APICS - CSCP 2020 Module 3 Section A

The process of identifying applicable standards, regulations, and sustainable best practices (compliance items) involves the following steps:

• Reviewing organizational process assets (existing procedures, tools, and documentation) for currently applicable compliance items

• Developing, hiring, or contracting with applicable persons or organizations to gain expertise in compliance items

• Scanning for global, national, regional, community, and industry-specific compliance items (including laws and taxes) in each area of operation, differentiating between applicable versus nonapplicable as well as applicable compliance items that:

  • Promote operations such as reduced tax zones

  • Constrain operations such as end-of-life reverse supply chain requirements

• Differentiating between mandatory versus voluntary items

• Updating records and procedures to add any new mandatory items

• For voluntary items, doing a cost-benefit analysis to determine which compliance items are advantageous to pursue

• Updating records and procedures to add new voluntary items that are advantageous to pursue

Clearing customs can be routine, or it can be a serious obstacle to delivering cargo on time.

The purposes of each countrys customs regulations are twofold: to provide revenue and to protect domestic industries. Imported goods, therefore, can be seen as a source of national revenue, as a threat, orambivalentlyas both. This built-in conflict of interest doesnt make the job of importing (or exporting) into a country any easier or more predictable.

Aside from assessing import duties, customs also inspects shipments with the following intentions:

• To confirm that the goods actually have the value stated on the shipments documentation, since that value partly determines the amount of the import duties

• To determine that the items have all the correct markings, including safety labels, instructions, identification of country of origin, and any special marks required

• To weed out any forbidden items, such as illegal drugs and goods judged not to meet certain national standards

• To enforce quotas

• To ensure that the invoice is correct and that the shipment contains the number of items claimed in the documentation

• To discourage dumping of products by imposing a high percentage duty (Dumping is when a company exports a product at a price lower than what the product normally sells for in the country where the company operates. There is a link for additional anti-dumping information online in the Resource Center.)

To expedite a successful clearance of customs, both importer and exporter should either do thorough research on the importing countrys import regulations or hire competent intermediaries to guide them. Customs regulations are a moving target, subject to change whenever new threats arise (or are perceived to arise); hiring a specialist who keeps an eye on that target improves a companys chance of hitting it on the first try. Intermediaries such as freight forwarders, EMCs, and export packagers can help with the preparations. Because clearing customs successfully is so important, most companieseven the largest onesrely upon experienced customs house brokers.

Here are a few general considerations to keep in mind when formulating a strategy for getting your cargo through customs unimpeded:

• Use a customs house broker with proven expertise. Only a licensed broker can transact business with customs, which means that importers must use a broker to submit documents to customs to release their goods. Importers are responsible for providing the necessary documents and information to the broker according to customs time lines and regulations and arranging for the payment of duties found due. (A broker can pay on the importers behalf.) Licensed brokers must have a power of attorney from the importer to act as its agent unless the broker is in-house or works for the same company.