DWYS, SWYD (aka, “Do what you say, say what you do”) is an acronym for importers and exporters that defines compliance, as well as the integrity of their supply chain. With product quality, great service and timely responses, integrity is no doubt already a large part of your business.
In addition, it’s important to keep in mind that your supply chain’s domestic and international functions are most efficient when established processes are communicated, implemented and understood by all stakeholders. Likewise, as an exporter, adding to net margins by selling overseas must follow processes already in place. Understanding and keeping up-to-date with any changes to trade regulations is no easy task, so here are a few guidelines to follow as an importer and/or exporter to avoid noncompliance and costly mistakes.
The cost of noncompliance is difficult to measure. Accounting will always look at the measurable cost of compliance knowing that it will increase overhead. For years, the Congress has commanded Customs and Border Protection (CBP) to combat imports of counterfeit goods, protect trademarks/copyrights, improve enforcement of anti-dumping/countervailing laws and clear the deck for unencumbered prohibition of goods made by forced or child labor.
Supply chain costs due to inattention of free trade agreements, duty rates, anti-dumping, countervailing and trademark violations could put your company at risk of failure. For example, anti-dumping rates for varied products such as aluminum extrusions, nails, steel pipe, rebar, tires and shrimp are as high as 843 percent!
To eliminate the risk of noncompliance, make sure you are addressing the following:
What is the price you actually paid to the seller? Are you taking a discount? Is there a commission or rebate payable?
Verify tariff classification with a licensed customs broker to determine which trade agreement you may qualify for and substantiate the claim.
Determine if your product falls under the scope of a special duty case.
Ensure that your goods are properly marked with the country of origin.
Have you provided assists to the supplier, and have you accounted for these costs?
Have you considered the use of any trademarks and received releases from the holders?
Is your imported product regulated by other government agencies, such as the FDA?
All of the above must be made clear, preferably on the seller’s invoice to you. In addition, if freight is prepaid, request that the seller provide this cost as a substantiation to reduce your duty liability.
A corporate import/export compliance manual does not need to be large. In fact, for most companies, it need not be more than six pages. Naturally, the shorter the manual is, the greater likelihood that internal staff will adhere to your goals of “Do what you say, say what you do.”
Most of the world’s middle class lives outside of the United States. Successful business ventures outside of our borders are necessary for any company’s long-term growth and profit margins.
Simple compliance steps for any export program build on your current processes, and include these customer qualifications:
Are the restricted parties screening lists part of your customer qualification?
Have you investigated country embargoes?
Have you made any inquiries as to whether your products need an export license?
Do you re-qualify the customer when you receive an order and when you are ready to ship?
Take advantage of services offered by the State of Wisconsin. Our state is highly motivated to help you build a successful export program. We recommend an excellent online resource, the InWisconsin website.
With any compliance program, there must be a designated individual listed as the compliance officer. Any person responsible for compliance must have a direct line to the company’s officers. Within our federal government, the United States Census Bureau provides a collection of informational videos on the subject of export compliance and regulation.
Compliance for imports and exports need not be a standalone process. It is best to integrate it into your usual processes and procedures for cost of goods that are purchased and sold to qualified buyers.
For imports and exports, you can engage a customs broker and freight forwarder like M.E. Dey & Co., Inc. to help guide you through the potential roadblocks in your path to success.
Join M.E. Dey & Co. at this year’s Wisconsin International Trade Conference on May 11th where they will be speaking on International Trade and Compliance. Access the conference agenda here.