## Annex 1. Example of Importer Database

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**Canonical URL:** [Annex 1. Example of Importer Database](https://www.imf.org/-/media/files/publications/tnm/2025/english/tnmea2025002.pdf)

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### I. Purpose and scope
- Guidance for customs administrations’ senior managers and technical staff on how to develop a compliance improvement plan (CIP) based on an integrated risk-management (IRM) approach.
- A CIP based on IRM:
  - Helps fulfill core mandates and strategic objectives.
  - Allows addressing noncompliance with an institutional and long-term strategic view.
  - Aims to improve institutional image internally and among the trade community.
  - Enables facilitating compliance and detecting and sanctioning noncompliance in a timely manner by:
    - identifying and implementing measures and procedures that enhance controls and facilitate compliance;
    - determining the most appropriate means and moment to implement them;
    - identifying and adopting the legal powers needed to achieve them.

### II. Integrated risk management (IRM): concept and institutional implications
- IRM is more than defining and applying risk criteria for cargo selectivity or PCA case identification; it requires a mindset change and a crosscutting strategic vision.
- Key IRM elements:
  - Optimal data management.
  - Adoption of technologies to strengthen processes and reduce officials’ discretional decision making.
  - Assessment of staff’s technical skills.
  - Implementation of regulatory changes needed.
- IRM enables:
  - Better preparedness to identify and respond to significant risks.
  - Identification, prioritization, and correction of underlying causes to improve voluntary compliance.
  - Faster adaptation to changing environments.
- IRM should be integrated into governance and strategic frameworks as the foundation to improve compliance.

### III. Limitations of narrow risk-management approaches
- Common shortcomings:
  - Failing to identify and address risks arising prior, during, and after goods are cleared and released.
  - Not assessing the outcome and effectiveness of control measures or their impact on operator behavior.
  - Overreliance on transaction-by-transaction risk analysis without holistic assessment of operator segments and institutional vulnerabilities.
- A CIP based on IRM addresses risks holistically by:
  - segmenting operators according to total value of transactions and risk levels;
  - identifying root causes of risks at the institutional level via assessment of core customs processes or work streams;
  - defining and implementing tailored treatment measures to mitigate risks per operator segment and to address vulnerabilities within core processes.

### IV. Main principles when adopting an IRM approach
- Involve the whole institution when developing and adopting an IRM approach.
- Move from a corrective to preventive approach by implementing initiatives to:
  - enhance means to authenticate the identity of traders;
  - identify and modify regulations that limit the customs administration’s capacities to deter noncompliance;
  - eliminate paper forms and automate as many procedures as possible, securing usable and manageable data;
  - reduce or eliminate discretional decision making in all procedures;
  - develop or strengthen a single-window system and Authorized Economic Operator (AEO) program;
  - expand electronic validations and cooperation initiatives and programs with the tax administration, other government agencies, and trade partners’ customs administrations.
- Analyze the tax-customs-trade context by identifying main factors allowing tax evasion, customs fraud, and smuggling, and complexity in managing exemptions, special regimes, and free trade zones.
- Ensure IRM is reflected in the institutional strategic plan so initiatives and projects align with risk mitigation.
- Promote a data-driven culture and management within the organization.
- Implement technologies that:
  - facilitate compliance;
  - expedite processes;
  - reduce discretional decision making;
  - strengthen cargo traceability, controls, and procedures;
  - improve information collection, flow, and management;
  - enhance and expand interoperability with third parties;
  - implement monitoring and accountability of processes and staff.
- Measure periodically the effect of the risk mitigation strategy to assess whether collective efforts modify operators’ behavior and improve voluntary compliance.

### V. What a CIP based on an IRM approach entails
- Distinction from transactional risk-management:
  - Transactional approach analyzes variables (origin, type, value, compliance records) to define risk profiles for cargo selectivity (red, yellow, green channels).
  - A CIP takes a holistic approach, grouping the total population of traders and their transactions to select appropriate treatment measures and to identify root causes of noncompliance via assessment of core customs processes against good-practice benchmarks.
- A CIP comprises five key components:
  1. segmentation of operators by their size and risk level,
  2. identification of the root causes of risks throughout the core customs processes that may lead to the materialization of compliance risks,
  3. definition and implementation of treatments to mitigate risks under each segment of operators and to correct vulnerabilities identified within the core processes,
  4. development of key performance indicators to determine to what extent the selected treatments and measures contribute to preventing or mitigating risks and improving compliance,
  5. establishment of clear and effective governance.

### VI. Main benefits of developing a CIP based on an IRM approach
- 1. Modify the behavior of noncompliant operators through tailor-made treatments (education, deterrence, enhanced enforcement).
- 2. Focus institutional efforts: senior management will know which key areas need more attention and what needs to be done.
- 3. Optimize resources: easier understanding of where and when to allocate limited resources to support strategic goals and objectives.
- 4. Ensure that risk treatment strategies are applied based on their expected effect because risks are identified and addressed holistically.
- 5. Implement a unified and institutional approach when addressing risks: treatments can be defined by an operator or clusters of operators and applied at different stages, maximizing efforts and avoiding duplications.
- 6. Adapt to changing circumstances: a CIP is dynamic and constantly updated as new risks arise.
- 7. Transform into a data-driven organization: enable decision-making based on reliable information and utilize indicators to monitor compliance progress.
- 8. Improve predictability and enhance facilitation for the trade community through clear and traceable procedures that make compliance easier and less costly than noncompliance.

### IRM approach and purpose of a CIP (implementation fundamentals)
- Assemble a team of experts in: operations, intelligence, enforcement, legal, information technology, and data analytics to:
  - extract and analyze data to understand the total population of traders and define tailored treatments for each group to induce greater voluntary compliance;
  - identify main vulnerabilities within core processes and define preventive, mitigating, and corrective measures to prevent risk materialization.
- Key components summarized: segmentation of operators by size and risk level; definition and implementation of treatments per segment; core processes assessment and identification of limitations and vulnerabilities; prioritization; key indicators to measure compliance; governance through a risk management committee.

### Segmentation of operators: objectives and data requirements
- Main objective: categorize the total population of traders according to characteristics and behavior to group them into homogeneous segments for targeted facilitation and enforcement measures.
- Data requirements:
  - A reliable database with key, clean, and timely data.
  - Data elements describing import and export transactions over a period that includes a representative sample of noncompliant operators.
  - If feasible, enrich the database with quality data from other government agencies and nongovernment sources.

### Stepwise segmentation and GRI development (Steps 1–6)
- Step 1. Segmentation by size:
  - Size determined based on CIF/FOB value of transactions relative to country foreign trade.
  - Grouped into three segments using predefined thresholds for transactions made in the past two years:
    - large: $500,000 ≤
    - medium: < $100,000 ≤ $500,000
    - small: $0 ≤ $100,000
  - Expectation: large segment has lowest number of operators and highest proportion of total trade; small segment has largest number of operators and lowest proportion of total trade.
- Step 2. Development of a GRI:
  - Define a set of indicators to identify potential or real irregularities.
  - Indicator categories: (1) risk variables related to transactions, (2) customs records, (3) tax records, (4) cross-checking data between tax and customs administrations.
- Step 3. Conversion to binary variables:
  - Convert indicator results to “0” when they show no risk (“NO”) or “1” when they show risk (“YES”).
  - Example indicator: “Importer imports goods subject to value-added tax (VAT) and pays it at customs but files a larger amount of VAT on imports in tax returns” → results turned into “1” if true, otherwise “0”.
- Step 4. Assign weight to each indicator:
  - Weighting techniques:
    1. distribute weight equally among total number of indicators;
    2. assign according to experience of customs officials;
    3. select frequency of inconsistencies based on a subsample of operators who have committed irregularities (weights assigned according to number of inconsistencies in each indicator);
    4. use software that identifies importance of indicators.
  - Technique “(3) Frequency of inconsistencies” specifics:
    - Create subsample of noncompliant operators; each operator gets “1” for each indicator with an inconsistency; sum “1s” per indicator to get totals A, B, ..., Z; total ## = A + B + (...) + Z.
    - Weights = A/##, B/##, C/##, Z/##.
    - Define a tolerance threshold; indicators with i/## > tolerance threshold are selected for GRI calculation.
- Step 5. GRI calculation:
  - GRI = ∑_{i=1}^{n} P_i R_i
    - P_i = Weight assigned to indicator i
    - R_i = Answer obtained by the indicator
    - n = Total of indicators
  - GRI comprises relevant indicators and assigned weights; formula must be applied to all operators to identify each operator’s risk level.
  - Depending on maturity, analytical software or artificial intelligence may be used.
- Step 6. Definition of risk thresholds (risk tolerance):
  - Each customs administration defines thresholds for low-, medium-, and high-risk bars according to its specific risks and challenges.
  - Distribution of GRIs helps set values for the bars; bars can be raised or lowered to calibrate effectiveness of treatment measures.

