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Executive Perspectives: Minimizing Import and Export Compliance Risks



Adrienne Braumiller of Braumiller Law Group, PLLC, a law firm attending the marcus evans Chief Litigation Officer Summit Fall 2014, will speak on the topic of import and export compliance risks that companies may be exposed to.

NEW YORK, NY, Aug 27, 2014 - (ACN Newswire) - "Frequently companies do not have the necessary import and export compliance procedures in place, including some well-known publicly traded companies. In many cases, even if they have internal controls, they are often outdated or not being followed," according to Adrienne Braumiller, Founder, Braumiller Law Group, PLLC.

As a law firm participating in the marcus evans Chief Litigation Officer Summit Fall 2014, taking place in Palm Beach, Florida, September 14-16, Braumiller gives Chief Litigation Officers advice on minimizing compliance risks that may remain undetected for years.

- Do companies recognize the risks associated with lack of import and export compliance measures?

Many companies do recognize the risks, but do not effectively try to minimize them. Often we find that they may have completed an internal review where several weaknesses and concerns were identified, but they did nothing with the results. Sometimes this complacency is due to some other pressing matter taking priority, and other times it is due to a lack of understanding or resources needed to make process improvements. One powerful tool to help mitigate and clean up past violations is through a voluntary disclosure. The government highly encourages voluntary disclosures, providing a waiver of penalties on the import side and at least a 50 percent reduction on the export side.

- Why are some companies unaware of their import and export activities?

One of our clients, a large multinational company, told us: "We do not import". We checked their tax ID history and it turned out they had many imports that no one was aware of. There was no visibility and no control over those activities. It was just different people within different business units importing via one of the express couriers. No one thought that these types of shipments were even considered an import.

Another client was unaware that its company routinely took advantage of the North American Free Trade Agreement (NAFTA). To avoid additional risk and scrutiny involved with bringing in goods duty free pursuant to this free trade agreement, its policy was to avoid claiming NAFTA. In fact, a review of the import history showed the company was claiming NAFTA for 90 percent of their shipments. How could this happen? The agent clearing shipments on the company's behalf (known as a Customs broker) made the assumption that the company wanted to claim NAFTA simply because the goods were being imported from Mexico. Customs considers it fraud for an importer to make a claim without a NAFTA certificate of origin from the supplier, but if there is no communication with the broker, it can happen very easily.

Penalties are based on culpability and can be up to the domestic (wholesale) value of the product, not what was paid for it. If the person receiving the entry documents is just filing them away without a post-entry review, violations can go undetected for many years.

The same is true on the export side, although the penalties there can reach millions of dollars very quickly, and even worse, the exporter can lose its privilege to export (as there is no "right" to export).

- What internal controls could minimize this risk?

What is causing this challenge is a lack of effective internal controls, sufficient resources, compliance experts, good record-keeping, and adequate communication between the various departments involved in the import and export processes. The company must create and embed C.O.S.O.-based (Committee of Sponsoring Organizations) controls that improve operational performance and governance, while deterring fraud.

To get the house in order, we recommend obtaining the last five years of import history from Customs and the export history from the U.S. Census Bureau. A lot of that information is in databases that are not overly user-friendly, but we have developed a tool to slice and dice the data to identify where the risks lie. There can also be a complete gap in the company's processes for obtaining records, another high-risk area subject to stiff fines. Once a company has the necessary visibility into import/export activities, it can identify the processes needed to help ensure compliance requirements are met. Starting with a robust compliance program focused on U.S. requirements is usually the best approach, followed by the addition of other regions and countries based on level of activity or risk. If the company is in acquisition mode, it is critical to include import and export due diligence prior to the purchase. Most acquiring companies forget to do this until it is too late and then end up "buying" these liabilities.

About the Chief Litigation Officer Summit Fall 2014

The 14th Chief Litigation Officer Summit is the premium forum for bringing leading in-house litigation counsel across the nation together with service providers. Taking place at the Eau Palm Beach Resort & Spa, Palm Beach, Florida, September 14-16, 2014, the Summit includes presentations on privacy and social media, alternative approaches in litigation, outside counsel management, and making the law department into a profit center.

For more information please send an email to [email protected] or visit the event website at www.chieflitigationofficersummit.com/AdrienneBraumillerInterview

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Please note that the Summit is a closed business event and the number of participants strictly limited.

About Braumiller Law Group, PLLC

With offices in the U.S. and Mexico, Braumiller Law Group, PLLC, is a highly respected law firm focused on international trade compliance and proven strategies to optimize global trade business practices. The attorneys and trade advisors of Braumiller Law Group know exactly how to navigate the intricate maze of global trade regulations, and they have a successful track record for helping clients save millions of dollars in compliance penalties. These clients also leverage the expertise and experience of the Braumiller Law Group team to ensure that their global trade operations are legally structured to maximize efficiency and profitability. Please visit: www.braumillerlaw.com.

About marcus evans Summits

marcus evans Summits are high level business forums for the world's leading decision-makers to meet, learn and discuss strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to individually tailor their schedules of keynote presentations, think tanks, seminars and one-on-one business meetings. For more information, please visit www.marcusevans.com.

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