
May 2019 | ISE Magazine 39
denied by the Department of Commerce’s Bureau of In-
dustry and Security.
Documented compliance policies and procedures.
The company should have a written compliance manual in-
cluding policies and procedures available for all employees
to follow, to be used as a basis for the compliance training
program. The current processes and procedures should be
in the manual. It should be widely distributed and kept up
to date.
Ongoing compliance training and awareness. The
trade world is constantly changing. As international regula-
tions change, so do a company’s needs and requirements.
The company should assess the organization’s current train-
ing program and develop a compliance training plan to
avoid being left out of important changes in compliance.
The training should be tailored to the audience and should
focus on the areas of greatest risk.
Pre- and post-export compliance security and
screening. The organization should manage the process
from the first point of regulatory risk through the sup-
ply chain process. The initial determinations should be
accurate (e.g., classification and license determination).
The post-shipment activities (e.g., re-exports, re-imports,
transfers, warranty returns and post entry reconciliation)
should be monitored.
Record keeping. Effective records-retention proce-
dures and easy retrieval are critical for successful record
keeping. If the company makes a mistake, record keeping
can keep it out of trouble. A formal records management
program should be developed and the physical or virtual
locations where records are kept should be identified.
In general, maintaining accurate record keeping helps
companies prevent fines and penalties when U.S. Customs
and Border Protection decides to perform an audit. By law,
companies are required to keep records for at least five years.
Suppose you work for a company exporting parts on a
regular basis to Mexico and Canada. Former NAFTA cer-
tificates are issued every time the parts are shipped. The
certificates from the same year for the same part can be used
throughout the year. Maintaining accurate record keeping
of all the certificates used during the year will help the
company save time by not having to issue a new certificate
every time the part is shipped. Keeping all certificates on
file will also help the company gather the necessary infor-
mation at the end of the year to determine how many dol-
lars have been saved due to the applicable trade agreement.
Trade compliance monitoring and auditing. Com-
pliance audits can help uncover issues and discover vulner-
abilities and potential violations. Companies are recom-
mended to perform audits annually or semiannually to
ensure consistency in compliance practices. It is also rec-
ommended they monitor the audits to discover weak areas
and provide insights into areas that need future auditing.
According to the Sandler, Travis & Rosenberg Trade Re-
port in May 2017, the Court of International Trade assessed
a penalty of more than $691,311.54, plus pre- and post-
judgement interest, to a company importing sugar into the
United States. The shipments of sugar were misclassified
under an incorrect harmonized tariff code. The CIT con-
cluded that the company classification constituted a false
statement. In addition, the misclassification resulted in
$345,655.77 in lost revenue to the U.S. government.
In cases like this, if the company would have conducted
an internal or external audit on a regular basis for all of its
classification codes on file, it could have detected the incor-
rect classification code, reported it to customs and saved lost
revenue and damage to its reputation.
Compliance problems and violations handling.
The company should provide guidance to employees on
how to report violations or suspected violations, and how
to obtain advice on compliance requirements. Policies and
procedures should be addressed in employee compliance
training. The compliance management chain should be
clearly defined and empowered, and appropriate corrective
actions should be documented and taken in response to ex-
port and import violations.
Companies with successful trade compliance manage-
ment programs have incorporated all the key elements
above and have a strong trade compliance management
team with representatives from different areas of the busi-
ness (engineering, legal, purchasing and logistics). Good
compliance is good logistics because it reduces the legal ex-
posure of the company, reduces costs, improves documen-
tation and record-keeping compliance, improves collabora-
tion and communication among different departments in
the company and external partners, increases operational
efficiently and reduces adverse publicity.
Diana Berry is a supply chain import/export specialist at Harsco
Rail with an MBA and 13 years of experience in logistics. She was
program chair for the 2018 IISE Annual Conference and founder
of the IISE Sustainable Development and Logistics and Supply
Chain divisions. Berry currently serves as an IISE vice president of
technical operations, general program chair for the 2019 IISE An-
nual Conference & Expo 2019 and as member of the IISE Body
of Knowledge governance committee.
Francisco Ramirez is a logistics manager at Harsco Rail with 20
years of experience in a variety of roles, including transportation
management, warehousing, distribution and customs compliance.
He holds a B.S in international business from the University of
Guadalajara, Mexico, and a Supply Chain Management certifica-
tion from Georgia Tech.