Compliance and Supply Chain Insights

Global market conditions are changing more rapidly than ever, and importers around the country are struggling to keep up with the latest information. One of Laufer’s Customs and Compliance group’s top priorities is to provide our customers insight into what we are seeing and hearing. Recently, Ashley Coxey and Lacey Watson, two leaders of our Corporate Customs Brokerage and Compliance teams, attended the virtual ICPA (International Compliance Professionals) Fall conference along with other top experts in US Customs, Compliance, and Supply Chain fields. Here are some of their key takeaways:

Section 301 tariffs on Chinese origin goods are still at the forefront of many importer’s minds. Adding to the confusion caused by rolling exclusion expirations and potential extensions, there is now talk that Section 301 duties may be assessed on de minimus shipments (entry type 321). De minimus shipments are import shipments with a commercial value under $800 that are provided a ‘speed lane’ through Customs and are not subject to duty. This change would represent a major shift for small package and e-commerce importers and cause disruption in supply chains where 1 to 3 day speed to market is crucial.

Risk management has always been a focal point in the logistics industry, but has come to the forefront lately with more stringent enforcement of human rights violations and the emergence of the urgent need for PPE. We have seen many importers pivot their business model to enter the PPE market. Many novice manufacturers, shippers, and importers have begun to import these highly controlled commodities without first exploring the detailed government requirements. Companies should conduct a thorough risk assessment of their vendor partners and their commitment to US regulatory practices.  In some cases, PPE import shipments have been detained, destroyed, or re-exported by US Customs due to non-compliance. To avoid these types of issues, it is imperative importers scrutinize their supply chains, practice due diligence, and have policies and procedures in place. Proof and documentation that the supply chain has been vetted is helpful in cases where CBP issues action against a shipment.

Enforcement of violations is critically important to CBP (US Customs and Border Protection). If there are concerns at any point in the supply chain, it is best for companies to be forthcoming with Customs and all government agencies with those findings. CBP allows an option for Voluntary Disclosure which can aid companies in presenting their findings, offering solutions and corrective action, and possible mitigation of liquidated damages or penalties. How companies identify and manage what’s considered ‘negligence’ in the eyes of CBP is crucial and can mean the difference between compliance and civil/criminal penalties. We recommend consulting with your customs broker or specialized customs attorney first to review your finding or questions prior to filing a voluntary disclosure directly with CBP.

Still have questions or needing additional advice on these topics or other Customs and Compliance issues? Please contact one of our experts – Ashley Coxey, National Director of Business Development, Customs Brokerage or contact your local sales representative.