Tatsuya has posted that Japan Customs under the Ministry of Finance (“MOF”) conducts post-entry audit every year to review the import declarations to see if companies are paying the correct amount of duties and taxes… and this year was not good!!

From July 2009 to June 2009, 6,080 companies were audited with the following results:

Amount of penalty collected on incorrect import declarations is the highest based on historical records

The total non-declared and short-declared value of all investigated companies was approximately JPY198 billion (approximately US$2.2 billion). The amount of penalty collected for such customs violations was approximately JPY12.9 billion (US$144 million), an increase of 15.4% compared with previous year’s post audit results. This amount is the highest and worst in the history of customs valuation relating to import declarations.

Increased Number of Non-Compliance Companies

The post-entry audit team investigated a total of 6,080 companies. Of these, 4,188 or 68.9% of companies investigated were found to have failed to make correct import declarations, the numbers of non-compliant companies increased 2.2% compared with last year. The average penalty amount per company was JPY3.1 millions (US$34,400).

Incredible! In case you weren’t convinced already, these numbers provide excellent proof of the value of trade compliance.

Please also visit Global Trade Compliance (Japan) for 3 Sample cases of Short-Declaration Subject to Penalties and the Top 5 Product Categories from the report.

Here’s a message/warning from Japan customs…

Japan Customs strongly encourages importers to learn and understand the customs valuation system. The lack of knowledge about customs valuation and interpretation of customs law may result in additional costs to companies. Non-compliance with customs laws may result in imposition of huge penalties and may damage a company’s brand image and credibility.

Read More at: Customs Published Results of Post-Entry Audit; Findings Show Highest Non-Compliance amount in History