### Treatments, prioritization, and examples by segment
- Treatments defined per segment (large, medium, small) and by risk level (High, Medium, Low). Examples:
  - High risk / Large operators:
    - High number of examinations
    - Comprehensive audits
    - Suspension of benefits and special programs
    - Criminal procedures
  - Medium risk / Large operators:
    - More examinations
    - Focused audits
    - Customized meeting
  - Low risk / Large operators:
    - Sporadic examinations
    - Training plan
    - Personalized service
    - Deferred payments
    - AEO or trusted traders programs
- Treatment types: Corrective, Dissuasive, Informative/Facilitative Approach.
- Core process risk areas: Valuation, Incorrect country of origin, Misclassification, Prohibited/Restricted goods, Exemptions/Suspensions, Intellectual property rights, Smuggling, Fiscal benefits abuses.

### Indicators and examples to measure compliance (Table 2 categories)
- Risk variables related to transactions:
  - High percentage of transactions conducted through high-risk (noncompliant) customs brokers.
  - High percentage of transactions include risky HS codes.
  - High percentage of transactions originate in countries considered of risk.
  - High proportion of serious violations detected in its transactions.
  - Growing percentage of transactions involving exemptions.
  - Growing percentage of transactions involving residual HS codes.
  - Repeat offenders.
- Customs records:
  - High proportion of serious violations detected in its transactions.
  - Growing percentage of transactions involving exemptions.
  - Residual HS codes usage, repeat offenders.
- Operator’s tax records:
  - Taxpayer not filing tax returns.
  - Irregularities found in audits conducted on the taxpayer’s records.
  - Taxpayer found manipulating transfer prices in transactions with foreign traders.
  - Repeat offenders.
- Cross-checking data between tax and customs administrations:
  - Importer files different VAT on imports than the VAT paid at customs.
  - Importer files different values of imports and exports than the values declared to customs.
  - Importer files different excise than the excise paid to customs.
  - ISIC codes used by the importer do not match HS codes.

### Adaptation, sensitivity, and expected outcomes
- Segmentation can be adapted (e.g., focus on importers trading certain sensitive goods or using special regimes).
- Sensitive goods examples: chemical products, electronics, medicines, steel, fuels, textiles, apparel, and footwear.
- Linking sensitive HS codes with operators and, depending on GRI, defining treatments and expanding analysis to identify links between importers, customs brokers, suppliers, etc.
- Expected outcomes of initial segmentation:
  1. A new element to help fine-tune the cargo selectivity module for imports, exports, and transits.
  2. A criterion of the operator’s risk profile for the AEO certification process.
  3. A key input for annual post-clearance audit planning.

### Segmentation sophistication, GRI by type of compliance risk, and sampling
- Segmentation can include:
  - (1) repeat offenders;
  - (2) number of operators who have not been subject to customs control; and
  - (3) tax collection, disaggregated by type of tax.
- Use GRI by type of compliance risk:
  - Design a GRI for each type of compliance risk with different indicators and weights.
  - Identify operators without historical offenses but who may be prone to commit specific risks.
- Sampling and comparison:
  - Extract samples of noncompliant importers and exporters for each compliance risk based on segmentation (size, risk level, type of compliance risk).
  - Identify and prioritize repeat offenders by adding a recurrence indicator.
  - Compare treated groups and control groups to measure treatment effects.
- Incorporate analytical tools:
  - Gradually adopt analytical software and technology to automate key indicators and GRI calculations (including mean, median, and standard deviation).
  - Connect new tools to the customs system for simpler updates.
  - As AI tools are incorporated, define new indicators and incorporate new data into analysis.

### Definition of Treatment Measures for Each Segment of Operators (Table 6 structure)
- Customs administrations determine:
  - (1) what treatments should be implemented;
  - (2) how and when such treatments must be implemented; and
  - (3) who should be responsible for implementation and monitoring.
- Treatments tailored by group (examples preserved):
  - Large Operators: Regular Engagement; Enhanced Engagement; Elevated Engagement; One-to-one interventions.
  - Medium Operators: Periodic Engagement; Enhanced Engagement; Elevated Engagement; One-to-several interventions.
  - Small Operators: No Touch; Light Touch; Elevated Engagement; One-to-many interventions.
- PCA = post-clearance audit. One-to-one interventions: high customization and costs; one-to-several: industry sector; one-to-many: applied to large numbers.

### Identification and Assessment of Vulnerabilities Within Core Customs Processes
- Risk categories:
  - Institutional risks: structural deficiencies (weak legal framework, inefficient processes, insufficient information, antiquated IT systems, inadequate infrastructure, limited human resources).
  - Compliance risks: operational risks prior, during, and after goods release (under- and overvaluation, misclassification, falsification of origin, smuggling).
- Assessment focus:
  - Identify root causes within core processes that lead to compliance risks.
  - Assess core processes for vulnerabilities prior, during, and after goods clearance, and capacities for end-to-end cargo traceability.
- Structural elements to assess:
  - (1) legal framework;
  - (2) processes;
  - (3) information;
  - (4) IT systems;
  - (5) infrastructure; and
  - (6) human resources.
- Systematic evaluation links each compliance risk to institutional vulnerabilities and identifies for each:
  - (1) probability of occurrence based on number of time periods present (quarters, years);
  - (2) effect (high, medium, low) based on indicators and experts’ opinion;
  - (3) prioritization based on expected effect and strategic need;
  - (4) treatment;
  - (5) period/completion;
  - (6) responsible unit; and
  - (7) indicators to measure treatment effectiveness.
- Table 7 template structure preserved for planning and monitoring.

### Narrowing a CIP to a Specific Compliance Risk
- A CIP can focus on a specific risk (e.g., undervaluation, misclassification, circumvention of origin):
  - Target analysis to operators trading sensitive goods linked to the selected risk.
  - Expert team identifies vulnerabilities within core processes that allow the risk to persist.
- Treatments and indicators:
  - Define treatments by segment and risk level, assign responsibilities, timelines, and indicators to monitor progress.
- Practical implementation:
  - Implementing sequential risk-specific CIPs may be practical given resource constraints; risk-specific CIPs can deliver early, prioritized results.

