Does Your Company Have An International Trade Compliance Program?

The world of international trade commerce is in a constant state of evolution.

But the ability to forecast and adapt to international compliance changes can be a major differentiator for shippers and companies selling products in the US or abroad.

New rules and regulations are continually being put in place to regulate the flow of goods in ever-expanding markets around the world.

A good example is the Export Administration Regulations or (EAR), which were established and are enforced by the U.S. Dept. of Commerce through the Bureau of Industry and Security (BIS).

The EAR regulates exports and re-exports of many, if not most, commercial items. It also features the Commerce Control List, which identifies items that require licensing prior to exportation.

A person or persons who violate the EAR can be charged with a civil penalty, as well as receive criminally. Conviction of a civil offense related to the EAR could result in revocation of export privileges and fines of up to $250,000 per violation, according to the BIS

And it doesn’t matter if a company knowingly or unknowingly violates international trade regulations. It can still face hefty penalties, not to mention create great risk to the overall health of the business. There are no shortcuts when it comes to international trade compliance.

Take for example a particular enforcement action taken against Computerlinks FZCO, of Dubai, U.A.E., in April 24, 2013. Computerlinks agreed to pay a $2.8 million civil penalty to the BIS and conduct external audits covering a three-year period to settle charges that it committed three evasion violations of the EAR.

Companies that master international trade typically have a strong compliance program that allows all levels of leadership to understand the rules and recognize the risks.

While the anatomy of a trade-compliance program will likely vary from company to company, the concept is generally the same.

For example, a company should create a program that explains the multi-faceted process involving U.S. Customs. Elements of a good compliance program include, but are not limited to; a risk assessment, policies and procedures, training and record keeping, to name a few.

Important Considerations When Building a Compliance Program

Step 1 — Familiarize yourself with the below agencies.

• Bureau of Industry and Security (BIS)

• Office of Foreign Assets and Controls (OFAC)

• Customs Border and Protection (CBP)

• Transportation Security Administration (TSA)

• US Department of Commerce (DOC)

Step 2 — Get educated. There are many classes available that are worth the time and money.

• International Compliance Training

• International Compliance Association

Step 3 — Formalize your company’s export and import compliance policy, procedures, Training, and Records.

There are also several guides a company can follow to ensure international compliance. Here are a few:

• What Every Member of the Trade Community Should Know About: Reasonable Care (A Checklist for Compliance)

• C TPAT: Customs-Trade Partnership Against Terrorism

• ISA – Importer self-assessment program (A voluntary compliance program, participant will need to become a member of C-TPAT first)

• FA- Focused assessment program

Engaging a supply chain expert can add real value to an international supply chain. At LEGACY Supply Chain Services, we have a talented team of compliance experts who can handle the complexities of international security and trade regulations for you.

Our International Customs and Compliance team is dedicated to ensuring goods flow in and out of countries around the world to meet your business needs. Contact us to learn how LEGACY can add value to customs and international compliance.