It’s 2022. Now is a Good Time For a Compliance Review!

Posted on Feb 21


Article by: Rick Walker, Vice President TradeInsights

No one can argue that it’s not been a really tough couple of years for importers. The issues resulting from the pandemic, and the accompanying supply chain struggles have been historic, at least in my 40 plus years in the industry. We’re losing adjectives to describe the calamity. Who could have anticipated that space shortages, exponential increases in freight costs, and transit delays could have conceivably gotten this bad? Because of all of this, importers have been put in alarming situations to meet the demands of their own businesses not to mention those of their customers.

However, there are two parts in the equation when it comes to purchasing and receiving goods sourced internationally. For sure, the first part of the equation is the physical movement of the cargo, which as stated above has been unpredictable at best, but there is also the second part of the equation which concerns the Customs clearance of the cargo and all of the regulatory compliance obligations that come along with that. Did you notice I used the word obligation there? That’s because Customs compliance is a legal obligation, not a choice. Importers are expected to use due diligence and exercise reasonable care with respect to their import transactions, and there are consequences for failing to do so.

Why is now a good time to get a compliance checkup?

The landscape has changed. U.S. Customs and Border Protection (CBP) has not lost their focus on compliance in the last couple of years, but in fact has increased it, and they have become more aggressive in their enforcement efforts. We see this every day in the number of requests for additional information they send to importers, detentions and holds they place on goods, and the use of other tools they have ready at their disposal. New concerns have arisen that can create delays for importers, such as the review and enforcement of the forced labor issue which imposes a much greater responsibility on the importer when it comes to supplier vetting, understanding the supply chain and having better visibility to it. Years ago, it was sufficient for an importer to select a supplier based on their ability to provide a cost-effective product that met the necessary quality requirements.

Not anymore.

The advent of the Section 232 and 301 duties a few years ago created an environment of change. To avert the additional duties, some as high as 25%, suppliers moved their entire production or partial production to other countries, and importers sought exclusions to the additional duties. This opened a whole new area for CBP to scrutinize. Did the country of origin change when the production moved? Were the goods classified properly and were the correct 232 and 301 duties applied? Was an exclusion used and was it applied correctly? Are there formal policies and procedures in place to assure that these duties are declared when appropriate? These are all questions an importer should be prepared to answer and defend if CBP asks.

These are just two of the areas which CBP is focusing on. The old standards still exist. Classification, Value, Free Trade Agreements, Anti-Dumping/Countervailing Duties, Recordkeeping, etc.

We believe that the increase in investigations and audits will continue into the future so importers should take action now to review their compliance policies and procedures to ensure that they are meeting their legal obligations to CBP.

Okay, so what should an importer do now? We recommend three things…….

First, develop a trade compliance team within your organization – assign responsibilities and provide for oversight.

Second, we would highly recommend creating an Import Compliance Manual which details your policies and procedures, and defines the roles of each function relating to your import transactions. CBP expects importers to exercise reasonable care with their transactions and it’s critical to establish internal controls over your import transactions. Documenting these controls indicates to CBP that your company takes compliance responsibilities seriously. A well-written compliance manual also provides a blueprint to help your staff understand each other’s roles and eliminate gaps in compliance. It doesn’t have to be exhaustive, but should indicate corporate cooperation and buy-in, and should outline all of the areas of responsibilities, i.e., who does what. Frankly, CBP would view an importer without documented policies and procedures to be an “at risk” importer.

Third, conduct an internal risk assessment to determine your current level of compliance. I call this the compliance ladder and you want to know whether you are standing on the top rung or the bottom rung. For most importers, it’s somewhere in between, but you’ll want to know where that is. An internal risk assessment is used to identify any particular areas of concern or non-compliance and isolates the areas where corrective action is needed.

A successful importer is the one that has trade compliance as a cornerstone of their corporate policy. Consistency, accuracy, and confidence is the key to maintaining a compliant program. Our TradeInsights team can assist you in keeping your transactions consistent and accurate while fostering compliance and mitigating risks.

If you would like to discuss any of this in more detail, please reach out to me at, or contact the team at and you can be confident that we will help you develop the tools you need to be compliant and protect your interests.