### Measuring Progress in Compliance Improvement (Box 2 examples)
- CIP evaluation objectives:
  - Determine whether treatment measures improve customs compliance.
  - Continuously monitor compliance improvement and execution progress of each treatment.
- Example indicators by level:
  - Strategic level:
    - Variation (increase or decrease) of the CIF value in imports for domestic consumption relative to total customs collection (per tax—VAT, excise—or HS code).
    - Level of customs collection relative to the variation (growth or reduction) of international trade.
    - Trends in average release times by each mode of transport.
    - Improvement in the foreign trade operator’s perception of the customs administration.
  - Tactical level:
    - Proportion of the number of transactions and the value of imports/exports carried out by Authorized Economic Operators and Trusted Traders program participants.
    - Evolution in the percentage of import/export declarations processed through each selectivity channel.
    - Assertiveness rate of the selectivity criteria.
    - Assertiveness rate of post-clearance audits.
    - Repeat offenders’ performance (number of cases detected).
    - Repeat offenders’ performance ($).
    - Repeat offenders who have improved behavior.
    - Number of customs advance rulings issued, per type/coverage, and percentage with respect to all declarations.
    - Proportion of non-tariff authorizations issued through the single-window system compared with the total authorizations issued through all means.
    - Indicators can be refined by focusing on a specific type of compliance risk, tax, excise, or sensitive goods (HS codes).
  - Operational level:
    - Compliance Risk / Number of Cases Detected / Periodical Variation Rate / Amount Reassessed / Periodical Variation Rate / Amount Collected / Periodical Variation Rate
      - 1. Misclassification
      - 2. Valuation
      - 3. Undeclared goods
      - 4. Origin
      - 5. Abuse of special regimes or exemption programs
- Additional measurement:
  - Use surveys of foreign trade operators to measure trust and community confidence and track perception changes over time.

- Example indicators and reported values for a process improvement case:
  - Indicator: Number of shipments where sea manifest data were filed electronically in advance (completely and on time) / Total number of shipments arrived.
    - Numerator: 5,478
    - Denominator: 16, 392
    - Result: 33.4%
  - Indicator: Number of shipping lines filing complete and timely sea manifest data in advance / Total number of shipping lines in operation.
    - Numerator: 12
    - Denominator: 43
    - Result: 2 7.9 %.

### Governance: Role and design of a Risk-Management Committee (RMC)
- Governance fundamentals:
  - Strong governance underpins design, implementation, and monitoring of CIPs.
  - Governance promotes sound evidence-based decision making and addresses managerial weaknesses and corruption risks.
  - Without rigorous governance and follow-up, CIPs become outdated and ineffective.
- Role of RMC:
  - Critical for planning, execution, monitoring, and timely decision making for CIP improvement.
  - Ensure integration and coordination among core customs functions and adopt a wide view of risk beyond selectivity criteria analysis.
  - Facilitate compliance for willing operators and modify behavior of noncompliant operators.
- Institutionalization and composition:
  - RMC should be multidisciplinary, institutionalized, and have full support of the Head of Customs.
  - Head of Customs must appoint a senior manager to lead and coordinate.
  - RMC must have clear terms of reference: defined roles and responsibilities, meeting frequency, agendas, protocols.
  - All decisions must be documented and followed up.
- Customs risk subcommittee:
  - Establish a customs risk subcommittee to report directly to the RMC when operating under integrated revenue administration.

### Other critical elements when developing and implementing a CIP
- Political support and senior management involvement is essential.
- Change management strategy to shift culture from enforcement-driven to risk-management approach; staff training is necessary.
- Communication strategy: internal (staff buy-in) and external (publish CIP elements to traders); use materials, workshops, webinars.
- Holistic trade facilitation: design across the supply chain to make compliance easier and less costly than noncompliance.
- Updated customs law, clear regulations, and sanctioning framework aligned with international good practices; sanctions must be proportionate and escalate for repeat offenders.
- Invest in the Post-Clearance Audit (PCA) function as an effective deterrent and educational tool; PCA needs strategic operator segmentation.
- Customs-specific CIP required even within integrated revenue administrations due to distinct risks and processes.
- Implementing effective interagency cooperation (tax–customs, other border agencies) through data exchange, single-window systems, operational protocols, and coordinated campaigns.
- Private sector participation provides critical sectoral and business-model information and supports secure operator programs (AEO).

### Data structures, templates, and practical tools (summaries from Annexes)
- Example importer database fields (grouped):
  - Customs Information: TINRegister; Date; Tot al Import Value 20XX; Tot al VAT Paid 20XX; Tot al Excise 20XX; Tot al Duties 20XX; Total Import Value with Exemptions 20XX; Total Import Value with Trade Agreements 20XX; Tot al Import Value with Residual HS Code; Total Customs Declarations 20XX; Tot al Customs Declarations with Control 20XX; Tot al Customs Offenses 20XX.
  - Revenue Authority Information: TINTa x p aye r Size; VAT 20XX; Domestic Market Sales; Domestic Market Purchases 20XX; International Market Purchases 20XX; Profitability 20XX; Tot al Assets 20XX; Tot al Liability 20XX; Number of Ta x Returns Not Submitted; Number of Audits; Number of Offenses.
  - Relevant considerations:
    - The period should be at least one year.
    - Information may consider a unique regime (final importation) and process (clearance process).
    - Only one currency needs to be selected to convert the variables.
    - Types of taxes could be disaggregated as a preference.
    - Register date describes the first transaction day.
    - Categorization by type of operators (individual, corporation, other documents authorized to operate) could be inserted.
    - Aggregate information per year; if database covers two years, define two columns per variable (e.g., Total Import Value 20X1 and Total Import Value 20X2).
  - CATALOG DATABASES example: Sensitive goods.
  - HS Code Information: HS Code- Number of Declarations with Control- Number of Offenses.
  - Importer vs. HS Code: TIN- HS Code- Total Import Value.

- Templates to identify vulnerabilities, define treatments, and monitor progress (examples)
  - Example 1: Insufficient and untimely sea manifest data — steps to identify vulnerabilities, prioritize, select treatments, assign responsibilities, and develop indicators (see above indicator examples and reported values).
  - Example 2: Valuation compliance risk — identify vulnerabilities (e.g., Lack of electronic customs value declaration), define treatments (legal changes, electronic forms), and set indicators with goals:
    - Percentage of importers filing electronic customs value declarations — goal set at 100 percent.
    - Percentage of import transactions where electronic customs value declarations were filed — goal set at 100 percent.

### ANNEX 3: Templates to Facilitate a CIP Focused on Undervaluation
- Baseline and scope:
  - According to customs records and PCAs, there are XX HS Codes linked to undervaluation. During the past fiscal year XX operators imported goods under such tariff items.
- Suggested indicators to establish baseline and monitor:
  - Proportion of total transactions and value of imports/exports carried out by AEO and TTP participants.
  - Evolution in percentage of import/export declarations processed through each selectivity channel.
  - Evolution in the assertiveness rate of the selectivity criteria and PCAs.
  - Unit price variation analysis for each sensitive HS Code.
- Importers’ segmentation by HS Codes and treatment measures:
  - Segmentation and treatment matrices preserved (including tokens such as LargeHigh risk#%#%$%$% and other segment cells).
  - Treatment measures at operational level for Large, Medium, Small operators across High Risk / Medium Risk / Low Risk.
- Vulnerabilities and institutional-level treatment template preserved for planning, responsibility assignment, and indicators.
- Notes: AEO = authorized economic operator; CIF = cost, insurance, and freight; HS code = Harmonization System code; IT = information technology; PCA = post-clearance audit; TTP = trusted trader program; VAT = value-added tax.

*Source: Annex 1. Example of Importer Database (tnmea2025002) — Developing a Risk-Based Compliance Improvement Plan for Customs Administrations*

### Annex 1. Example of Importer Database . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

### Annex 1. Example of Importer Database

### I. Purpose and scope
- Guidance for customs administrations’ senior managers and technical staff on how to develop a compliance improvement plan (CIP) based on an integrated risk-management (IRM) approach.
- A CIP based on IRM:
  - Helps fulfill core mandates and strategic objectives.
  - Allows addressing noncompliance with an institutional and long-term strategic view.
  - Aims to improve institutional image internally and among the trade community.
  - Enables facilitating compliance and detecting and sanctioning noncompliance in a timely manner by:
    - identifying and implementing measures and procedures that enhance controls and facilitate compliance;
    - determining the most appropriate means and moment to implement them;
    - identifying and adopting the legal powers needed to achieve them.

