Importers and exporters alike have a duty to be trade compliant in order to avoid violations of federal agencies’ regulations. Transgressions may result in audits, penalties, fines, seizure of cargo or assets, and revoked privileges as an exporter.
If any of these questions were answered no, you would be considered noncompliant.
A good, reliable, and compliant freight forwarder and customs house broker will be able to assist you in correcting any of the questions you may have answered no to. In addition, they can assist you with other valuable information to ensure that you are fully compliant, thus avoiding a myriad of possible penalties.
Take this quick self-assessment test to see where your company stands with compliance.
A Does my company have a written Trade Compliance Policy Statement, which was issued by our most senior executive?
B Does my company have a formal Trade Compliance Department, “Empowered Official,” or Designated Trade Compliance Officer?
C Have our employees been involved in the processing of international transactions and/or completed current import and/or export compliance training (and updates) within the last six months?
D Has my company properly classified all of its export products with appropriate Export Control Classification Numbers (ECCN), U.S. Munitions List (USML), dual-use and such categories, or import commodities with appropriate Harmonized Tariff Schedule (HTS) numbers?
E Do our employees that are involved with any export transactions, including in the sales process, check all foreign parties (including banks, freight forwarders, etc.) against the Bureau of Industry and Security’s recommended “Lists to Check” (e.g., Denied Persons, Specially Designated Nationals, etc.)?
F Does my company keep documented import and/or export transactions for compliance and internal audit procedures, and are we aware of what paperwork that involves and for how long we must keep it available?
What are the qualities of a good, reliable, and compliant freight forwarder or customs house broker? Here are a few questions that you might want to ask your present freight forwarder/customs house broker:
1. How many years of experience in the industry do their operations personnel have?
2. Is there a system in place to monitor quality control and take corrective measures?
3. Have they formalized internal SOPs (standard operating procedures) for dealing with compliance in their operation?
4. Do they have mandatory in-house education and training for their operations personnel?
5. What type of technology (if any) are they using to screen the “denied party lists”
If they don’t have long years of experience, or if they answer no to questions 2, 3, and 4, you may want to reconsider your relationship with them.
My experience over the years has shown that while many companies believe they are trade compliant, many times a deeper dive into processes and a mock audit reveals that exporters and importers are, in fact, not compliant or are lacking full compliance.
Utilizing a transportation provider, freight forwarder, or customs house broker with expertise in this important area can be a valuable tool. These issues need to be taken into consideration, in addition to the fees they charge.
Value-added is always a better option than choosing the least expensive!