Recordkeeping may not be the most exciting part of trade compliance, but GTC instructor Arthur O’Meara has one word for what happens when companies get it wrong: draconian. On this episode of Simply Trade Tips, host Lalo Solorzano and Arthur tackle an often-overlooked part of import compliance: keeping the records you may need when Customs comes asking.
The A1A List Isn’t as Scary as It Looks
The A1A recordkeeping list can seem intimidating at first glance. However, compliance doesn’t mean copying every document into one massive entry file. Instead, companies should understand which records actually apply to their transactions, know exactly where those records are maintained, and periodically verify that they remain accessible.
You Don’t Have to Duplicate Everything
Using purchase orders as an example, Arthur explains that a document doesn’t need to live in a centralized file if you know where it’s kept, such as within purchasing or procurement. The real question isn’t where a record sits. It’s whether the company can produce it when CBP asks.
When the Form 28 Shows Up
Arthur also walks through what happens when CBP sends a Form 28 Request for Information. At that point, a trade compliance professional may need to track down marketing literature, transaction documentation, or other records fast, all while working against a response deadline. His advice: review your recordkeeping practices before that request ever lands, not after.
Make It an Annual Goal
Between tariffs, classification changes, and other urgent fires, routine compliance tasks can slip down the priority list. Arthur’s fix is simple: build recordkeeping into your annual compliance goals. It doesn’t take much time, but it can protect the company when it matters most.
Ready to Go Deeper?
Want to shore up your organization’s recordkeeping practices? Explore GTC’s Import Compliance Training to build a stronger foundation across documentation, Customs requirements, and your team’s compliance responsibilities.
Transcript
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Lalo (00:06)
And we’re back here for another episode of the series with Arthur O’Meara on our complete trade tips. And we have so far talked about a couple of things. We’ve talked about Inco terms, we’ve talked about
Arthur (00:19)
Mm-hmm.
Lalo (00:20)
tariff classification, the importance of tariff classification. and in all that, I guess you’re you’re running paperwork, you’re processing documentation, you’re sending things back and forth and everything. So
You told me that you may want to touch on record keeping ’cause all of that involves some form or one way or another of record keeping.
Arthur (00:40)
Absolutely. So first of all, thank you, Lalo, for having me back. Always a pleasure. Let’s talk about record keeping. And then the thing with record keeping is this. I’m gonna teach you a new word, draconian. Draconian. That’s
Lalo (00:57)
Ha ha ha.
Arthur (00:58)
what the penalties are for record keeping. Record keeping is one of those things where it’s just so easy to get it right.
And the penalties are just so high and steep and painful for getting it wrong that there really is no excuse. So so most people say, no, record keeping, here’s this A1A list. And it’s got hundreds and hundreds and hundreds of entries on the A1A list. Like, I need a sugar form, or I need a declaration for collector’s art, or I need a US Coast Guard certification. No, you don’t. Most of what’s on the A1A list you can ignore. The A1A list is the anyway, we’ll talk about a
elsewhere. But the just Google A1A list record keeping and it pops right up and it’s quite intimidating. Okay, it’s quite intimidating. And and the biggest mistake I think people make, well, besides not taking care of the record keeping, is thinking, my God, look at all these things. I need to I need to make photocopies of all of these and put these in the file with my entry documents. And guess what? No you don’t. No you don’t. You don’t need to do that. You don’t need to gather all these documents and put them together. Instead
It’s just a good idea to make a list of the documents that you were going to copy and just on that list write who has them. So the best example is the purchase order. Yeah, you need a copy of the purchase order. No, you don’t need to make a copy of the purchase order and put it with your entry documents. Instead, write purchase orders are kept by the purchasing or procurement department, and you’re done. And then every once in a while you go back to purchasing and say, Hey, you guys still keeping the purchase order? So I’m Yeah, we are. And you said, okay, I’m good.
And you’ve just met your record keeping requirement. Okay. So one of the reasons that I say that the penalties are so high, let’s think about this for a minute. Let’s think about the philosophy behind easy to get it right, extraordinarily painful if you get it wrong. If customs comes and asks questions and wants to look at your records, remember you’re going to be audited against your own records.
