Trade Compliance Best Practices

In my 35+ year career in Customs Brokerage and International Trade, I’ve pretty much seen it all. I’ve worked for Customs Brokers, 3PL’s and Importers, which gives me a unique perspective on the subject.  Of course, I’ve always been keenly aware of the importance of Trade Compliance, but with what has been happening lately concerning global tariffs, Trade Compliance is now taking center stage in today’s news. Below are what I’ve identified as 5 areas an importer/exporter should examine with regard to Trade Compliance. It isn’t an all-inclusive list, but if an organization can do their best to address these 5 areas, it will go a long way toward building and maintaining a robust Trade Compliance program.

1. Support and engagement from senior management. I’ve got this at #1 because in my opinion it is the most important step an organization can take to achieve Trade Compliance. Without buy-in and engagement from senior management, including top level officials such as President or CEO, trade compliance will never garner the attention, and more importantly the resources, that it rightfully deserves. If the top brass wants something done, it usually gets done. Senior management engagement also generates support from the rank and file. Along with the “Top down” effect that comes with senior management support, a “bottom up” engagement effect is also created. It’s all about people, and when the people at the top don’t support something, the people at the bottom won’t support it either.
2. Documented Procedures. If an organization is looking to achieve and maintain a robust Trade Compliance program, procedures are a must. Well documented procedures provide direction, clarity and reasoning with regard to required Trade Compliance operational tasks and data maintenance. As anyone who’s gone through a Focused Assessment will tell you, one of the first things CBP will ask for during the kickoff meeting is a copy of your organization’s Customs policies and procedures. If you don’t have any, or have them and don’t employ them, get prepared for a lengthy intrusive audit. Don’t be lulled into complacency…your organization may have written procedures, but if you’re not actively employing these procedures, they’re essentially worthless. And make no mistake, during a Focused Assessment Customs will easily be able to determine whether or not procedures are being regularly followed.
3. Product Classification Integrity. Having HTS or other classification designations such as Schedule B or ECCN linked to your product data is an excellent way to demonstrate that you’re taking reasonable care…as long as the classifications you have linked to your product data are correct! All too often importers and exporters do not confirm the accuracy of classifications assigned to various products. The bottom line is, do the research and get it right. Everything can’t be EAR99, folks! I actually once witnessed a Canadian non-resident US importer (who shall for obvious reasons remain nameless) that declared the same HTSUS provision – 8544.42 – for everything they shipped to the US. They declared this tariff provision despite shipping (and importing) various other products such as Printed Circuit Boards and Control Panels. They’re reasoning was that the “Harm Code” (they’re description of the HTSUS) of 8544.42 worked in their document preparation software, so it must be okay. Needless to say there was a lot of educating that took place after that meeting! The bottom line is that an importer has to take the time to get it right.
4. Resources. An entity must consider the resources they will need to commit in order to achieve their desired level of compliance. Depending on the complexity of their operation, an organization may look to employ Licensed Customs Brokers, Certified Import/Export Specialists, and other trade professionals to address their Trade Compliance needs. Gone are the days when tasks required for Trade Compliance can be relegated to a lower-level employees who lack the necessary skill set to get the job done right. What was once “Talk to Frank in the warehouse…he handles all of our Customs stuff”, must be replaced with, “I’d like to introduce Connie. Connie is a licensed US Customs Broker who, along with her team, will be overseeing all of our US import activities.”
5. Keep it going. Once the foundation is established and the framework built, an organization must maintain and document their Trade Compliance program in a verifiable manner. Regular product data reviews, supplier scorecards, team meetings – each organization will have a different menu of items that they will employ in order to demonstrate how they are addressing Trade Compliance.

The simple fact is that organizations who have taken the necessary steps and are prepared will weather the current storm of uncertainty far better than those who aren’t. Please contact Trade Compliance Professionals today for more information on how we can help your organization achieve your trade compliance goals.