Which Department Should Import/Export Compliance Report To?

Dear Import/Export Compliance Manager,

The import/export compliance function in my company is in the logistics department.  Is this something that is frowned upon by the U.S. Bureau of Industry and Security or U.S. Customs and Border Protection?  Should I be lobbying to move under Finance, Legal or Supply Chain?

Departmentalized in Dubuque

Dear Departmentalized,

If you are ever at an import/export compliance conference or other gathering of import/export compliance professionals, you'll find this a wonderful ice breaker question, especially among managers.  Most top-level import/export compliance managers end up reporting to someone who is not well-versed in import/export compliance.  This may be as a result of how the function grew within the company, first starting in something like Sales, Customer Service, Logistics or Finance.  Then it just kind of stays there from inertia, a change being required by someone sticking their neck out to move it elsewhere.  Surveys consistently show that no particular department is the ‘normal’ department for import/export compliance to report into though Finance, Logistics/Supply Chain and Legal seem to be consistently the top three in some order.

As you’re probably aware, there are negative stereotypes associated with every department that import/export compliance might report into.  Finance cares about minimizing cost.  Logistics cares about getting the product from Point A to Point B as cheaply and quickly as possible.  Legal cares about protecting the company.  Supply Chain cares about getting the product made and to the customer as cheaply and quickly as possible.  Sales cares about hitting their numbers.  And so on and so on.

There are also benefits, as the saying goes and as you’ve probably seen, of being in the belly of the beast.  For example, being in the Logistics Department gives you better visibility to what is going on regarding the shipment of products and better access to the personnel responsible for it.  Solutions that can be implemented within a department are usually easier than when you have to involve another department.  And obviously, the same logic applies to other departments that import/export compliance might find itself reporting into.

In the Import/Export Compliance Manager’s experience, the department that import/export compliance reports into is actually not that important in determining its level of success.  What are more important are the level of support from a) the top-level import/export compliance person’s boss and b) upper management.  What good is it to report into a department like Legal, which can be a strong advocate for compliance, if the Import/Export Compliance Department is starved for needed resources (personnel, automation, access to required information, etc.)?  A strong manager, director or vice-president above the top-level import/export compliance person, who can successfully advocate for import/export compliance at higher levels and provide immediate support to the department, is far more important than reporting into a ‘good’ department.  And ultimately, BIS and CBP probably won’t look any more kindly upon your dusty, unused compliance manual even if you’re in a compliance-minded department.

The only exception to this, in the opinion of the Import/Export Compliance Manager, would be Sales.  The mission of Sales, to sell as much product as possible, is just too far away from import/export compliance.  Sales is even referenced specifically on page 9 of the classic Nunn-Wolfowitz report on export compliance programs.  The stereotype of the salesperson ignoring the rules to hit quota is just too powerful.

So, to answer your question, the Import/Export Compliance Manager would only attempt to move the Import/Export Compliance Department into another department in the following circumstances:

• The Import/Export Compliance Department is not receiving adequate support from the non-import/export compliance manager the Department reports into; or 

  
  

• There is a clear benefit, within your company, to reporting into a different department (ex. a department which is not starved for budget)

The Import/Export Compliance Manager doesn’t recommend switching departments due to poor management except in exceptional circumstances.  You never know what may happen, whether your current boss moves into a different role or your new boss in the new department turns out to be worse. Good luck!