TradeLane

Compliance manuals are excellent vehicles to help importers and exporters ensure that they are doing everything they can to operate in conformity with the various laws and regulations under which they operate. The trick, however, is in deciding what actually needs to go into the manual.

A good jumping off point is to take a realistic look at the way your enterprise operates, and then ascertain what kinds of risk your various activities present to a regulator.

As regional companies look to grow into multi-nationals in the never-ending search for new markets, an understanding of Global Trade Compliance becomes critical for several reasons.  One of the most obvious reasons is to reduce the risk of running afoul of local laws and regulations. Additionally, maintaining a consistent and reliable supply chain and taking advantage of various government programs such as Free Trade Agreements, Duty Drawback, Security Programs and other initiatives designed to benefit compliant importers and exporters speeds the supply chain and saves money. 

As companies expand into more and more markets, inevitably they reach a critical mass where the need to standardize compliance functions across multiple geographies, business units, and Customs regimes becomes apparent.  By “apparent,” we mean that you have done such a good job that you have been gifted compliance responsibilities for not 1 country, but 108. This is often a daunting task given the labyrinth of varying trade regulations. The first phase to this process is assessing the company’s current state compliance profile on a global basis, then moving to implement global frameworks to bring a level of consistency across the network.  Here are a few simple steps to get you started:

Binding rulings allow an importer to get a determination on the correct classification and duty rate for their products in advance of importation.  A binding ruling request can be submitted electronically or in a letter to the CBP Information Exchange, National Commodity Specialist with a detailed description of the product along with relevant specifications, descriptive literature and samples. The importer generally receives a response within 30 days. Once Customs issues the ruling, the classification is binding for all US ports.  

When was the last time your company did an in-depth review of the Harmonized Tariff Classifications assigned to the parts you import into the US? Go ahead and take a minute to think about it, I’ll wait…

I’m going to take a stab in the dark and say that you are guessing the last review was done sometime before the advent of the iPod, but after the Reagan Administration. Don’t worry, you’re not alone. I cannot tell you how many companies I deal with that find themselves in the same position. Unfortunately for them, more often than not they are only brought to ask this question of themselves because CBP has asked it of them in the form of an audit. If you take one thing away from this blog, DO NOT wait until CBP has asked you this question.