Trade Compliance Glossary

Pre-Border Trade Readiness

Also: PBR · Pre-Border Readiness

The practice of validating shipment documentation for completeness, consistency, and evidence quality before it reaches a broker or a customs authority.

Pre-Border Trade Readiness (PBR) shifts customs compliance upstream: instead of catching errors at the port — where they cost four to eight hours of broker rework plus penalty exposure — PBR validates classification, valuation, origin, and recordkeeping at the shipper's desk, before filing. PBR is not customs filing. It produces an evidence-complete readiness packet for a licensed broker to review and file under their own authority. The practice exists because regulatory authority (who can file) and data quality (what gets filed) are structurally separate problems that trade software has historically conflated.

Peregon Score

A composite readiness score (0–100) that grades how defensible a shipment's documentation is before it reaches a customs authority.

The Peregon Score evaluates classification defensibility, valuation support, origin evidence, and recordkeeping continuity on a 0–100 scale. Band thresholds: Peregon Verified (90–100), Verified with Flags (70–89), Below Threshold (50–69), Not Ready (<50). The score is advisory — it surfaces gaps for human review but never makes binding determinations. A broker still files the entry; the score tells the broker which shipments are ready to file and which need remediation first.

Focused Assessment

Also: FA · CBP Focused Assessment

US Customs and Border Protection's comprehensive audit program for importers, evaluating classification, valuation, origin, and recordkeeping over a five-year look-back window.

A CBP Focused Assessment is a two-phase audit: the Pre-Assessment Survey (PAS) evaluates the importer's internal controls, then Assessment Compliance Testing (ACT) pulls transaction samples against the four audit dimensions. CBP's statutory authority lets auditors review entries going back five years, which is why upstream evidence must be retained continuously — reconstructing documentation after the fact rarely survives scrutiny. Focused Assessments disproportionately target high-volume importers, but any importer with documentation gaps is exposed.

Pre-Assessment Survey

Also: PAS

The first phase of a CBP Focused Assessment, in which CBP reviews an importer's internal controls before deciding whether to escalate to a full audit.

The Pre-Assessment Survey is where CBP decides whether to proceed with a full Assessment Compliance Testing phase or close out with a compliance improvement plan. Auditors examine written procedures, staff training records, recordkeeping systems, and the importer's process for classification and valuation. Weak internal controls at PAS almost always trigger escalation, even when transaction data looks clean. The lesson: CBP audits the process before it audits the transactions.

Assessment Compliance Testing

Also: ACT

The second phase of a CBP Focused Assessment, in which CBP tests a sample of transactions against classification, valuation, origin, and recordkeeping standards.

Assessment Compliance Testing is transaction-level. CBP pulls samples from the importer's entries across the five-year look-back window and tests each against the four audit dimensions. Findings at ACT convert directly into penalty exposure and can trigger prior-disclosure negotiations. The sample size scales with risk — importers who failed the Pre-Assessment Survey face larger samples and narrower tolerances.

CBP Five-Year Look-Back

CBP's statutory authority to review import entries going back five years during a Focused Assessment.

Under 19 USC §1592 and §1641, CBP can review entries filed within the five years preceding an audit. This window is the reason upstream evidence must be retained continuously rather than reconstructed at filing time — documents assembled after an audit notice arrives rarely demonstrate the consistency that reasonable care requires. The five-year window also shapes penalty calculations: violations spanning multiple years compound quickly, and a single systemic classification error can become a six-figure liability.

Reasonable Care

The statutory duty under 19 USC §1484 for importers to use reasonable care when classifying, valuing, and declaring goods to CBP.

Reasonable care is not a fixed checklist — it is a defensibility standard. Importers must demonstrate that they took appropriate steps to classify goods correctly, value them accurately, and document origin claims. CBP evaluates reasonable care based on the importer's internal controls, use of qualified expertise (customs brokers, consultants), and the quality of supporting evidence. Peregon's continuous-evidence architecture is designed specifically to satisfy this standard: every classification and valuation decision carries a timestamped audit trail with the reasoning, sources, and reviewer that supported it.

CARM R2

Also: CARM Release 2 · CBSA CARM

Release 2 of CBSA's Assessment and Revenue Management system — fully enforced since January 2026 — which shifts financial liability to the importer of record and requires posted financial security.

CARM (Assessment and Revenue Management) is the Canada Border Services Agency's modernization program. Release 2 is the phase that matters for compliance: it makes the importer of record directly liable for duties, taxes, and penalties — a shift from the broker-centric model that preceded it. Importers must register in the CARM Client Portal, post financial security, and file Commercial Accounting Declarations (CADs) on their own account. As of early 2026, 86% of Canadian importers were not fully CARM-compliant, creating significant penalty exposure for the first full audit cycle.

Truth vs Authority

Peregon's architectural principle that advisory interpretations (truth) and enforceable actions (authority) never share a write path.

Peregon separates two concerns that trade software usually conflates. The Truth Layer — called AEO, for Answer Engine Optimization — produces advisory interpretations with confidence scoring: classification suggestions, valuation checks, origin evidence review. The Authority Layer — Orchestration — enforces RBAC, approvals, and broker license verification. The two layers never share a write path, which means advisory output cannot cross into filing authority even through a bug or a compromised service. When AEO truth and human authority disagree, the disagreement is recorded as a Conflict Record — the disagreement itself is evidence, not an error.

Broker-Safe Boundary

The architectural invariant that no code path in Peregon files entries, transmits to government systems, stores broker credentials, or makes binding determinations.

The broker-safe boundary is enforced in code, not policy. Peregon has no ACE or ABI submission endpoint, stores no broker credentials, and contains no code path that would let the system file on a broker's behalf even if a bug tried to. Brokers keep their license surface entirely to themselves; Peregon is structurally incapable of taking it from them. This is the #1 trust signal with broker customers — because regulatory authority is the license a broker cannot afford to lose, the only trustworthy guarantee is one that holds even if the software is compromised.

USMCA

Also: United States-Mexico-Canada Agreement

The trilateral free trade agreement governing North American trade, which sets origin rules importers must document to claim preferential duty rates.

USMCA replaced NAFTA in July 2020 and governs tariff treatment across US-Mexico-Canada trade. To claim USMCA preferential rates, importers must prove the goods qualify under Rules of Origin — typically through regional value content, tariff shift, or producer certification. Origin claims are one of the most-audited dimensions in a CBP Focused Assessment because they are the easiest to get wrong and the most expensive to unwind. A denied USMCA claim converts to Most Favored Nation (MFN) duty rates retroactively, often with penalties on top.