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Compliance at Risk Depending on Ownership Within the Company?

12/26/2013

2 Comments

 
Who Should Own Compliance?

This topic has been discussed before, but it has come up a few more times recently so I thought I would kick it around again.  That is, where should the Trade Compliance organization rollup to?  In the realm of Legal/Finance/Ethics or the more operational segments of Procurement/Supply Chain/Logistics?

Decent arguments can be made for all sides, and it probably depends on your place in the business as to where you come down on the issue.

If you are in the trade compliance group itself, you probably prefer to be in Legal or some other function such as Ethics where you are removed from the day to day operational pressures of keeping freight moving.  You want to be able to give the best compliance advice without compromise. You’re more apt to be listened to and taken seriously if belonging to these groups as well.

If you are managing the supply chain then you probably want the trade compliance functon to reside in or somewhere alongside Logistics in order to have quicker access to  possible solutions to the daily challenges that arise moving freight across international borders.

What are some of the issues associated with residing in the supply chain?  Can you be an effective part of keeping imports and exports flowing smoothly on a situational basis without compromising compliance?  I think it depends largely on how busy you are overall and the nature of  your commodities.  That is, what kind of volume are you moving, and what are the import and export compliance risks associated with your particular product mix?

Care to weigh in?  What are some of the pros and cons?

2 Comments
Shaylee Packer link
6/5/2020 05:26:16 am

As you mentioned, the more volume of merchandise you are moving, the more chance for something to slip through the cracks. Is there a service that can help make sure that things don't slip through the cracks? My brother would like to get into international trading, and know all the ins and outs that come with it.

Reply
James Carneiro
6/5/2020 11:23:52 am

Hi Shaylee,

Not knowing anything about your brother's type of business, I would say from an import perspective, his best bet is finding a good Customs House Broker who can advise him of the pitfalls associated with the type of goods he deals in. It varies by industry (e.g., wearing apparel vs. produce vs. pharmaceuticals).

If he is dealing with relatively low value shipments (under $2500), he doesn't necessarily need a broker, but he would be on his own for figuring out the regulations. He may want to start here: https://www.cbp.gov/trade/basic-import-export

If the broker is good they can provide advice on export regulations as well.

Good Luck!

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