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Trade compliance often has a broader scope By Randi Keenan, assistant vice president/senior consultant, American River International Most corporations that successfully engage in trade compliance programs focus on regulatory issues in their import and export supply chains. Areas such as the EAR, ITAR, Census, DHS, CBP and BIS are usually of primary concern. And rightfully so! The position of trade compliance management is maturing and we are observing an expansion of these responsibilities into other compliance and regulatory concerns for companies operating on a global scale. Some of these principal compliance areas are: Hazardous Materials (HAZ-MAT) Foreign Corrupt Practices Act (FCPA) Food and Drug Administration (FDA) Hazardous Materials (HAZ-MAT) The import/export supply chain managers on both domestic and international shipments have an array of regulations when shipping materials with hazardous properties. It is critical to determine the nature of the product. This is best determined by having technical personnel, engineers, chemists, etc. work with MSDS (material safety data sheets) in conjunction with government regulations to determine the hazardous properties of the cargo and its proper classification. This can be as much an art as a science and requires a specific level of hazardous material expertise. Proper training and education in hazardous materials regulations is a critical element of any compliance/safety programs. Once the nature of the cargo is determined, the logistics personnel must incorporate the packing, marking, labeling, storage and shipping process with various regulatory agencies, such as, but not limited to: Department of Transportation Coast Guard Federal Aviation Administration International Air Transportation Association National Transportation Safety Administration International Materials Dangerous Goods Commission Nuclear Regulatory Agency Federal Communications Commission …and an array of local, state and foreign regulatory authorities. While the DOT sets the overlying standards for hazardous materials in the United States, within the Code of Federal Regulations (CFR Title 49, parts 100-185). Depending upon the mode of transit, the countries that the shipment will go to, through or from, and specific products and quantities, there may be several governing agencies that the importer and exporter must be aware of to ensure that they are managing the freight within the supply chain in a compliant manner. Foreign Corrupt Practices Act (FCPA) The U.S. Foreign Corrupt Practices Act (FCPA) of 1977 prohibits U.S. companies, their subsidiaries, as well as their officers, directors, employees, and agents from bribing “foreign officials.” It also requires U.S. companies that issue debt or equity to maintain internal accounting controls and keep books and records that accurately reflect all transactions. The anti-bribery, record-keeping and internal accounting controls provisions are applicable to all global operations. The FCPA is enforced jointly by the Securities & Exchange Commission (SEC) and the U.S. Department of Justice (DOJ). Companies operating globally must create procedures and train personnel in how to avoid participate in any form of activity that creates an FCPA exposure. Food and Drug Administration (FDA) The FDA and the USDA regulate numerous aspects of import and export trade, outlined as follows: Informed compliance Specific education and training for handling of merchandise in industry-specific groups Marking and labeling requirements HAZ-MAT The Bio-terrorism Act of 2002 Customs regulatory requirements for different classes of bonded warehouses Documentation requirements for FDA hold, detention and refused articles FDA sampling experience and knowledge In-house expertise Partnering with compliance expertise to complement warehouse profile Connectivity with all supply chain operatives In all three of these areas — FDA, FCPA and HAZ-MAT — there is significant risk and exposure to companies operating global supply chains. As the position of trade compliance manager is growing and finding acceptance in corporate America, its role in other compliance concerns, as we outlined above, are taking hold. Due diligence, reasonable care and supervision, and control — the foundation principals of trade compliance — can be readily applied successfully to these three areas and a host of others to fall within this new area of defined expertise and capability. It is another form of risk management being handled where qualified expertise is being housed. Randi can be reached at rkeenan@americanriverintl.com	In This Issue Up Front News, Trends & Analysis New Items U.S. employment environment promotes import uncertainty Supply Chain How are you planning for the rebound? 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Trade compliance often has a broader scope