Many companies have been receiving informed compliance letters from Customs and Border Protection (CBP) or calls from the Bureau of Industry and Security’s (BIS) Office of Exporter Services for an ‘outreach’ visit. Even if your company hasn’t been contacted recently, you should keep your trade compliance house in order as if you expect it.

The inquiry from CBP or BIS will usually include references to specific shipment declarations or goods declared with high dollar volume. Even if they identify just clerical errors in your declarations, what they are also trying to determine is if your company has a solid compliance program in place. You might be able to sufficiently explain data anomalies to the government agent but the errors could reveal a multitude of underlying issues. Every trade compliance professional should know their company’s high risk compliance areas but there are some often ignored areas that can still lead you into big trouble.

The following are some of the compliance areas that are commonly overlooked:

Recordkeeping. We are continually amazed at how poorly some companies maintain their records or don’t maintain them at all. Many companies rely on their forwarder or broker to store their records. U.S. import and export regulations require all importers and exporters to maintain their own records and be able to retrieve them in a reasonable amount of time. So, you can’t rely on the forwarder or broker. Also think about the records that your broker and forwarder wouldn’t have access to that would be important in a government inquiry such as copies of your CCATS, Administrative Rulings, end user statements, valuation calculations, etc. If you are unable to produce records requested by a government agent, recordkeeping penalties might only be the beginning of your problems.

Lack of training. BIS and CBP are not going to be impressed if an error is found in a transaction and your company’s excuse is that the person responsible was not properly trained. Regulatory trade compliance trainings are important but making sure your personnel understands how to follow written procedures related to trade compliance activities is imperative. Training is often overlooked as a priority because it can be expensive and time consuming. However, the expense of a government investigation and resulting consent agreement or remediation plan will be much greater and much more disruptive to your company.

Reporting Requirements. Even if your compliance ducks are in a row for the transactions selected by the government agent, there could be underlying reporting requirements related to those transactions that were ignored or forgotten. Your company might be subject to reporting requirements related to areas such as antiboycott requests, exports of encryption items, Wassenaar Arrangement reporting under EAR §743.1 or use of the VEU license exception. Make sure these reports are readily available if requested by the government agent. Keeping a compliance calendar will help you remember to file these reports and not get behind.

Routed exports. Errors in routed export declarations can come back to haunt you. Many companies do not insist on a copy of the EEI from the FPPI’s agent in a routed transaction scenario. It’s actually a responsibility of an authorized agent per CFR part 30.3(c)(2)(iv) to provide you with a copy when requested. Since your company as the USPPI is responsible for providing the compliance related information for the EEI, you could be on the hook for an uncompliant export. The authorized agent should be contacted if errors are found on the EEI and you’ll need to request an updated copy once the corrections are made. You should also audit for routed transactions to make sure they are appropriately flagged and do not erroneously show up in your ACE – 202 USPPI transaction report.

Antidumping & Countervailing Duties (ADD/CVD). There has always been enforcement around ADD/CVD orders but there will be additional scrutiny later this year. On March 31st, 2017, President Trump signed an Executive Order to develop new CBP risk assessments for identifying importers that are possibly evading ADD/CVD payments and to increase enforcement actions. These plans will be established within 90 days of the Order so expect CBP to start taking action as early as this Summer. To assess whether your company has been paying ADD/CVD, run an ACE report of your imports and see if ADD/CVD entry type 03 has been used. Also use the U.S. International Trade Commission’s website to identify ADD/CVD orders and compare the commodity type and HTS numbers against your own imports.

Technology Control Plans (TCP). We find many companies do not have technology control plans in place when they should. TCPs are not just for high tech companies but for any company that has controlled technology such as chemical, pharmaceutical and materials companies. If your company does not have a TCP in place, it could indicate a lack of proper controls that would protect controlled technical data from unauthorized access by foreign nationals. In today’s world of cyber threats and hackers, it’s imperative that a company properly protect its controlled technology and intellectual property from competitors. But a security breach could also get your company in hot water with the government for an unauthorized export or deemed export of controlled technology. Government agents will want to know if there are foreign nationals at the locations where your controlled technology is used and stored. So, stay ahead of the game and make sure you have a TCP in place and that it’s up to date.

These are examples of compliance areas are often forgotten or put on the back burner. Realize though that they can rear their ugly heads in the case of a government outreach exercise even if there’s no mention of them in the initial contact with the government agent. Your call to action is to make sure you are ready when enforcement officials come knocking and to stay on top of all areas of compliance, not just the high risk ones.

As always, BPE Global is ready to assist you in any capacity. You can find us on Twitter (@bpeglobal) or follow us on LinkedIn where we publish topical opinions on the ever-changing rules and regulations governing the landscape of global trade.

BPE Global is a global trade consulting and training firm. Julie Gibbs is a Director of BPE Global. You can reach Julie by email at jgibbs@bpeglobal.com.