign company

-   Determined whether the invoice identified the value of the foreign
    materials, assembly performed on the merchandise, and the cost or
    the value of the article

-   Compared the assembly orders to the commercial invoices

-   Determined whether the company maintained copies of the foreign
    customs entry, foreign customs invoice, and bill of lading or airway
    bill

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-   Reviewed the correspondence file to the Customs brokers

-   Reviewed the most current compliance report prepared by the
    import/export compliance manager

Since the PAS team was able to verify that controls are in place and
working effectively, proceeding to ACT was not considered necessary.

####### 

## *Example B: Situation in which the team would not proceed to ACT (Revenue)*

The circumstances are the same as in example A above, except that the
company failed to maintain the assemblers' declarations and
manufacturers' affidavits and stopped conducting semiannual compliance
reviews. However, the company agreed with the PAS findings and was able
to quantify the actual loss of revenue caused by not being able to
support 9802.00.80 eligibility. Therefore, proceeding to ACT was not
considered necessary.

## *Example C: Situation in which the team would proceed to ACT (Compliance)* 

####### 

The circumstances are the same as in example B above, except that the
company disagreed with taking proper corrective action. The company was
noncompliant with a specific Customs Regulation, failed to monitor
compliance with Customs requirements, and did not agree to take
corrective action. It was necessary to calculate a compliance rate.
Thus, the audit team proceeded to ACT.

## *Example D: Situation in which the team would proceed to ACT (Revenue)*

The circumstances are the same as in example B above, except that the
company was not able to quantify the loss of revenue caused by not being
able to support 9802.00.80 eligibility. Therefore, proceeding to ACT was
considered necessary.

**Worksheet for Evaluating Internal Control**

**Over 9802.00.80**

Objective: Determine whether the company has procedures designed to
effectively control Customs risks related to 9802.00.80.

Risk Determination:

  ------------------------------------- ---------------------------------
                                        

  **Acceptable**                        

  **Unacceptable**                      
  ------------------------------------- ---------------------------------

  --------------------------------------------------------------------------------------------------
  **Internal Control**   **Yes**   **No**   **Not          **Internal   **Work Paper  **Comments**
                                            Applicable**   Control      Reference**   
                                                           Manual Page                
                                                           Number**                   
  ---------------------- --------- -------- -------------- ------------ ------------- --------------
  **9802.00.80 General**                                                              

                                                                                      

  Are internal controls                                                               
  over 9802.00.80                                                                     
  formally documented?                                                                

                                                                                      

  Are written policies                                                                
  and procedures                                                                      
  approved by                                                                         
  management?                                                                         

                                                                                      

  Are written policies                                                                
  and procedures                                                                      
  reviewed and updated                                                                
  periodically?                                                                       

                                                                                      

  Is one manager                                                                      
  ultimately responsible                                                              
  for control of the                                                                  
  Import Department,                                                                  
  including 9802.00.80?                                                               

                                                                                      

  Does that manager have                                                              
  knowledge of Customs                                                                
  matters and the                                                                     
  authority to ensure                                                                 
  that internal control                                                               
  procedures for imports                                                              
  are established and                                                                 
  followed by all                                                                     
  company departments?                                                                

                                                                                      

  Do written internal                                                                 
  control procedures                                                                  
  assign 9802.00.80                                                                   
  duties and tasks to a                                                               
  position rather than a                                                              
  person?                                                                             

                                                                                      

  Does the company have                                                               
  good interdepartmental                                                              
  communication about                                                                 
  9802.00.80 matters? Is                                                              
  a reliable                                                                          
  communication system                                                                
  in place to ensure                                                                  
  that employees have                                                                 
  access to current                                                                   
  9802.00.80 and other                                                                
  Customs information                                                                 
  (e.g., rulings)?                                                                    

                                                                                      

  Does the company                                                                    
  conduct and document                                                                
  periodic reviews of                                                                 
  entries declared under                                                              
  9802.00.80?                                                                         

                                                                                      

  Does the company use                                                                
  9802.00.80 periodic                                                                 
  review results to make                                                              
  9802.00.80 corrections                                                              
  to past and present                                                                 
  filed entries?                                                                      

                                                                                      

  Does the company use                                                                
  9802.00.80 periodic                                                                 
  reviews to make                                                                     
  changes to its import                                                               
  operations as                                                                       
  appropriate?                                                                        

                                                                                      

  Does the company                                                                    
  provide adequate                                                                    
  training for employees                                                              
  responsible for                                                                     
  Customs matters?                                                                    

                                                                                      

  **9802.00.80                                                                        
  Specific**                                                                          

                                                                                      

