Help with customs compliance

Help with customs compliance

Until Jessica Dittberner came along, Dallas Airmotive Corp. never had a manager to monitor its compliance with import and export laws and regulations. The company had relied on its customs brokers to keep it within the law, but Dittberner said that if Dallas Airmotive had continued that way, it would have attracted the auditors of the Bureau of Customs and Border Protection.

"They weren't doing anything wrong intentionally. They just didn't know better," she said. "We were starting a compliance program from the ground up."

Dallas Airmotive services and repairs jet engines that are shipped in from many countries. The company also imports parts from Britain and Canada. While Dittberner is a licensed customs broker, there were classification questions and inventory procedures that were beyond her experience, not to mention a need to draft a company compliance manual.

For help, she turned to the Inter-national Compliance Professionals Association (ICPA). "If I want a fresh idea on how to do something, I can post an anonymous e-mail." When she does, she may get bombarded with 20 or 30 responses from helpful fellow compliance people, said Ann Lister, one of ICPA's co-founders.

Over the past decade, the corporate compliance officer has evolved into a new and separate discipline within the import-export industry. ICPA is tailored to their needs. The association has 320 members. It will have its first meeting next March in San Diego.

"As companies began to hire compliance officers, there was no place for them to go to be among their own kind," said Lister, Texas Instruments' global compliance officer for educational products in Irving, Texas. Lister and Lynda Thomas, senior manager for import-export trade compliance for Pier 1 Imports in Fort Worth formally chartered ICPA early this year.

The Customs Modernization Act of 1993 put the burden of compliance squarely on importers. "Informed compliance" was an importer's obligation, and bad advice from a third party was not an acceptable excuse for disobeying the law. Lister and Thomas said the Mod Act laid the groundwork for corporate compliance officers, but Customs' enforcement policies in the years that followed made such specialists necessary.

Within two years of the Mod Act's passage, Customs began a vigorous enforcement program. In 1999, Customs slapped Recoton Corp., a Florida home electronics manufacturer, with a $14 million fine for improper duty payments and country-of-origin violations. Jeff Tooze, import operations and customs manager for Columbia Sportswear in Portland, Ore., said the case was a landmark one.

"Everyone was in a panic," Tooze said. Companies that thought they were operating below Customs' radar screen suddenly found themselves in Customs' sights. Customs began a program that sent enforcement teams to audit the import records of some of the largest U.S. importers. The Compli-ance Assessment Teams, or CAT audits, became one of most-hated Customs programs of the late 1990s.

"The Mod Act was the catalyst. The CAT audits had a role" in the evolution of the compliance professional, Thomas said. Since then, Customs has modified its program to reduce the compliance program and emphasize importer self-assessment. That has led to a sense of partnership between the trade and the agency.

ICPA's key feature is its anonymous e-mail bulletin board. If a member has a question, he or she can post it, and get answers or suggestions in return. If the member needs more information, ICPA can facilitate a one-to-one meeting. Lister and Thomas said the anonymity even allows compliance officers from competing companies to offer suggestions. Most companies do not compete on import compliance, and the interchange improves everyone's level of compliance.

That worked for Columbia Sportswear, Tooze said. "Somebody posted a question about a sensitive issue that we were just beginning to encounter. We asked ICPA to get us in touch with the other importer," he said. The other company openly discussed the problem and solution in a conference call. "It saved us a lot of time and effort. When we work with trade compliance professionals, we can open up about compliance. We can benchmark on each other.

"You don't need to be designated as the compliance person if you're in charge of compliance," Lister said. In smaller companies, the company controller, chief executive or other senior official may assume compliance as a collateral duty, and they are welcome as members.

But the organization is discouraging memberships from customs brokerages and other third parties in the supply chain. She said such companies are compliance officers' service providers. Keeping the membership narrowly focused will let members discuss issues without getting a sales pitch.

"Our group is molded to the compliance professional. It's geared to a specific group of people," Lister said.

"It's going to make the job of the compliance professional easier," Thomas said. She said one of the biggest challenges the organization faces will be how to grow while still keeping the one-to-one relationships that members value. "How do you keep the community spirit and grow large? The e-mail aspect needs to stay. That's what connects people."_