Many companies are aware of the financial risks involved in trade compliance management due to the increased enforcement activity of Customs and Border Protection (CBP) as authorized under the Trade Facilitation and Trade Enforcement Act. Some have even made efforts to answer the call by implementing global trade compliance risk departments in their organizations.
The Modernization Act of 1993 defined specific reasonable care standards as seeking the advice of “industry experts” such as a licensed customs broker, customs consultant or customs attorney specializing in Customs law. An example of reasonable care found in many organizational areas is the concept of a “second set of eyes” that reviews, audits and completes compliance assessment determinations on the practices in place.
However, I come across many instances in which a second set of eyes within a company’s compliance management process does not meet the satisfactory definition of reasonable care, because they lack industry expertise to identify the depth of error, culpability or adequate financial risk. Equally as troubling, some companies outsource the checking responsibility to a third party entity that assigns these critical tasks to junior individuals with limited knowledge of Customs Rules and Regulations.
Importers and exporters can ill afford to gamble on compliance management results. The stakes are much too high. We must scrutinize every detail to avoid potentially crippling penalties and negative press that impacts public perception of the brand.
CBP enforcement representatives have received mandatory compliance enforcement training to identify operational risk factors leading to increased fines and penalties. Has your second set of eyes prepared to ensure that your company is offsetting such efforts through proactive risk assessments, HTS line reviews, valuation verifications, Free Trade Agreement affirmations, ADA/CVD investigation determinations, social compliance verifications and foreign factory visits?
The reliance on the efficiency of your second set of eyes breeds a tremendous responsibility. It is the defense strategy that is boasted in many situations when descriptions are presented on trade compliance management. You must test that second set of eyes like a trucker tests his/her braking system. Ensure that they work when you need them, so that you are ready for the unexpected.
An in-depth assessment of your international trade compliance procedures by seasoned Transportation Insight experts can be a key component in a broader Enterprise Logistics Solution that mitigates financial risk, drives out non-value-added costs and transforms the end-to-end supply chain into a strategic competitive advantage.