KMZ Rosenman

KMZ Rosenman

Partner and director, Global Trade Advisory Group

www.kmzr.com

Most of the business world is keenly aware that the tragic and horrific acts of Sept. 11, 2001 forever altered the conduct of cross-border transactions. Supply chain security is now a weapon in the war on terror. Some governments, especially the U.S. government, have responded to the terrorist threat by stepping in and pushing borders out - and by fundamentally changing the public sector's objectives vis-a-vis international trade, for example by creating the U.S. Department of Homeland Security.

As a Customs attorney, I view this changed trading landscape as the most challenging development affecting industry - including the "legal" industry. Global businesses, as well as other businesses involved in import/export, must now factor security into their business plans and decisions. How we accomplish this objective remains to be seen. Companies ask, "Do we hire a security consultant?" or "Should we purchase and use smart seals or RFID tags?" They ask, "How can we monitor a vendor's security when the vendor is 10,000 miles away?" and of course "What will this cost me?" These are just some of the questions I've been asked by clients and industry colleagues. The answers are slow in coming, but one thing is clear: A security focus is now a key ingredient in the trade compliance soup.

Also, contrary to some opinions, I don't see the traditional trade-compliance functions fading away as duty rates are reduced or eliminated. Compliance extends far beyond traditional tariff classification and valuation. The legal infrastructure is already in place to ensure enforcement of import/export related threats to our environment as well as public health and safety. Consider the ongoing enforcement of non-revenue loss related violations under the U.S. customs laws.

In summary, the biggest challenge facing all of us engaged in international trade is the effective integration of security considerations into our more traditional roles as trade professionals. I have no doubt we are the best equipped to meet that challenge.