In every organization—business, political, social, household—there is what’s often described as an unsung hero; an individual who plays a pivotal role but is often overlooked or uncelebrated. Within global organizations engaged in international trade, perhaps one of the most under-celebrated and under-appreciated is the compliance manager.
For the uninitiated, a trade compliance manager is someone who deals with the legal, regulatory, and administrative aspects of importing/exporting goods into a specific country or trade zone. The compliance manager’s goals are: to certify goods are being brought into a country in a manner that is compliant with the laws and regulations of the land; to ensure goods are being imported in the most cost-effective manner, leveraging preferential duties under trade agreements; to identify and mitigate risks associated with non-compliance to prevent unnecessary (and significant) penalties; and, to prepare for customs/government audits. In short, they are responsible not only for saving and protecting millions of dollars in international-related transactions, but also for protecting the reputations and good standing of the corporations they represent.
If that sounds straightforward, it’s anything but. It involves dealing with hundreds of potential classification codes across multiple geographies, each with their own regulatory and customs processing systems, the role is characterized by high stress, long hours, frequent and sudden adaptation to changes in the processes of external agencies, and a requirement to update one’s knowledge constantly.
In my role, I have the opportunity to meet regularly with compliance specialists. Many of them impart to me their daily stresses, emerging pressures and the changing nature of their role. That role has evolved rapidly in recent years from one that was primarily administrative in nature to one that is strategic and forward-thinking. But that evolution has resulted in added responsibilities and expectations without relief from the demands of day-to-day compliance matters.
It’s difficult to remember a time when there has been more pressure on compliance specialists. The past two years have witnessed significant changes to how goods move around the world. New trade agreements have emerged. Existing trade agreements have been revised. New tariffs, anti-dumping duties, countervailing duties and surtaxes have become commonplace, and with them greater scrutiny on how goods are classified. New processes in the transmission of customs data and the reformation of customs processes have become constant in a world attempting to digitize customs administration. Attempting to adjust compliance data and processes in response to all of these changes while providing strategic counsel to their organizations’ supply chain leaders has been onerous to say the least.
Perhaps their greatest frustration is that all the recent change and volatility surrounding trade has made them welcomingly more visible and valued to superiors and corporate leaders for the strategic role they play. But they are so overwhelmed by the constant barrage of change in customs administration they have scant time to gather the insights and perform the data analysis required to effectively showcase their strategic value.
To be sure, automation software exists to streamline the compliance process, offering some relief from day-to-day compliance management. But the software is only as good as the data it manages; and mining that data for inaccuracies and inconsistencies is a daunting task, particularly when multiple products, geographies and compliance processes are involved. To achieve true peace of mind, compliance specialists typically choose to partner with external consultants to mine the data and then apply them within a global trade management software application.
Doing so is often a difficult choice as many feel they’re relinquishing control over a process they have traditionally managed and that remains integral to their role. And yet, I’ve witnessed a noteworthy shift in the number of instances in which customs specialists do just that in hopes of capitalizing on the opportunity to dig into strategic planning in earnest.
With so many changes happening all at once, they need the time required to understand, analyze and reflect on supplier sources and markets, production materials, product design (and in turn product classification), risk exposure, changes to landed costs, impact on supply-chain partners and the hard and soft costs associated with all of these. Still, many others continue to take on the tasks associated with that strategic planning while still managing day-to-day compliance, which is a tall order, to say the least.
Whichever method they choose, it’s indisputable their role is becoming increasingly invaluable in optimizing the performance of their organizations’ supply chains. And as long as disruption remains the new normal in global trade, you can be sure they’ll be burning the midnight oil.
So the next time you see your compliance manager with his or her head hidden behind a stack of documents or multiple computer screens as you make your way out the door, give them a high-five for going the extra mile.
Bernie Hart is a vice-president in the Global Trade Management division of Livingston International. He has more than 30 years of experience is a veritable expert in the import, export, technology and compliance aspects of international trade.