### II. Integrated risk management (IRM): concept and institutional implications
- IRM is more than defining and applying risk criteria for cargo selectivity or PCA case identification; it requires a mindset change and a crosscutting strategic vision.
- Key IRM elements:
  - Optimal data management.
  - Adoption of technologies to strengthen processes and reduce officials’ discretional decision making.
  - Assessment of staff’s technical skills.
  - Implementation of regulatory changes needed.
- IRM enables:
  - Better preparedness to identify and respond to significant risks.
  - Identification, prioritization, and correction of underlying causes to improve voluntary compliance.
  - Faster adaptation to changing environments.
- IRM should be integrated into governance and strategic frameworks as the foundation to improve compliance.

### III. Limitations of narrow risk-management approaches
- Common shortcomings:
  - Failing to identify and address risks arising prior, during, and after goods are cleared and released.
  - Not assessing the outcome and effectiveness of control measures or their impact on operator behavior.
  - Overreliance on transaction-by-transaction risk analysis without holistic assessment of operator segments and institutional vulnerabilities.
- A CIP based on IRM addresses risks holistically by:
  - segmenting operators according to total value of transactions and risk levels;
  - identifying root causes of risks at the institutional level via assessment of core customs processes or work streams;
  - defining and implementing tailored treatment measures to mitigate risks per operator segment and to address vulnerabilities within core processes.

### IV. Main principles when adopting an IRM approach (Box 1)
- Involve the whole institution when developing and adopting an IRM approach.
- Move from a corrective to preventive approach by implementing initiatives to:
  - enhance means to authenticate the identity of traders;
  - identify and modify regulations that limit the customs administration’s capacities to deter noncompliance;
  - eliminate paper forms and automate as many procedures as possible, securing usable and manageable data;
  - reduce or eliminate discretional decision making in all procedures;
  - develop or strengthen a single-window system and Authorized Economic Operator (AEO) program;
  - expand electronic validations and cooperation initiatives and programs with the tax administration, other government agencies, and trade partners’ customs administrations.
- Analyze the tax-customs-trade context by identifying main factors allowing tax evasion, customs fraud, and smuggling, and complexity in managing exemptions, special regimes, and free trade zones.
- Ensure IRM is reflected in the institutional strategic plan so initiatives and projects align with risk mitigation.
- Promote a data-driven culture and management within the organization.
- Implement technologies that:
  - facilitate compliance;
  - expedite processes;
  - reduce discretional decision making;
  - strengthen cargo traceability, controls, and procedures;
  - improve information collection, flow, and management;
  - enhance and expand interoperability with third parties;
  - implement monitoring and accountability of processes and staff.
- Measure periodically the effect of the risk mitigation strategy to assess whether collective efforts modify operators’ behavior and improve voluntary compliance.

### V. What a CIP based on an IRM approach entails
- Distinction from transactional risk-management:
  - Transactional approach analyzes variables (origin, type, value, compliance records) to define risk profiles for cargo selectivity (red, yellow, green channels).
  - A CIP takes a holistic approach, grouping the total population of traders and their transactions to select appropriate treatment measures and to identify root causes of noncompliance via assessment of core customs processes against good-practice benchmarks.
- A CIP comprises five key components:
  1. segmentation of operators by their size and risk level,
  2. identification of the root causes of risks throughout the core customs processes that may lead to the materialization of compliance risks,
  3. definition and implementation of treatments to mitigate risks under each segment of operators and to correct vulnerabilities identified within the core processes,
  4. development of key performance indicators to determine to what extent the selected treatments and measures contribute to preventing or mitigating risks and improving compliance,
  5. establishment of clear and effective governance.

### VI. Main benefits of developing a CIP based on an IRM approach
- 1. Modify the behavior of noncompliant operators through tailor-made treatments (education, deterrence, enhanced enforcement).
- 2. Focus institutional efforts: senior management will know which key areas need more attention and what needs to be done.
- 3. Optimize resources: easier understanding of where and when to allocate limited resources to support strategic goals and objectives.
- 4. Ensure that risk treatment strategies are applied based on their expected effect because risks are identified and addressed holistically.
- 5. Implement a unified and institutional approach when addressing risks: treatments can be defined by an operator or clusters of operators and applied at different stages, maximizing efforts and avoiding duplications.
- 6. Adapt to changing circumstances: a CIP is dynamic and constantly updated as new risks arise.
- 7. Transform into a data-driven organization: enable decision-making based on reliable information and utilize indicators to monitor compliance progress.
- 8. Improve predictability and enhance facilitation for the trade community through clear and traceable procedures that make compliance easier and less costly than noncompliance.

*Source: Annex 1. Example of Importer Database (tnmea2025002) — Developing a Risk-Based Compliance Improvement Plan for Customs Administrations*

### 9. Improve  the  institutional  image.  Because  it  operates  according  to  predictable  procedures  and

### tnmea2025002 - 9. Improve  the  institutional  image.  Because  it  operates  according  to  predictable  procedures  and

### IRM approach and purpose of a CIP
- A CIP based on an IRM approach is a tool to articulate an institutional strategy to address challenges that hinder compliance improvement.
- Work should start by assembling a team of experts in: operations, intelligence, enforcement, legal, information technology, and data analytics to:
  - extract and analyze data to understand the total population of traders and define tailored treatments for each group to induce greater voluntary compliance;
  - identify main vulnerabilities within core processes and define preventive, mitigating, and corrective measures to prevent risk materialization.
- Key components summarized (figure referenced): segmentation of operators by size and risk level; definition and implementation of treatments per segment; core processes assessment and identification of limitations and vulnerabilities; prioritization; key indicators to measure compliance; governance through a risk management committee.

### Segmentation of operators: objectives and data requirements
- Main objective: categorize the total population of traders according to characteristics and behavior to group them into homogeneous segments for targeted facilitation and enforcement measures.
- Data requirements:
  - A reliable database with key, clean, and timely data.
  - Data elements describing import and export transactions over a period that includes a representative sample of noncompliant operators.
  - If feasible, enrich the database with quality data from other government agencies and nongovernment sources.
- Example/simple database referenced (Annex 1).

### Stepwise segmentation and GRI development (Steps 1–6)
- Step 1. Segmentation by size:
  - Size determined based on CIF/FOB value of transactions relative to country foreign trade.
  - Grouped into three segments using predefined thresholds for transactions made in the past two years:
    - large: $500,000 ≤
    - medium: < $100,000 ≤ $500,000
    - small: $0 ≤ $100,000
  - Expectation: large segment has lowest number of operators and highest proportion of total trade; small segment has largest number of operators and lowest proportion of total trade.
- Step 2. Development of a GRI:
  - Define a set of indicators to identify potential or real irregularities.
  - Indicator categories: (1) risk variables related to transactions, (2) customs records, (3) tax records, (4) cross-checking data between tax and customs administrations.
  - Table 2 provides examples of indicators (preserved terminology: HS code, ISIC, VAT).
- Step 3. Conversion to binary variables:
  - Convert indicator results to “0” when they show no risk (“NO”) or “1” when they show risk (“YES”).
  - Example indicator: “Importer imports goods subject to value-added tax (VAT) and pays it at customs but files a larger amount of VAT on imports in tax returns” → results turned into “1” if true, otherwise “0”.
- Step 4. Assign weight to each indicator:
  - Weighting techniques:
    1. distribute weight equally among total number of indicators;
    2. assign according to experience of customs officials;
    3. select frequency of inconsistencies based on a subsample of operators who have committed irregularities (weights assigned according to number of inconsistencies in each indicator);
    4. use software that identifies importance of indicators.
  - When using technique “(3) Frequency of inconsistencies”:
    - Create subsample of noncompliant operators; each operator gets “1” for each indicator with an inconsistency; sum “1s” per indicator to get totals A, B, ..., Z; total ## = A + B + (...) + Z.
    - Weights = A/##, B/##, C/##, Z/##.
    - Define a tolerance threshold; indicators with i/## > tolerance threshold are selected for GRI calculation.
  - Table 3 format preserved: TIN, Indicator 1, Indicator 2, (...), Indicator N, Total; Tot al ABCZ ## = A + B + (...) + Z; A/## B/## C/## Z/##.
- Step 5. GRI calculation:
  - GRI formula provided:
    - GRI = ∑_{i=1}^{n} P_i R_i
      - P_i = Weight assigned to indicator i
      - R_i = Answer obtained by the indicator
      - n = Total of indicators
  - GRI comprises relevant indicators and assigned weights; formula must be applied to all operators to identify each operator’s risk level.
  - Depending on maturity, analytical software or artificial intelligence may be used.
- Step 6. Definition of risk thresholds (risk tolerance):
  - Each customs administration defines thresholds for low-, medium-, and high-risk bars according to its specific risks and challenges.
  - Distribution of GRIs helps set values for the bars; bars can be raised or lowered to calibrate effectiveness of treatment measures.

