Visibility Into Compliance

For at least one trade-related industry, these are boom times. The trade management software industry is prospering amid a wave of new and forthcoming regulatory compliance and security mandates and free trade agreements.

Importers and exporters are turning to a new generation of Web-based compliance platforms to help them navigate the complex world of global trade regulation as compliance matures into a core logistics function.
Much of the action in recent months has come as the Importer Security Filing, or 10+2, mandate went into effect. Under the U.S. Customs and Border Protection program, importers and carriers must file 12 data elements before a U.S.-bound container is loaded aboard a ship at a foreign port. Enforcement began on Jan. 26.

So far, about 75 percent of importers are filing, but the numbers are fluid and can change, according to Richard DiNucci, director of the Secure Freight Initiative.

At this point, Customs is not issuing fines against importers who have filed incorrect or missing data elements, or not filed at all. Instead the agency is issuing what DiNucci said are information notices stating that there may be issues with the filing. “The letters are not contemplating damage claims,” he said.

The ISF is part of Customs’ risk-based approach to trade regulation and is part of a broader push to automation to reduce the agency’s paperwork and free up time for targeted enforcement. “It allows us to do a much better job of determining which shipments should be looked at and how they should be looked at,” DiNucci said.

Almost lost amid the attention to 10+2 was that it was the first all-electronic trade program promulgated by Customs, with no paper option, pointing the way, perhaps, to the paperless future the trade community and Customs both want. That wasn’t the intent at the outset, DiNucci said, but importers who had not previously automated their trade compliance processes have readily adapted.

ISF is a reminder to shippers that they need to exert close control their own supply chains. For importers already complying with numerous trade mandates and under pressure to reduce costs, the silver lining of 10+2 is that it allows them to identify inefficiencies and eliminate redundancies, resulting in lower risk and fewer problems with Customs.

“If you clean that up, you can do us and yourself a favor,” DiNucci said.