Jumping to Conclusions

We live in a society where jumping to conclusions without having all the facts is all too common. Case in point is another story about the bad boys of the National Football League, specifically, the behavior of the Miami Dolphins players and their conduct inside and outside the locker room. 

Clearly, the voicemail messages reported by the press aren’t just vulgar. They also stretch the bounds of understanding how using such language (again, as reported) is considered acceptable. We can debate whether you think Richie Incognito’s interview with Fox Sports was a case of good public relations or one in which the truth was told, and regardless of which side you come down on, your opinion is valid.

It’s evident we don’t know all the facts, however. For example, in the course of the interview, a text message from the other part of this big story — Jon Martin — was released in which he said he didn’t blame anyone in particular, but rather the “culture around football and the locker room” for his leaving the team. That text alone makes it clear that there is a lot more to this story than the press currently knows.

So, why start this column with that lead-in? Simply put, because the federal agencies with jurisdiction over trade-related issues do the same thing — jump to conclusions — and do so routinely in their dealings with the trade community.

When the regulators look at a situation, they approach it from the perspective of a suspicion that comes in large measure from their training and experience. If you’re a traffic officer and see someone run a red light, you don’t stop to ask why or what happened, even if a truck blocked your view. You just write the ticket. Similarly, when the regulators see a violation, or something they perceive to be a violation, they assume the worst. 

It’s long been the norm that when it comes to export license violations, the agencies think criminal first and civil second. That wasn’t generally the case with other types of import or export violations until perhaps the last few years, but even Customs and Border Protection often turns to criminal remedies first and civil ones second.

By way of example, I recently wrote about a criminal investigation into companies that buy cars from local dealers and then export them. From the beginning, these cases have been clouded, not because of the actions of the exporters, but because the government keeps changing its mind about the nature of the alleged violations.

Similarly, when it comes to the Customs-Trade Partnership Against Terrorism, CBP’s position is guilty until proved innocent. Admittedly, the agency views motor carriers differently if drugs are found in a load rather than a cab of a truck, but when they are found in the load, you rarely if ever hear about an importer being suspended from the program. It’s always the carrier who is at fault, even if the drugs were placed inside the goods being exported.

It’s clear the current program needs upgrading, but Customs has yet to come up with a more rational approach. From the beginning, you’re either in the program or not. A more rational approach could include allowing companies to upgrade their internal controls while remaining in the program. The goal of the program, after all, is supposed to be keeping drugs out of the United States. Achieving that goal is only hindered if you remove carriers from the program.

For the most part, these carriers are companies trying to be compliant in a world where threatening family members or killing those who don’t cooperate is the norm. Expelling law-abiding carriers from the program for any length of time causes serious financial harm and generally pushes their business to the few remaining replacements that are often significantly challenged when trying to take on that much more business.

Frankly, our colleagues at the Food and Drug Administration, state commerce and other relevant agencies often make it just as difficult to get a satisfactory resolution. 

A client called recently to say an FDA investigator had shown up at his office, sought to use physical intimidation to enter and demanded access to records. It would be great if I could tell you this was a rare event, but it happens all too often. Fact is, investigators are accustomed to getting their way, and when you ask them practical questions, their first response often is this: Are you refusing to cooperate? This client made it clear that, no, he wasn’t refusing to cooperate. What he was trying to do was obtain information so he could better understand the FDA’s request.

This company has is a standard procedure for dealing with such inquiries, and the staff is trained in how to respond. If you don’t already have such a procedure in place, now is a good time to implement one. If you do have such a procedure in place, is it current? Given the arsenal of violations (civil and criminal) available to regulators, you don’t want those regulators to have a legitimate reason to claim you’re not cooperating simply because your staff doesn’t know how to respond to a demand for access and records.

Susan Kohn Ross is an international trade attorney with Mitchell Silberberg & Knupp in Los Angeles. Contact her at skr@msk.com.

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