Building an Effective Internal Compliance Program

Whether it’s spelled out on a single page or makes up an entire manual, a basic compliance program is one where there are internal controls and procedures that implement compliance measures for those laws and regulations an entity must abide by in the day-to-day operation of the business.

Having an effective program is strengthened when there is a culture of accountability in which individuals understand the concept of compliance and their part within the compliance chain.

To be an effective compliance program internal controls and procedures need to be actively implemented and revised with key personnel updated on changes in practices.

 Not only is US Customs interested in seeing an importer’s compliance procedures when being audited or upon application to a voluntary program such as C-TPAT (Customs Trade Partnership Against Terrorism) or ISA (Importer Self Assessment), but it can also play a role in the mitigation of penalties when incidents occur that give rise to such assessments.

Be sure to put together a compliance program that fits your organization, implement it and update it regularly throughout the year.

Top compliance risks should be identified with resources allocated to address them accordingly. A common area of risk for an importer is that within its supply chain. Mitigation of risk can occur by an importer actually knowing where it’s cargo is coming from, who the actual supplier is and where the imported merchandise is going to.

Sounds simple (I know…) but these transactions are not always as clear cut as they would seem at face value.

 Some factors that can make a compliance program appear to be a failure include

·         A failure to tailor and update the program

·         Insufficient training and follow through of personnel

·         Inconsistent enforcement of internal procedures, and

·         An inadequate compliance culture

Questions/comments? Post below or email me at clark.deanna@gmail.com

 

New US Customs “Centers for Excellence and Expertise” (CEE)

I attended a US Customs webinar yesterday that explained how the agency is in the process of setting up new “Centers for Excellence and Expertise” (CEE).  These centers – which are virtual – are intended to bring existing expertise together in order to facilitate trade on the part of US Customs and to align its procedures with modern business practices.

Of greater significance however, is that US Customs intends to assign each importer with an account at a CEE to route entry summaries through and to use these virtual environments to move non-revenue collection activity to a CEE for handling protests, the review of prior disclosures and other activities.  Revenue collection however, will continue to be done at the port of entry.

The creation of CEEs are part of US Customs’ “trade transformation efforts,” which also includes an overhaul of 19 CFR Part 111, which are the customs brokers regulations.

CEEs are meant to serve as an information resource for the importing community, be it a large or small importer or broker, US Customs itself, or another government agency.  Customs stated that it has created CEEs by industry in order to focus on industry-specific issues so it can better meet the challenges for that industry.  Unfortunately, with such few and broad categories (listed below) in relation to the thousands of types of imported merchandise, it is questionable as to how well this intention will be met.

The goals of the CEE are:

1)      To facilitate legitimate trade through effective risk management and to “segment” risk so as to get the “good actors” out of the way in order to focus on the riskier participants,

2)      To increase industry-based knowledge within Customs and to better understand the unique practices within an industry, and

3)      To enhance enforcement efforts and to partner with industry stakeholders in order to understand and address industry risks.

As it stands, nine (9) industry groups were identified by Customs for which nine (9) CEEs are to be created.  Four (4) of them have already opened, listed as the first four (4) in the list below, and importers are already welcome to solicit participation in one of them.

Open CEEs:

1)      Electronics (Long Beach, CA)

2)      Pharmaceutical Health and Chemicals (New York)

3)      Automotive and Aerospace (Detroit, MI)

4)      Petroleum, Natural Gas and Minerals (Houston, TX)

Unopened Centers:

5)      Apparel, Footwear and Textiles

6)      Base Metal and Machinery

7)      Consumer Products and Mass Merchandising

8)      Industrial and Manufacturing Materials

9)      Agriculture and Prepared Products

For more information, you can check out this Federal Register Notice at 77 FR 52048 dated August 28, 2012, access a .pdf version here), or email US Customs directly at cee@cbp.dhs.gov.

Questions/comments?  Post below or email me at clark.deanna@gmail.com

Join Me Tomorrow Oct. 9th at F.I.T. for a FREE Event on Trade, Africa and Fashion!

Time: 6:30 - 8:30 pm
Location: Fashion Institute of Technology, Seventh Avenue at 27th Street, John E Reeves Great Hall

A panel will discuss Africa's emergence as a source of creativity in the fashion industry and the role the industry and other non-traditional players have in leading the sustainable development of the continent to significant business growth.

Moderator:
Ms. Tanya Cole, Foreign Service Officer of the U.S. Commercial Service USEAC

Panelists:

- Ms. Roberta Annan, Project Developer for L'Uomo Vogue's Rebranding of Africa issue, Chair of the Government Liaison Committee of Fashion 4 Development (F4D)

- Ms. Adiat Disu, President of Adiree Public Relations and Founder & Director of Africa Fashion Week

- Mr. Lexy Mojo-Eyes, President and CEO of Legendary Gold Limited, Founder of Nigeria Fashion Week

- Ms. Janice Sullivan, Chief Executive Officer, Edun

This event is presented in collaboration with the Global Trade and Technology Center and Ms. Janiece Greene, Consultant.

Hope to see you there!