Global Trade
Michael J. Ford, BDP International
Amplify 2012
Global Compliance
• What does it mean to be globally compliant?
• Can this effort be achieved?
• Or it is just a nice set of words to put together to make you feel comfortable!
What Does it Mean to be Globally Compliant?
•
Is this of level that can be achieved?
•
To understand this goal/ objective there are several
important factors that a firm must realize
– Culture that exists
– Resources available (internal as well as external)
– The all important question to ask ?
Global Compliance
Today many companies approach compliance in varies
degrees:
•
Traditional
– A fire-fighting approach
– Piece meal solutions
– Limited resources ( part-time or very little time)
Global Compliance
•
Emerging
– Re-active problem solving
– Compliance awareness
– Limited resources or single party- some skill
– Might have a relationship with partners
Global Compliance
•
Leading edge
– Interacts with Government agencies to possible influence policy for trade advantage
– Good organization alignment
– Global policies and processes
– Systems integration
– Management by exception in place
– Good awareness and training taking place
– Partners with companies that have similar philosophy
Where do you sit today, is that the seat that you want to
be in?
Let’s Try to Address or Answer Some of
These Questions…
Are there Regulations that are Global?
•
IMDG – International Maritime Dangerous Goods –
movement of goods international across the water
•
Product identity – a good / product once it is
available then origination stays will that good until
good is consumed
– Origination = regulatory framework
Success Factors
• Process: continue to monitoring Trade compliance trends and new regulations that exists in each of the local regions and how this
knowledge will impact the trade community.
• Technology: offering up trade compliance automation for internal systems (product classifications, denied party screening)
• Organization: executive management that focus on regional needs for all import and export regulations as well as direction under the movement of chemicals.
• Knowledge: ability to gain access to information on the latest trade regulations for international freight forwarding, customs house
brokerage as well as transportation modes for air and ocean & truck.
Success Factors/ Must haves!
Classification
Valuation
Core polices
Facts and Figures
•
A recent study was conducted by Thomson Reuters
and stated the following important issues:
– “We have been tracking a fairly steady 16 percent year
over year increase in global regulatory activity, with nearly 60 new regulatory announcements every working day.”
– “As a result, compliance teams are reporting that they are increasingly strained in their ability to fulfill their myriad of responsibilities, which are critical not only to their own
businesses, but also in maintaining the proper coordinated functioning of markets around the globe."
Blocking and Tackling
•
Creation of a EMS (Export Management System) and
a IMS (Import Management System) that are
connected with:
– Corporate Policies & Procedures
– Internal controls
– Ownership levels
– Clear communication channels
– Resolution and pause capabilities
Some Myths that Need to Change
•
"Trade compliance is a cost center with no financial
benefit to the company."
•
“Except for avoiding audits, penalties and border
delays. Except for avoiding duty under special programs
such as the North American Free Trade Agreement, the
Central America Free Trade Agreement, the Generalized
System of Preferences.”
•
"Classification is easy. Anyone can do it — just pick the
lowest duty rate and let Customs tell us if we’re wrong."
•
“Until Customs catches you and sends you a bill for the
duty (plus interest) for all entries made over the last five
years. And don’t forget the penalty that’s sure to follow.”
Additional Myths
• "We need to make exceptions for big customers or we’ll lose the business."
– So if I walk past the bank every day on my way to work and only rob it once, the judge will let me off the hook because I was good most of the time? Where is my duffle bag?
• "Compliance slows deliveries."
• Noncompliant importers will face many more inspections and delays, especially after Customs finds the first problem. Due to limited resources, Customs targets the bad guys. Even compliant importers face delays, but if Customs already knows your company has a trade compliance program, they are more likely to work with you.
• While failure to maintain a viable trade compliance program may sound funny, border delays, inspections, audits and penalties are not.
• Trade compliance and supply chain security is more than a fact of business life today. Our world has changed. It’s here to stay.
Can You Have Global Compliance ?
•
Yes, create a structure to handle regional / local
issues that your firm needs to deal with
•
Having resources set up to manage the issues that
your firm faces within the global world
– There are many FTA’s around the world and this practice is growing
– Ethical business practice is now the norm when doing business
– Compliance is not a given, it has become a must have
within your firm, as well as your partners that are engaged in your supply chain