  **Documentation**.                                                                  
  Does the company's                                                                  
  recordkeeping system                                                                
  include a retention                                                                 
  program and identify                                                                
  documents needed to                                                                 
  support 9802.00.80                                                                  
  claims?                                                                             

                                                                                      

  **Documentation**. Has                                                              
  the company                                                                         
  established a reliable                                                              
  system or procedure to                                                              
  produce any required                                                                
  entry documentation                                                                 
  and supporting                                                                      
  information?                                                                        

                                                                                      

  **Origin**. Does the                                                                
  company have                                                                        
  procedures in place to                                                              
  verify U.S. origin                                                                  
  (e.g., suppliers are                                                                
  required to provide                                                                 
  manufacturers'                                                                      
  affidavits,                                                                         
  assemblers'                                                                         
  declarations, or other                                                              
  documentation proving                                                               
  U.S.-origin parts)?                                                                 

                                                                                      

  **Origin**. Does the                                                                
  company have                                                                        
  procedures for                                                                      
  follow-up with                                                                      
  suppliers to confirm                                                                
  the accuracy of such                                                                
  information? Is                                                                     
  documentation                                                                       
  maintained to support                                                               
  follow-up of                                                                        
  information with                                                                    
  suppliers?                                                                          

                                                                                      

  **Origin**. Do                                                                      
  commercial invoices                                                                 
  include country of                                                                  
  origin, value, part                                                                 
  number, and serial                                                                  
  numbers?                                                                            

                                                                                      

  **Origin**. Are part                                                                
  numbers for                                                                         
  U.S.-origin components                                                              
  maintained in a                                                                     
  database that is                                                                    
  provided to the                                                                     
  company's brokers?                                                                  

                                                                                      

  **Origin**. Does the                                                                
  importer maintain                                                                   
  manufacturers'                                                                      
  affidavits or other                                                                 
  documentation proving                                                               
  U.S. origin?                                                                        

                                                                                      

  **Advanced or                                                                       
  Improved**. Does the                                                                
  importer maintain                                                                   
  assemblers'                                                                         
  declarations or other                                                               
  documentation                                                                       
  attesting to the fact                                                               
  that the merchandise                                                                
  was not advanced in                                                                 
  value or improved in                                                                
  condition?                                                                          

                                                                                      

  **Advanced or                                                                       
  Improved**. Are                                                                     
  descriptions of the                                                                 
  assembly process                                                                    
  obtained prior to                                                                   
  making 9802.00.80                                                                   
  claims on new or                                                                    
  revised products?                                                                   

                                                                                      

  **Usage**. Does the                                                                 
  importer have specific                                                              
  identifiers, such as                                                                
  serial numbers, to                                                                  
  trace the merchandise                                                               
  through the inventory                                                               
  system?                                                                             

                                                                                      

  **Usage**. Are                                                                      
  suppliers required to                                                               
  provide a bill of                                                                   
  materials and a cost                                                                
  sheet that identify                                                                 
  9802 components and                                                                 
  confirm usage of these                                                              
  U.S. components?                                                                    

                                                                                      

  **Value**. Is the cost                                                              
  submission filed in a                                                               
  timely manner, and                                                                  
  does it include the                                                                 
  actual cost of                                                                      
  9802.00.80 claims?                                                                  

                                                                                      

  Are the Design and                                                                  
  Purchasing Departments                                                              
  required to notify the                                                              
  company's Customs                                                                   
  Department formally of                                                              
  any design/supplier                                                                 
  changes that affect                                                                 
  imported products?                                                                  

                                                                                      

  **Nonqualifying**.                                                                  
  Does the company have                                                               
  procedures in place to                                                              
  ensure that drawback                                                                
  was not previously                                                                  
  claimed on articles                                                                 
  entered under                                                                       
  9802.00.80?                                                                         

                                                                                      

  **Internal Control                                                                  
  Conclusions**                                                                       

                                                                                      

  Does the company                                                                    
  provide adequate                                                                    
  broker oversight to                                                                 
  ensure proper                                                                       
  9802.00.80                                                                          
  declarations and data                                                               
  accuracy?                                                                           

                                                                                      

  Does PAS testing                                                                    
  verify that control                                                                 
  procedures were being                                                               
  performed?                                                                          

                                                                                      

  Do interviews with                                                                  
  responsible persons                                                                 
  support control                                                                     
  procedures?                                                                         

                                                                                      

  Does the company have                                                               
  adequate internal                                                                   
  control to address                                                                  
  specific issues                                                                     
  identified in the                                                                   
  profile?                                                                            

                                                                                      

  **List                                                                              
  company-specific                                                                    
  procedures and                                                                      
  controls below (if                                                                  
  applicable):**                                                                      
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