### Treatments, prioritization, and examples by segment
- Treatments are defined per segment (large, medium, small) and by risk level (High, Medium, Low). Examples included in figure:
  - High risk / Large operators:
    - High number of examinations
    - Comprehensive audits
    - Suspension of benefits and special programs
    - Criminal procedures
  - Medium risk / Large operators:
    - More examinations
    - Focused audits
    - Customized meeting
  - Low risk / Large operators:
    - Sporadic examinations
    - Training plan
    - Personalized service
    - Deferred payments
    - AEO or trusted traders programs
- Treatment types listed: Corrective, Dissuasive, Informative/Facilitative Approach.
- Core process risk areas listed: Valuation, Incorrect country of origin, Misclassification, Prohibited/Restricted goods, Exemptions/Suspensions, Intellectual property rights, Smuggling, Fiscal benefits abuses.

### Indicators and examples to measure compliance
- Examples of indicators for GRI development (Table 2 categories preserved):
  - Risk variables related to transactions:
    - High percentage of transactions conducted through high-risk (noncompliant) customs brokers.
    - High percentage of transactions include risky HS codes.
    - High percentage of transactions originate in countries considered of risk.
    - High proportion of serious violations detected in its transactions.
    - Growing percentage of transactions involving exemptions.
    - Growing percentage of transactions involving residual HS codes.
    - Repeat offenders.
  - Customs records:
    - High proportion of serious violations detected in its transactions.
    - Growing percentage of transactions involving exemptions.
    - Residual HS codes usage, repeat offenders.
  - Operator’s tax records:
    - Taxpayer not filing tax returns.
    - Irregularities found in audits conducted on the taxpayer’s records.
    - Taxpayer found manipulating transfer prices in transactions with foreign traders.
    - Repeat offenders.
  - Cross-checking data between tax and customs administrations:
    - Importer files different VAT on imports than the VAT paid at customs.
    - Importer files different values of imports and exports than the values declared to customs.
    - Importer files different excise than the excise paid to customs.
    - ISIC codes used by the importer do not match HS codes.

### Adaptation, sensitivity, and expected outcomes
- Operators’ segmentation can be adapted to administration needs (e.g., focus on importers trading certain sensitive goods or using special regimes).
- Sensitive goods defined by characteristics (susceptible to misclassification because of VAT/duty exemptions, value adjustments/reassessments, nontariff regulations or restrictions, selected by experts or lab analysis) and examples given: chemical products, electronics, medicines, steel, fuels, textiles, apparel, and footwear.
- Linking sensitive HS codes with operators and, depending on GRI, defining treatments and expanding analysis to identify links between importers, customs brokers, suppliers, etc.
- Expected outcomes of initial segmentation (Table 4):
  1. A new element to help fine-tune the cargo selectivity module for imports, exports, and transits.
  2. A criterion of the operator’s risk profile for the AEO certification process.
  3. A key input for annual post-clearance audit planning.

*Source: Authors.*

### 4. A component when studying fraud

### 4. A component when studying fraud

### Segmentation and Global Risk Index (GRI)
- Segmentation can become more sophisticated by incorporating:
  - (1) repeat offenders;
  - (2) number of operators who have not been subject to customs control; and
  - (3) tax collection, disaggregated by type of tax.
- Example segmentation table structure (preserve source tokens exactly):
  - Operators’ GRI Level / No. of Operators / Total Operators (%) / Value of Transactions (USD) / Total Value of Transactions (%)
    - Large#%$%
      - High#%$%
      - Medium#%$%
      - Low#%$%
    - Medium#%$%
      - High#%$%
      - Medium#%$%
      - Low#%$%
    - Small#%$%
      - High#%$%
      - Medium#%$%
      - Low#%$%
    - Tot al#%$% 
- Extended segmentation including tax and control indicators (preserve tokens exactly):
  - Operators’ GRI Level / No. of Operators / Total Operators (%) / Value of Transactions (USD) / Total Value of Transactions (%) / VAT (USD) / Duty / Excise (USD) / Repeat Offenders / Operators Without Control
    - Large#%$%$$$##
    - High#%$%$$$##
    - Medium#%$%$$$##
    - Low#%$%$$$##
    - Medium#%$%$$$##
    - High#%$%$$$##
    - Medium#%$%$$$##
    - Low#%$%$$$##
    - Small#%$%$$$##
    - High#%$%$$$##
    - Medium#%$%$$$##
    - Low#%$%$$$##
    - Tot al#%$%$$$##
- Notes:
  - AEO = authorized economic operator; GRI = global risk index; VAT = value-added tax.
  - For a more detailed description on developing a sensitive goods linkage with high-risk operators, consult Chapter 5, Appendix G, in Pérez Azcárraga and others (2022).

### Linking compliance risks, GRI, and operator behavior
- Use GRI by type of compliance risk:
  - Design a GRI for each type of compliance risk with different indicators and weights.
  - Identify operators without historical offenses but who may be prone to commit specific risks.
- Sampling and comparison:
  - Extract samples of noncompliant importers and exporters for each compliance risk based on segmentation (size, risk level, type of compliance risk).
  - Identify repeat offenders and prioritize them by adding a recurrence indicator to segregate persistent offenders from those who modified behavior.
  - Compare treated groups (those selected for a treatment) and control groups (those under regular control) to measure treatment effects.
- Incorporate analytical tools:
  - Gradually adopt analytical software and technology to automate key indicators and GRI calculations (including mean, median, and standard deviation).
  - Connect new tools to the customs system for simpler updates.
  - As AI tools are incorporated into customs risk-management systems, define new indicators and incorporate new data into analysis.