If Customs asks you to produce records from this transaction or that transaction, and you cannot, the presumption is that you’re hiding something. Guilty until proven innocent. All right. Why? Because it’s just, well, there’s two reasons. It’s just so easy to get it right that if you’re getting it wrong, you must be getting it wrong on purpose, or you’re an idiot. And number two, US Customs is not the only federal agency telling you to keep these records.
IRS does as well. For some people, it’s the FDA, all right? Or FCC, okay? And and you know, or USDA. So we have multiple government agencies whose recordkeeping requirements don’t exactly, but really mostly overlap. And if customs comes in and says, I want to see the documents for this import from March of 2024, and you can’t produce anything, that it kind of begs the question, why? You know, it it it it says, well.
Gosh, if you can’t produce it for customs, are you not going to be able to produce it for the IRS? And I guarantee you the tax department is all over there. Sort of like, I can get you anything that you need, I can pull it up in 10 minutes. Right. So if you can’t satisfy a recordkeeping request from customs, the presumption is that you’ve deleted them or you’re hiding them because you have something to hide. And that’s why the penalties are so draconian.
Lalo (04:29)
And do you feel that this is probably something that folks may be let’s just talk about, you know, the recent administration, right? I mean they they on April second, twenty twenty five, all of a sudden they threw these Liberation Day tariffs and everything, right? I mean, all of a sudden everybody was scrambling, right? I mean, then we hear since then we’ve heard several
occasions on on the Friday Friday surprise, you know, tariff surprise, right? You know, we we we keep on hearing stuff like that, right? And they’re you again, you’re scrambling because by by Monday, now you need to be in compliance with now it’s something different and all that. And regardless of all of that, you know, like it or hate it or anything like that, the pro the the the fact is that trade professionals are a lot more busy now. d do you feel in your experience for what you have been seeing
with your clients or or even students that that attend you know the courses. Do you feel like they may be like neglecting that a little bit because they’re too busy doing other stuff?
Arthur (05:37)
Sure, and and and that’s a problem, okay, because it really hasn’t been a requirement because people in trade compliance are always being pushed to look at tariff classification because of e exactly what you said, these these Friday surprises. So everyone’s been doing tariff, tariff, tariff, tariff, and you can only juggle so many balls, right? And and eventually if an importer gets a C of twenty eight, a request for information.
Says, dear importer, please provide marketing and literature and please provide this and please provide that. And all of a sudden the poor, overworked, underpaid, trade compliance person is like, Well, this is something new. And I’ve got 30 days or sometimes 20 days to respond. that’s then they get the attention of the company. And and at that point, in my opinion, you know, it’s too late because customs already, you know, has been looking at you for a while. When they send you a a 28, a C of twenty-eight.
It isn’t because I I’m just gonna send this to this client today. No, they’ve looked at your website, they’ve looked at your paperwork, they probably know your paperwork better than you do, and so that’s not a good sign.
Lalo (06:49)
Yeah. It’s like they say, the FBA doesn’t ask you questions to get information. It’s because they already know what’s happening, right? And CBP
Arthur (06:55)
Yes. Absolutely right. Mm-hmm.
Lalo (06:59)
P. Great. Okay, Arthur. Well, how do you want to wrap this one up? Any quick takeaway or or tip on re record keeping other than you’ve don’t don’t forget to do it.
Arthur (07:10)
Don’t forget to do it. I would say add make sure that you can add it to your annual goals. Right?
Lalo (07:16)
Mm-hmm.
Arthur (07:17)
Add it to your tell your boss, hey man, I want to make this part of my annual goals or goals. And it it doesn’t have to take a lot of time. But all I want to do is check our record keeping list, make sure everything is in place, make sure I can look at everything pretty quickly. It’s an easy win. You can get it done quickly, and it helps protect the company, helps protect.
Lalo (07:38)
Awesome. Well, good tips there. Thank you, Arthur. And we’ll
Arthur (07:41)
Thank you, Long.
Lalo (07:42)
hit you up on the last episode for the series and you you all have a good week, rest of your week, and we’ll we’ll catch you at a at the next episode. Thank you.
Arthur (07:54)
Okay. Bye.
Lalo (07:55)
Bye.
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