When it comes to global security programs, one of the most important is C-TPAT (Customs-Trade Partnership Against Terrorism). Through this initiative, U.S. Customs and Border Protection asks businesses to ensure the integrity of their security practices and communicate and verify the security guidelines of their business partners within the supply chain. Programs like this help companies proactively manage and control risks associated with its partners and supply chains.
“Most companies want to trade goods responsibly,” said Hardenburgh. “It’s a big negative from a humanitarian and a goods standpoint if something happens to their cargo that causes a terrorism or security incident. Many larger companies take trade compliance seriously. It’s not only the right thing to do from a humanitarian standpoint but a business standpoint. [With] C-TPAT and others, the companies ultimately partnering with the government and going through procedures can demonstrate that they have great trade compliance practices in place. It involves people, process and technology. You can’t do it without all three.”
Where would we be without technology? The amount of data that needs to be accumulated and digested is enormous. “Most companies, if they aren’t doing it today, aren’t aware of the technology available or are trying to figure out which one to use,” Hardenburgh said, noting restricted-party lists that must be adhered to. “It’s next to impossible to screen those lists. Not just the names of the entities, but the AKAs, so matching on a spreadsheet is next to impossible. It’s not only the sheer level of the effort but also the level of skill set of the person that needs to do that and how likely they are to stay in that position for an extended period of time.”
When it comes to duties and fees, the complexity rises yet again. “It’s not just giving the rate,” Hardenburgh said. “You’ve got to calculate it [in INCO (International Commercial Terms, which are intended to clearly communicate the tasks, costs and risks associated with transportation of goods. Inco terms are widely accepted by governments throughout the world.)] Most calculations are complex and cumulative. You need to be able to do that math. Most folks don’t have access to that. Automation helps.”
There are teeth in the import/export regulations. And intent does matter. “If it’s not intentional,” Hardenburgh added, “the government may set aside a portion of the fine and say, ‘Go get an export system.’ It’s not always technology but it often times can be. It could be personnel, documentation or instructions on how to process goods.”
And that’s reason enough to be very, very careful. For more details on this exclusive report, visit www.sdcexec.com.