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Is your service provider compliant? Most importers and exporters utilize the logistics services of a freight forwarder, customhouse broker and/or third party services provider. These companies are “partners” in your global supply chain and need to become part of any trade compliance program and initiative you have put forward. Various government agencies require you as the principal importer or exporter to “supervise and control” the actions of your service provider. These government agencies are DHS/CBP (Customs), TSA (Air Security), BIS (Department of Commerce), Treasury and the Department of Justice, to name a few. This means you must take a proactive and aggressive approach to managing the compliance functions of all your service providers. Here are a few suggestions to make this due diligence and reasonable care standard work easier and more effective: Limit the number of providers If you have more then four or five service providers, regardless of the size and scope of your global supply chain, you probably have too many. From a trade compliance perspective, having too many providers is a “red flag” to government authorities. The more you have, they believe, the more it becomes too unwieldy to manage and supervise well. Limiting the number to two to three is a best practice and becomes a more manageable operating guideline. Do they have a trade compliance officer? Ask the question. If they do not, move to another provider. If they do, this is a good start. Meet this person. Ask a lot of questions. Determine their experience and level of expertise. The fact that they have this person evidences a commitment to managing trade compliance responsibly, thoroughly and proactively. Develop a good working relationship with this person or their team. It will prove invaluable in your own trade compliance program. Many logistics service providers are at the “cutting edge” of trade compliance management, something you can directly benefit from. Do they have technology trade compliance capability and software? This is critical. Trade compliance software can be a cornerstone of comprehensive and cost-effective trade compliance management. It demonstrates a cutting-edge, contemporary, state-of-the- art approach, which will help the principal import/export company be compliant and secure. The ability for this software to interface with your operating systems will be a key point for implementation and successful utilization. Do you audit what they do? To ensure service provider trade compliance, we suggest you regularly audit their performance. This can be done quarterly, but no less than once a year. Areas such as their AES transmissions, import files, and Customs forms 3461 and 7501 need to be checked and scrutinized in great detail. Additionally, you will audit areas such as, but not limited to: Recordkeeping Harmonized classification Government interface on information transfer and adherence to the regulations Documentation quality Personnel training and capabilities in trade compliance Denied parties screening FCPA (Foreign Corrupt Practices Act) adherence An audited provider will perform better. And you will know that if they are compliant — then you are likely to be compliant too.	In This Issue Up Front News, Trends & Analysis New Items The risks of delayed action Supply Chain Is your service provider compliant? Does that belong in my port? Features Grading the carriers: How are your service providers doing? Gateway at a glance: China Ports & infrastructure Port Productivity Tools: Six success stories U.S. ports downsize staffs in new economy Port Products RTGs and reach stackers Commentary What’s on the horizon? On the Horizon Fleets of the future: The Chameleon Casualties
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Is your service provider compliant?