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 Growing Global Post 9/11 Compliance is here to stay By Neil Lenok Managing Director American River International The business world has changed greatly since 9/11/01. As business travelers, we are all aware of the onerous procedures (not to mention jumpy nerves) we endure just stepping on an aircraft to see a client. Now we also have to face similar arduous processes in our businesses, if we import or export due to heightened compliance initiatives. Every pet manufacturer who sources product overseas… or… sells in export markets will have to pay attention to the new compliance and security rules which will greatly affect their supply chains. APPMA members who take a proactive stance in understanding the compliance and security issues and deal with them positively and upfront will be better able to control costs and have the most competitive import and export programs. The Department of Homeland Security was formed after the terrorist attacks on the Twin Towers. U.S. Customs and Department of Immigration and Naturalization were merged under the auspices of the Department of Homeland Security and is now called Bureau of Customs and Border Protection (CBP). One of the first charges given to Tom Ridge and his new department was to protect our borders from the potential threat of a terrorist attack in the form of a dirty bomb or nuclear weapon carried, perhaps, in an unsuspecting ocean container ostensibly filled with dog toys from China. Out of the millions of ocean containers that enter our ports on a yearly basis, only about 2% go through a physical inspection! The challenge faced by Secretary Ridge was how to mitigate the threats posed without disturbing the flow of commerce. The challenge was answered in the form of The Container Security Initiative (CSI). The premise of this act is to determine how we can extend our borders for imported goods to the point of origin as opposed to the point of destination. There are a number of initiatives that have been put into effect under CSI over the past two years; but one of the most successful is Customs-Trade Partnership Against Terrorism (C-TPAT). C-TPAT is to importing what the HOV lanes are to rush hour auto traffic. The concept is to reduce the need to physically inspect containers upon entry into the U.S. by proactively certifying the security measures of the exporting (vendor) company overseas. This is accomplished through a process of questionnaires sent to overseas suppliers of U.S. importers to discern their security procedures and a number of other procedures. The folks at the Department of Homeland Security have made it known in the import community that if we are hit by another terrorist attack, and the borders are closed (be it for one day or one month), the first group of imports to pass through our borders will be those for approved C-TPAT importers. While there is a cost associated with the C-TPAT process (as most companies utilize third party help), the costs that can be associated with goods stuck at the border for an extended period of time due to not being an approved C-TPAT importer pale in comparison. Since the C-TPAT program was opened in early 2002, close to 1500 U.S. based importers have been approved for the program. While the program is completely voluntary, the larger importers have been “invited” to enroll. If a company receives an “invitation” to enroll from CBP and does not respond they are looked upon unfavorably. The issues highlighted in this article are only a few of the import/export supply chain initiatives to which APPMA members should pay attention. Being proactive is a much smarter and more cost effective option then being reactive. |
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