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ISM – Glen Falls, NY Best Practices for Managing Risk, Compliance and Security in Global Supply Chains

ISM – Glen Falls, NY Best Practices for Managing Risk, Compliance and Security in Global Supply Chains. Presented by Kelly Raia American River International. Overview. Post 9/11 mindset of the US government Global supply chains Government initiatives Denied party screening

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ISM – Glen Falls, NY Best Practices for Managing Risk, Compliance and Security in Global Supply Chains

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  1. ISM – Glen Falls, NY Best Practices for Managing Risk, Compliance and Security in Global Supply Chains Presented by Kelly Raia American River International

  2. Overview • Post 9/11 mindset of the US government • Global supply chains • Government initiatives • Denied party screening • Additional considerations • Best practices

  3. Post 9/11 Mindset of US Government • Supply chain information & control • Lack of knowledge importers/exporters of key control areas • Push out the borders • Restructuring of government • Legislation/regulation/process controls • Partner with business • Muster foreign support

  4. Global Supply Chains • Maintain the flow of goods into / out of the United States • Create procedures that reflect a focus on compliance and security

  5. Global Supply Chains • Strategically planned • Efficient • Compliant • Secure

  6. Import/Export Regulations • Customs and Border Protection • Food & Drug Administration • U.S. Department of Agriculture • Census • Bureau of Industry & Security • Defense Trade Controls • Office of Foreign Asset Controls • Transportation Security Administration and so on and so on and so on…..

  7. Compliance Issues • Delays in clearance process • Multiple holds on import shipments • Changing regulations…need to be flexible and ahead of the curve • Detentions &/or seizures on export shipments • Monetary fines • Revocation of import/export privileges • Criminal prosecution

  8. Government Initiatives • Container Security Initiative (CSI) • Advanced Manifest Rules • Importer Security Filing (ISF) • C-TPAT • U.S. Principal Party in Interest (USPPI) • Mandatory AES • Export compliance • Restricted parties lists • Other government agencies

  9. Container Security Initiative • Use intelligence and automated information to identify and target containers that pose a risk • Use detection technology to quickly prescreen containers • Use smarter, tamper-evident containers • Prescreen those containers at the port of departure

  10. Advanced Manifest Rules • Prior notification to Customs & Border Protection (CBP) for both imports and exports • Carriers’ required to provide to CBP

  11. Importer Security Filing (ISF) • U.S. bound cargo: requires the filing of the ISF comprised of 10 data elements • Transit cargo: requires the filing of the ISF of 5 data • Penalties for not filing ISF go against the importer of record

  12. C-TPAT • Partnership with trade • Benefits for joining program • Requirements • Tier levels • Validation • Getting started

  13. U.S. Principal Party in Interest • USPPI: the person in the United States who receives the primary benefit, monetary or otherwise, of the export transaction. • U.S. manufacturer , U.S. seller, U.S. order party • Foreign company CANNOT be the USPPI unless they are in the U.S. at the time the goods are obtained/purchased for export. • A freight forwarder may not be the USPPI!! • Exporter responsibilities (15CFR30.3) • Forwarder responsibilities (15CFR30.3)

  14. Automated Export System • AES / EEI • Canada (30.36)

  15. Export Compliance • Commerce Control List (CCL) (dual use items // Dept. of Commerce) • Export Commodity Control Number (ECCN) • Reason for control • Commerce Country Chart • License Exceptions • Exercises : crayons, handguns, filters • Deemed exports

  16. Denied Parties Listings • Department of Commerce *Denied Parties List *Unverified List *Entities List • Department of Treasury – Office of Foreign Asset Controls (OFAC) *Designated Nationals List • Department of State *Debarred Nationals List

  17. Additional Considerations • Sarbanes-Oxley • Foreign Corrupt Practices Act • Anti-boycott Compliance • Other government agencies

  18. Sarbanes-Oxley • Supply chain often overlooked in SOX reviews • Procedures • Detail, detail, detail: documentation, record-keeping, classification, origin information, valuation, choice of providers/carriers, packing, marking and labeling, etc. etc. • Anything with financial consequence • Connectivity within the company

  19. Foreign Corrupt Practices Act (FCPA) • Contracts and sales with foreign governments • Personnel awareness and training • Fines and penalties (bad publicity) • Include service providers in audit trail

  20. Anti-boycott Laws • Adopted to require U.S. firms to refuse to participate in foreign boycotts the U.S. does not sanction. • Primary focus is the Arab League boycott of Israel. These laws affect all U.S. persons including individuals and companies located in the U.S. and their foreign affiliates. Laws cover U.S. exports, imports, financing, forwarding and shipping. • The government has a procedure for reporting boycott requests.

  21. Compliance Management • Senior Management Support • SOP Development • Assessment • Point Person • Training & Education • Work with Knowledgeable Service Providers • Resource Development

  22. Senior Management Support • Conveys commitment to compliance • Time • Money • Personnel • Company policy • Importance of compliance • No sales contrary to US export regulations • Red flags referred to compliance personnel • Describe penalties

  23. Supply Chain • Sales • Purchasing • Customer Service • Engineering / Research & Development • Traffic • Export Department • Finance • Manufacturing

  24. Standard Operating Procedures • Functional • Job specific • Training • Keep updating

  25. Assessment • Where are we now? • Create action plan • Assign timelines • Assign responsible parties • Monitor compliance program

  26. Point Person • Responsible party • Single “go to” person • Committee format • Get the word out to various departments

  27. Training & Education • Current & new employees • Tailor training for the level of knowledge required • Company intranet • Company newsletter • Update training and SOPs as changes come along

  28. Aligning our Supply Chain with Knowledgeable Service Providers • Broker/forwarder is an extension of our supply chain • Our company cannot be compliant if our service providers are not following the rules! • How do our service providers keep our company updated on changes? • What assistance can our service providers lend in helping our company stay compliant?

  29. Finding & Developing Resources • www.census.gov/foreign-trade • www.bis.doc.gov • www.treas.gov/ofac • www.pmddtc.state.gov • www.export.gov/exportbasics • www.joc.com • www.americanriverintl.com • www.compliancemaven.com

  30. Thank you! Kelly Raia kraia@americanriverintl.com 1-800-524-2493 ext. 6819 1-631-396-6819

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