(1) An adapted organizational Structure
A committee of customs and trade compliance management will oversee the effective running of ICP in the company. Appoint a dedicated ICP lead who has complete oversight of customs and trade regulations and compliance performance. It is also essential that the highest-ranking executive in the firm to be part of this committee together with other senior executives from the legal and operations departments.
(2) A reliable transaction verification process
This is the most important component of any ICP - establishing a comprehensive set of operating procedures to ensure all customs and trade declarations are accurate and in accordance with local and international rules and regulations. Procedures should cover valuation, classification and import/export permit requirements of all customs and trade transactions for both internal operations as well as sub-contractors, logistics partners and distributors.
(3) Shipment monitoring procedures
Strong control in customs and trade declarations that meet all relevant regulations, and safeguards to ensure physical shipments are handled in accordance with all customs and related regulatory requirements are equally important as part of your ICP. Having a set of operational procedures can help your internal team and logistics suppliers to proactively monitor, with full visibility, the flow of shipments around the world. It is also essential that you have an effective recovery plan in case of any deviations during transportation.
(4) Regular supply chain compliance audits
Beyond the implementation of these operating procedures, companies need to carry out internal audits on internal entities as well as external partners by an independent external party at least once a year. These audits ensure customs and trade compliance management is being properly implemented in accordance with the ICP. Regular audits are also useful in ensuring the ICP is up-to-date with regards to the latest changes in regulations around the world.
(5) Reporting and Corrective Action Plans (CAPs)
Ensure your ICP committee reviews these audit reports to spot any issues and gaps that have been identified during the audit. This also means opening channels for auditors to report any issues to ICP committee members immediately. A voluntary self-disclosure may be required depending on the nature of the issues. In addition, any regulatory violation that calls for immediate rectification also means Corrective Action Plans (CAPs) will be required from the relevant department where the non-compliance is found.
(6) Company-wide compliance training
Up-to-date training for all employees is essential not only for new hires but existing employees to ensure the entire organization fully understands the latest control procedures and regulatory changes, as well as any implications for non-compliance.
(7) An efficient record retention system
Lastly, all customs and trade transactions and supporting documents must be archived and stored for a fixed period of time as stipulated under local laws. Companies must check if these records can be stored electronically or in hard copy in accordance to related statutory requirements in each country. Additionally, companies should ensure that they implement a record retention system with data retrieval and backup capability.