### Definition of Treatment Measures for Each Segment of Operators
- Customs administrations must determine:
  - (1) what treatments should be implemented;
  - (2) how and when such treatments must be implemented; and
  - (3) who should be responsible for implementation and monitoring.
- Treatments should be tailored by group of operators (from training/services to criminal proceedings).
- Table 6 examples of treatment measures (structure and items preserved exactly):
  - Operators / Educational / Enforcement
    - Low Risk / Corrective Enforcement / Medium Risk / Full Enforcement / High Risk
  - Large Operators
    - Regular Engagement
      - Account management service
      - Advance rulings
      - Personalized information
      - Per-month filing (versus transactional)
      - Very limited examinations at the port of entry/exit
      - Innovative procedures, such as deferred payments and aggregated declarations
    - Enhanced Engagement
      - Briefings on technical criteria
      - Advance rulings
      - Elevated number of examinations at the port of entry/exit
      - Account monitoring
      - PCA (narrowed scope)
      - Negotiated payment arrangements, based on allowed correction thresholds
      - Seizures when exceeding preestablished thresholds
    - Elevated Engagement
      - Higher level of examinations at the port of entry/exit
      - PCA (comprehensive, some of limited scope)
      - Suspension of activities or benefits
      - International information exchange
      - Strengthened legal/judicial strategies/actions
      - Seizures when exceeding preestablished thresholds and in all cases of recurrent offenders
    - One-to-one interventions
  - Medium Operators
    - Periodic Engagement
      - Targeted information products
      - Industry-sector specialist support
      - Pointed reminders
      - Seminars and webinars
      - Reduced examinations at the port of entry/exit
      - Innovative procedures, such as deferred payments and aggregated declarations
    - Enhanced Engagement
      - Elevated number of examinations at the port of entry/exit
      - Targeted outbound notices/calls
      - Engagement with legal representatives
      - Negotiated payment arrangements based on allowed correction thresholds
      - Advance rulings
      - Seizures when exceeding preestablished thresholds
      - PCA (narrowed scope)
    - Elevated Engagement
      - Higher number of examinations at the port of entry/exit
      - PCA (specific issues, some comprehensive)
      - Suspension of activities
      - Seizures when exceeding preestablished thresholds and in all cases of recurrent offenders
    - One-to-several interventions
  - Small Operators
    - No Touch
      - General information products
      - General reminders/alerts
      - General call center support—chatbot
      - Social media engagement
      - Reduced examinations at the port of entry/exit
      - Innovative procedures, such as deferred payments and simplified declarations
    - Light Touch
      - Increased number of examinations at the port of entry/exit
      - Advisory visits/meetings
      - Letters/notices
      - Automatic payment arrangements
      - Advance rulings
      - Seizures when exceeding preestablished thresholds
    - Elevated Engagement
      - Higher number of examinations at the port of entry/exit
      - Default assessments
      - Suspension of activities
      - PCA (specific issues, narrow scope)
      - Seizures when exceeding preestablished thresholds and in all cases of recurrent offenders
    - One-to-many interventions
- Notes from table:
  - PCA = post-clearance audit.
  - One-to-one interventions: apply to a single operator, high customization, significant administrative costs.
  - One-to-several interventions: designed to apply to an industry sector or larger groups linked by risk type or goods.
  - One-to-many interventions: designed once and applied to a large number of operators.

### Identification and Assessment of Vulnerabilities Within Core Customs Processes
- Risk categories:
  - Institutional risks: structural deficiencies impeding customs effectiveness (weak legal framework, inefficient/ineffective processes, insufficient information, antiquated IT systems, inadequate infrastructure, limited human resources).
  - Compliance risks: operational risks arising prior, during, and after goods release (under- and overvaluation, misclassification, falsification of origin, smuggling).
- Assessment focus:
  - Identify root causes within core processes that lead to compliance risks.
  - Assess core processes for vulnerabilities prior, during, and after goods clearance, and capacities for end-to-end cargo traceability.
  - Structural elements to assess:
    - (1) legal framework;
    - (2) processes;
    - (3) information;
    - (4) IT systems;
    - (5) infrastructure; and
    - (6) human resources.
- Systematic evaluation methodology should link each compliance risk to institutional vulnerabilities and identify for each:
  - (1) probability of occurrence based on number of time periods present (quarters, years);
  - (2) effect (high, medium, low) based on indicators and experts’ opinion;
  - (3) prioritization based on expected effect and strategic need;
  - (4) treatment;
  - (5) period/completion;
  - (6) responsible unit; and
  - (7) indicators to measure treatment effectiveness.
- Table 7 structure for identification and treatment of root causes (preserve tokens exactly):
  - Limitation/Vulnerability / Institutional Risk / Compliance Risk / Effect / Probability / Prioritization / Treatment / Responsible Unit / Expected Completion / Indicator
    - Limitation 1 / Legal framework / Valuation / Effect 1 / Effect 2 / Medium / High / Measure 1 / Measure 2 / Legal / Date / Indicator 1 / Indicator 2
    - Limitation 2 / IT systems / Valuation / Effect 1 / Low / Medium / Measure 1 / Measure 2 / IT / Date / Indicator 1 / Indicator 2
    - Vulnerability 1 / Processes / Valuation / Effect 1 / Effect 2 / High / High / Measure 1 / Measure 2 / PCA / Date / Indicator 1 / Indicator 2
  - Note: IT = information technology; PCA = post-clearance audit.

### Narrowing a CIP to Address a Specific Compliance Risk
- A CIP can be focused on a specific compliance risk:
  - Analysis limited to operators trading goods most sensitive to the selected risk (e.g., undervaluation, misclassification, circumvention of origin).
  - For undervaluation:
    - (1) segmentation focuses on operators trading goods identified as most sensitive to undervaluation;
    - (2) expert team identifies vulnerabilities within core processes that allow undervaluation to persist.
- Treatments and indicators:
  - Define treatments for each segment according to risk levels and for correcting institutional vulnerabilities.
  - Determine how, by whom, and when treatments are applied, and define indicators to monitor progress.
- Practical implementation:
  - Implementing a suite of risk-specific CIPs sequentially may be practical given resource constraints.
  - Risk-specific CIPs can deliver early, prioritized results even when holistic CIP development is long-term and costly.
  - Annex 3 provides templates to facilitate developing a CIP focused on a specific compliance risk.

### Measuring Progress in Compliance Improvement
- CIP evaluation objectives:
  - Determine whether treatment measures improve customs compliance.
  - Continuously monitor compliance improvement and execution progress of each treatment.
- Examples of indicators by level (Box 2 preserved exactly):
  - Strategic level
    - Variation (increase or decrease) of the CIF value in imports for domestic consumption relative to total customs collection (per tax—VAT, excise—or HS code).
    - Level of customs collection relative to the variation (growth or reduction) of international trade.
    - Trends in average release times by each mode of transport.
    - Improvement in the foreign trade operator’s perception of the customs administration.
  - Tactical level
    - Proportion of the number of transactions and the value of imports/exports carried out by Authorized Economic Operators and Trusted Traders program participants.
    - Evolution in the percentage of import/export declarations processed through each selectivity channel.
    - Assertiveness rate of the selectivity criteria.
    - Evolution in the assertiveness rate of the selectivity criteria.
    - Assertiveness rate of post-clearance audits.
    - Evolution in the assertiveness rate of post-clearance audits.
    - Repeat offenders’ performance (number of cases detected). It measures the increase or decrease in the number of repeat offenders through several periods of time.
    - Repeat offenders’ performance ($). It measures the increase or decrease in the value of offenses committed by repeat offenders through several periods of time.
    - Repeat offenders who have improved behavior. It measures the number of operators who having been repeat offenders have modified their behavior and become compliant.
    - Number of customs advance rulings issued, per type/coverage, and percentage with respect to all declarations.
    - Proportion of non-tariff authorizations issued through the single-window system compared with the total authorizations issued through all means.
    - Indicators can be refined by focusing on a specific type of compliance risk, tax, excise, or sensitive goods (HS codes).
  - Operational level
    - Compliance Risk / Number of Cases Detected / Periodical Variation Rate / Amount Reassessed / Periodical Variation Rate / Amount Collected / Periodical Variation Rate
      - 1. Misclassification
      - 2. Valuation
      - 3. Undeclared goods
      - 4. Origin
      - 5. Abuse of special regimes or exemption programs
- Additional measurement:
  - Use surveys of foreign trade operators to measure trust and community confidence and track perception changes over time.

