Supply Chain

Ten Steps
Toward Compliance Management

By Rennie Alston, President, American River International Ltd.

Many importers are anxious as the new Importers Security Filing (ISF) program approaches its implementation date, on or around January 1, 2010. It is important, however, not to allow this date to get any closer without proper proactive compliance management toward compliant ISF processes, procedures and import SOP’s.
Below are ten steps to help importers toward proactive compliance:

1 Create a strong compliance program

A strong compliance program will contain the elements necessary to ensure a timely filing, inclusive of proper supervision and control of data transmission through record retention practices. A strong compliance platform will have an automatic benefit in a company’s efforts to move towards compliance performance.

2 Ensure connectivity between logistics management and purchasing functions

If there is connectivity between the logistics management department and the purchasing department to allow for advanced capture of purchase order information, the advanced manifest filing process will be much more manageable from a compliance perspective. Access to P.O. data earlier in the supply chain process will afford the importer to more promptly provide manifest level information to the ISF filing agent.

3 Control international freight decisions and third-party freight forwarding services

The importer should seek to control the international freight decisions including the selection of freight forwarders and carriers. The control of these decisions will complement the efforts of compliant and timely filing, as the importer will have direct access to advanced shipment details provided by a service provider with their direct interest as a primary responsibility.

4 Control the container loading process

The importer must control the container loading process to ensure that the container is not offered for loading prior to the proper and compliant advanced manifest declaration being tendered to CBP in an automated process.

5 Create a proactive harmonized line item review process

A comprehensive harmonized line item review should be completed by all importers. This will ensure that correct HTS information is provided at the purchase order level to the foreign shippers and sellers to be available 24 hours prior to the loading of ocean containers on vessels destined for the United States.

6 Conduct proactive discussions with current manifest filing parties

Conduct proactive discussions with the international supply chain participants that are currently filing 24-hour manifest information on their behalf to determine their specific service offerings relative to the ISF program. An informed decision can be made on the best action to be taken once all options are made available.

7 Review best option for ISF filing for each importer

An informed compliance review of the options available for ISF filing, inclusive of the stand alone AMS, stand alone ABI, CF 3461 automated filing and the CF7501 automated filings.

8 Find out what automated options are available by current service providers, such as freight forwarders and customs brokers

A performance and cost analysis should be conducted to determine the financial impact that this new program will have on the importer company’s bottom line — the most compliant and cost effective solution available to meet the ISF requirements.

9 Post filing audit functions to ensure timely filings are being realized on a shipment by shipment basis

Every importer must have the ability to manage the post declarations filing information so they can conduct self-assessment reviews. By doing so, importers can make sure proper filing information is being transmitted in a compliant and timely manner.

10 Good faith intent to comply with ISF rules and regulations

The good faith intent to comply begins with senior management endorsement of the company’s effort to meet the new compliance requirement. The good faith intent will be mirrored at the operations level if such commitment is demonstrated from the top down throughout the organization.