Framework Of A Compliance Program

Dear Import/Export Compliance Manager,

I would like to ask a question regarding creating frameworks or compliance programs that can potentially aid a company in achieving its goals. I have read some articles and watched experts talk on the importance of the role and I have concluded that to be exceptional, I need to be able to create programs to solve different problems. What perspective should an exceptional officer operate from to be able to solve any kind of compliance problem?

Mary in Nigeria

Dear Mary,

You’re getting at the core of compliance, well below the simple ‘Do we really need an export license to ship this?’ or ‘Duties on Chinese-origin goods are now WHAT percentage?’ questions.  These are the thought processes needed for every import/export compliance person to be successful, regardless of the company, industry, countries of operation, available personnel, etc.  Heavy stuff.  The Import/Export Compliance Manager would argue that the following steps are useful for anyone in a compliance field, whether governmental compliance such as import/export compliance, anti-corruption, employment discrimination and EHS (environmental health & safety) or compliance with company policy such as contracts compliance or the company code of conduct.

First, it helps Import/Export Compliance Manager to break down a successful compliance program into three distinct categories as layers of a pyramid.  On the bottom are the laws and regulations. Which laws and regulations are you supposed to follow?  What are their details? What parts cover your business and which parts don’t cover it today but might in the future?  Import laws, export laws, free trade agreements, you name it.  That’s the first step.

The second layer is the data that is drawn from the regulations to determine your level of compliance. These are things like HTS Codes, ECCNs, countries of origin, value, import duties and free trade agreement eligibility.  You need the laws and regulations to get the data, which is why data is the second layer in the pyramid.

The third layer is comprised of your compliance operations.  How do you translate that data into actionable compliance?  This can in the form of government declarations such as for import and export clearance.  It can be due diligence forms such as country of origin certificates and end use statements.  It can be a management commitment statement from the CEO.  These are the compliance documents you can point to in order to say to anyone looking, such as a government investigator, “Hey, we have our act together.”

On either side of layer 3 are the following: processes/procedures and assessments/audits. You need documented processes to ensure your operations run smoothly and in a consistent-and-repeatable manner.  And of course you need to assess your operations’ efficacy and, as necessary, audit.  

There are many other elements for putting together a successful compliance program (training, ensuring you have adequate resources, personnel management, etc.), but the pyramid is sufficient to determine the framework for the compliance program and be on your way.  And, as you work through it, adapt the pyramid for your own experience.