While accurate record keeping might seem an obvious goal for companies with an international supply chain, it remains astonishing how many millions of dollars companies forfeit every year in fines and duty drawback due to flawed, missing or improper record keeping. Adding to the problem, the landscape of compliance while normally complex enough, is a moving target in a world of international sanctions, tariffs, and changing export regulations managed by a dozen different government agencies. For these and other reasons many companies consider this “the cost of doing business” and simply plan for it in their budgets. Yet these duties can represent up to double digit percentages of product value, seriously impairing the bottom line and their competitiveness in the marketplace.
There’s Some Low Hanging Fruit
If you’re a company keeping its compliance in-house, we understand your challenges. For too many companies with limited internal staff and expertise, it becomes a case of not knowing what you don’t know. Here are a few basic things that can help you avoid the most common difficulties companies face when trying to realize the full measure of duty drawback they are entitled to.
- Maintain a clear and well documented import history – Know all of the import transactions that cost you duty for products you subsequently exported or destroyed. This data must include the specific import entry data fields required: fields you may not have even have available in your company’s ERP system. This means you will have to go to the hard copies or sometimes a third-party database.
- Maintain a clear and well documented Export history – Know all of the export transactions representing the items (either in their original state or as part of a finished good). Again, this must contain all the required data fields, which you may need to consult hard copies to get.
- Don’t forget to keep good disposal records for any destroyed product.
- Provide a periodic demonstration of your company processes related to supply chain management. This gives Customs confidence that the export/disposal data really represent the original imported goods. Remember – you likely export product codes that do not match what you imported, and you must show that the export/disposal occurred within the legislated time frame allowed, after importation.
- Make sure you use the mandated U.S. Customs forms and templates, even if you think yours are better.
How to Know What You Don’t Know
The challenge in managing customs reporting for many companies is simply that they don’t know what they don’t know. That translates into fines and lost opportunities in duty recovery. For most companies, the money paid to 3rd party customs brokerages is a fraction of the cost of developing this competency in-house, and sustaining it over time through changing rules and regulation. JM Rodgers can take the burden off global manufacturers and become trusted partners in the administration of systems and structures that get this done right, every time.
For more information, please call the team at JM Rodgers today.