### The Importance of Effective and Practical Governance (Risk-Management Committee)
- Governance fundamentals:
  - Strong governance underpins design, implementation, and monitoring of CIPs.
  - Governance promotes sound evidence-based decision making and addresses managerial weaknesses and corruption risks.
  - Without rigorous governance and follow-up, CIPs become outdated and ineffective.
- Role of Risk-Management Committee (RMC):
  - RMC is a critical component for effective governance, contributing to planning, execution, monitoring, and timely decision making for CIP improvement.
  - RMC should ensure integration and coordination among core customs functions and adopt a wide view of risk beyond selectivity criteria analysis.
  - RMC objectives include facilitating compliance for willing operators and modifying behavior of noncompliant operators.
- Institutionalization and composition:
  - RMC should be institutionalized and multidisciplinary.
  - Senior managers and full support of the Head of Customs are critical.
  - Head of Customs must appoint a senior manager to lead and coordinate.
  - RMC must have clear terms of reference: defined roles and responsibilities, meeting frequency, agendas, protocols.
  - All decisions must be documented and followed up.

*Source: Authors based on Pérez Azcárraga and others (2022).*

### Annex 4 shows some suggested guidelines to be considered when creating an RMC and defining its role.

### tnmea2025002 - Annex 4 shows some suggested guidelines to be considered when creating an RMC and defining its role.

### Role of RMC and customs risk subcommittee
- Establishing a customs risk subcommittee is essential for customs administrations when they operate under an integrated revenue administration.  
- The customs risk subcommittee should directly report to the RMC overseeing the corporate risk management strategy.

### Other critical elements to consider when developing and implementing a CIP (based on an IRM approach)
- Political support and senior management involvement
  - Senior managers must be strongly involved from the CIP’s inception to lead implementation and monitoring, to take timely actions for continuous improvement, and to distinguish the urgent from the strategic.
- Change management strategy
  - Organizational culture drives employee behavior and decision-making; a shift from enforcement-driven approaches to a broader risk-management approach is required.
  - CIP development and implementation will face internal resistance and must be accompanied by a change facilitation strategy across all ranks.
  - Staff training (for new technologies) and clarity on how staff contribute to CIP success are necessary.
- Communication strategy
  - Internal objective: ensure customs staff understand and embrace the CIP.
  - External objective: publish key CIP elements so operators perceive it as facilitating trade and leveling the playing field.
  - Required tools: production of materials (including online information and guidelines), workshops, and webinars.
- Holistic approach to trade facilitation
  - Trade facilitation should be designed holistically across the supply chain (registration to goods release) to make compliance easier and less costly than noncompliance.
  - Effective risk management reduces examinations at clearance; single-window systems reduce data filing requirements; trader training and uniform procedures induce compliance.
- Updated customs law, clear regulations, and a sanctioning framework
  - Regulatory framework should be aligned with international instruments and good practices and allow fully automated procedures.
  - Statutes and regulations should facilitate compliance and avoid misinterpretations and diverse application criteria.
  - Sanctions must deter noncompliance, be proportionate to offenses, and escalate for repeat offenders up to suspension/cancellation of operations and criminal prosecutions.
  - Operators must observe that breaches are sanctioned accordingly; unresolved legal/sanctioning issues hinder compliance improvement.
- Invest in the Post-Clearance Audit (PCA) function
  - PCA is an effective deterrent and educational tool when correctly applied; it addresses issues not resolvable at clearance (e.g., valuation, special regimes).
  - PCA enriched with investigations improves assertiveness and effectiveness.
  - Lack of a solid audit program is perceived as a weakness; PCA requires a strategic approach based on operator segmentation to modify behavior.
  - PCA remains at an early stage in many administrations, limiting its potential.
- Need for a customs-specific CIP even within integrated revenue administrations
  - Customs and tax administrations face different compliance risks, processes, stakeholders, and business models.
  - Joint CIPs can address common risks, but customs must develop CIPs addressing its particular risks in line with its functions and mandates.
- Implementing effective interagency cooperation
  - Cooperation levels and formalization depend on country legal frameworks and structure; may require ministerial/agency-level instruments.
  - Tax–customs cooperation should include:
    - developing a taxpayer/operator risk profile;
    - implementing collaborative actions to improve customs-revenue compliance;
    - avoiding abuse of advantages from special regimes;
    - identifying simulated exports used to claim unsupported tax refunds or launder money.
  - Cooperation with other border-control agencies should follow coordinated border management principles, including:
    - development of data exchange mechanisms and a single-window system to enhance control and facilitate compliance with non-tariff regulations;
    - implementation of operational protocols to avoid duplicative inspections at the border;
    - application of IRM, to the extent possible;
    - joint or coordinated campaigns to encourage compliance.
- Participation of the private sector
  - The private sector can provide critical sectoral and business-model information (producers, suppliers, raw-material and freight costs, unit prices, intellectual property rights) useful to identify atypical cases.
  - Secure and compliant operators’ programs (e.g., Authorized Economic Operator) help customs segregate risks.
- Experience from other customs administrations
  - Several customs administrations have applied the concepts and guidelines in this technical note to improve compliance through their CIP.
  - Depth and sophistication of CIPs depend on access to timely and reliable data.
  - Following the operators’ segmentation methodology, some administrations target noncompliant operators successfully and apply appropriate treatments.
  - Some administrations conduct in-depth core-process reviews to identify root causes and address vulnerabilities; others do targeted reviews.
  - Many are strengthening risk-management units and have created an RMC.

### Data structures, templates, and practical tools (summaries from Annexes)
- Example of importer database (fields grouped)
  - Customs Information: TINRegister; Date; Tot al Import Value 20XX; Tot al VAT Paid 20XX; Tot al Excise 20XX; Tot al Duties 20XX; Total Import Value with Exemptions 20XX; Total Import Value with Trade Agreements 20XX; Tot al Import Value with Residual HS Code; Total Customs Declarations 20XX; Tot al Customs Declarations with Control 20XX; Tot al Customs Offenses 20XX.
  - Revenue Authority Information: TINTa x p aye r Size; VAT 20XX; Domestic Market Sales; Domestic Market Purchases 20XX; International Market Purchases 20XX; Profitability 20XX; Tot al Assets 20XX; Tot al Liability 20XX; Number of Ta x Returns Not Submitted; Number of Audits; Number of Offenses.
  - Relevant considerations:
    - The period should be at least one year.
    - Information may consider a unique regime (final importation) and process (clearance process).
    - Only one currency needs to be selected to convert the variables.
    - Types of taxes could be disaggregated as a preference.
    - Register date describes the first transaction day.
    - Categorization by type of operators (individual, corporation, other documents authorized to operate) could be inserted.
    - Aggregate information per year; if database covers two years, define two columns per variable (e.g., Total Import Value 20X1 and Total Import Value 20X2).
  - CATALOG DATABASES example: Sensitive goods.
  - HS Code Information: HS Code- Number of Declarations with Control- Number of Offenses.
  - Importer vs. HS Code: TIN- HS Code- Total Import Value.

- Templates to identify vulnerabilities, define treatments, and monitor progress (two example methodologies)
  - Example 1: Addressing vulnerability "Insufficient and untimely sea manifest data" across core-process analysis
    - Step 1: Identify vulnerabilities, institutional risks, compliance risks, and estimate effect.
      - Process code entries (as presented):
        - 1.1.1 Insufficient and untimely sea manifest data — Legal framework — Contraband / Origin / Undervaluation — MediumHighHighMedium10
        - 1.1.2 Insufficient and untimely sea manifest data — Procedures — Contraband / Origin / Undervaluation — MediumHighHighMedium10
        - 1.1.3 Insufficient and untimely sea manifest data — IT system — Contraband / Origin / Undervaluation — MediumHighHighMedium10
      - Note: effect categorization uses low (1 point), medium (2 points), high (3 points) across strategic objectives; example total effect = 10 (2+3+3+2=10).
    - Step 2: Determine probability of occurrence and prioritize treatment.
      - Table example entries:
        - 1.1.1 Insufficient and untimely sea manifest data — Legal framework — 10 — YYYY — 4 40 High
        - 1.1.2 … Procedures — 10 — YYYY — 4 40 High
        - 1.1.3 … IT system — 10 — YYYY — 4 40 High
      - Scoring method: count yes (Y) per period as 1 point; multiply occurrence score by expected effect (example: 10 × 4 = 40).
    - Step 3: Select treatments, responsible units, and time frames.
      - Example treatment measures and timelines:
        - 1.1.1 Legal framework treatments:
          1. Amend Section “X” of the customs code to make transmission of sea manifest data mandatory.
          2. Amend Section “X” of the customs code to include sanctions (fines, penalties) to shipping lines that do not transmit the required sea manifest data, completely and on time.
          - Responsible unit: Legal; Supporting units: Risk management, Operations, IT; Expected completion: June 2023; comment: To b e included in the upcoming customs reform package.
        - 1.1.2 Procedures treatments:
          1. Amend Section “X” of the customs operational manual to include procedures for reception, validation, and handling of sea manifest data.
          2. Introduce procedures to reconcile sea manifest data with physical cargo discharge data.
          - Responsible unit: Operations; Supporting units: Risk management, IT, Legal; Expected completion: January 2023.
        - 1.1.3 IT system treatments:
          1. Develop technical solutions to monitor the status of cargo and link it to further processes and declarations.
          - Responsible unit: IT; Supporting units: Risk management, Operations; Expected completion: June 2023.
      - Implementation sequencing note: some measures depend on others (e.g., procedures defined before IT changes and legal drafting).
    - Step 4: Develop indicators to monitor progress.
      - Example indicators and reported values (as presented):
        - Indicator: Number of shipments where sea manifest data were filed electronically in advance (completely and on time) / Total number of shipments arrived.
          - Numerator: 5,478
          - Denominator: 16, 392
          - Result: 33.4%
        - Indicator: Number of shipping lines filing complete and timely sea manifest data in advance / Total number of shipping lines in operation.
          - Numerator: 12
          - Denominator: 43
          - Result: 2 7.9 %.
      - Use of indicators: decide on sanction strengthening, approach noncompliant operators to understand noncompliance causes, correct legal provisions and IT glitches, develop education and technical assistance.
  - Example 2: Addressing valuation compliance risk
    - Step 1: Identify vulnerabilities and estimate effect (selected entries):
      - 1.3.5 Lack of electronic customs value declaration — Legal framework — LowLowHighMedium7
      - 1.3.5 Lack of electronic customs value declaration — IT system — LowLowHighMedium7
      - 3.1.1 Insufficient/weak sanctions to help deter valuation noncompliance — Legal framework — HighLowHighMedium9
    - Treatment measures (examples):
      - For 1.3.5: (1) update legal framework to require importers to file customs value declarations; (2) develop an electronic form for importers to file customs value declarations.
      - For 3.1.1: review and update the sanctioning framework to deter valuation noncompliance.
    - Indicators (examples and goals):
      - Percentage of importers filing electronic customs value declarations — goal set at 100 percent.
      - Percentage of import transactions where electronic customs value declarations were filed — goal set at 100 percent.
      - For sanctions: monitor evolution of proportion of repeat offenders in customs valuation (increase/decrease).

*Source: tnmea2025002 - Annex 4 shows some suggested guidelines to be considered when creating an RMC and defining its role.*

### ANNEX 3. Examples of Templates to

### ANNEX 3. Examples of Templates to Facilitate the Development of a CIP Focused on a Specific Compliance Risk

### Compliance Risk — Undervaluation
- According to customs records on valuation offenses detected during the clearance process and findings derived from PCAs, as well as analyses conducted by the customs valuation and tariff classification units, there are XX HS Codes linked to this risk. During the past fiscal year XX operators imported goods under such tariff items.
- The following indicators allow the administration to establish a baseline to measure compliance among operators conducting transactions involving undervaluation of the selected sensitive goods:
  - Proportion of total transactions and value of imports/exports carried out by AEO and TTP participants.
  - Evolution in percentage of import/export declarations processed through each selectivity channel.
  - Evolution in the assertiveness rate of the selectivity criteria.
  - Evolution in the assertiveness rate of PCAs.
  - Unit price variation analysis for each sensitive HS Code.

### 1. Indicators
- HS CodesCIF
- CIF  
- Periodical 
- VariationVAT
- VAT 
- Periodical 
- Variation
- Customs 
- Duties
- Customs 
- Duties 
- Periodical 
- VariationExcise
- Excise  
- Periodical 
- Variation
- Number of 
- Importers
- Number of Im-
- porters Periodi-
- cal Variation
- X1X X X .X1$%$%$%$%#%
- XXXX.X2$%$%$%$%#%
- XXXX.X3$%$%$%$%#%
- XXXX.X4$%$%$%$%#%
- XXXX.X5$%$%$%$%#%
- (...)$%$%$%$%#%

### 2. Importers’ Segmentation by HS Codes
- HS XX.XX.X1
- No. of  
- Importers
- % vs. Total 
- Number of 
- Importers
- Repeat  
- Offenders
- Repeat 
- Offenders 
- Periodical 
- VariationCIF
- % vs. 
- Total 
- CIFCollection
- % vs. Total 
- Collection
- LargeHigh risk#%#%$%$%
- Medium risk#%#%$%$%#%$%$%
- Low risk#%#%$%$%$%#%
- MediumHigh risk#%#%$%$%#
- Medium risk#%#%$%$%#
- Low risk#%#%$%$%#
- SmallHigh risk#%#%$%$%#
- Medium risk#%#%$%$%#
- Low risk#%#%$%$%#

### 3. Treatment Measures at Operational Level
- HS XX.XX.
- X1XXXX.X1High RiskMedium RiskLow Risk
- Large
  - PCA (on-site)
  - Apply selectivity criteria to increase percentage of document/physical examinations at clearance
  - Letters/notices inviting operator to correct and comply
  - Eligible for AEO or TTP
  - Eligible to file monthly declarations and payments
  - Simplified declarations
  - Apply selectivity criteria to decrease percentage of documents/physical examinations at clearance
- Medium
  - PCA (documentary at PCA unit offices)
  - Letters/notices inviting operator to correct and comply
  - Communication strategy designed to deter noncompliance in matters of valuation
  - Eligible to file monthly declarations and payments
  - Eligible to participate and contribute in customs workshops aimed at improving compliance
- Small
  - Communication strategy designed to deter noncompliance in matters of valuation
  - Apply selectivity criteria to increase percentage of documents/physical examinations at clearance
  - Increased registration requirements
  - Moderate cargo selectivity criteria
  - Apply selectivity criteria to decrease percentage of documents/physical examinations at clearance

### 4. Vulnerabilities and Treatment Measures at Institutional Level
- Vulnerabilities
- Institutional 
- Risk
- Compliance 
- RiskEffectProbability
- Prioritiza-
- tionTreatment
- Responsi-
- ble Unit
- Expected 
- Comple-
- tionIndicator
- Vulnerability 1
  - Legal framework
  - Valuation
  - Effect 1
  - Effect 2
  - MediumHigh
  - Measure 1
  - Measure 2
  - LegalDate
  - Indicator 1
  - Indicator 2
- Vulnerability 2
  - IT systems
  - Valuation
  - Effect 1LowMedium
  - Measure 1
  - Measure 2
  - ITDate
  - Indicator 1
  - Indicator 2
- Vulnerability n
  - Processes
  - Valuation
  - Effect 1
  - Effect 2
  - HighHigh
  - Measure 1
  - Measure 2
  - PCADate
  - Indicator 1
  - Indicator 2

- Note: AEO = authorized economic operator; CIF = cost, insurance, and freight; HS code = Harmonization System code; IT = information technology; PCA = post-clearance audit; TTP = trusted trader program; VAT = value-added tax.

*Source: Authors.*

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_Source: https://www.imf.org/-/media/files/publications/tnm/2025/english/tnmea2025002.pdf_