Back in March 2015, we published a quiz on calculating your international trade compliance score. We are now happy to share the results with you.
220 Companies completed this 20-questions quiz and the results are summarized below.
1. Management commitment: Only 63% said that their upper management supported their trade compliance program.
2. Responsible organization: 72% had a trade compliance department or a designated person for import-export questions.
3. Written Procedures: Slightly more than half (55%) had a written and up-to-date international trade compliance manual.
4. Training: Almost 40% said that they did not receive any annual training.
5. HTS Classification: 57% of the companies believed that their products were properly classified with the correct 10-digit Harmonized code but 1 in 5 companies said that they had been using the same HTS codes for the last 5+ years.
6. Customs Valuation: At least a third of all companies surveyed were not confident that they were providing the accurate value for commercial as well as non-commercial items (samples etc.).
7. Related party transactions: Over 40% were not confident that their imports from related entities were valued on an arms-length basis.
8. Post-entry audits: Only about half of all the companies revealed that they review their import entries & export filings for accuracy.
9. Records management: Majority (68%) save the required import and export documentation for 5 years.
10. Supply Chain Security: Less than half had taken all necessary steps to implement a cargo security program such as C-TPAT.
11. Country of origin marking: Very high numbers (78%) stated that their imports were marked with the correct country of origin. Interestingly, as high as 10% erroneously mention the country of export as the country of origin.
12. Periodic audits – Not even half of the companies who responded performed internal or external audits of their compliance operations at-least once a year.
13. Duty-minimization strategies – Slightly more than half (54%) said they were participating in lawful duty reduction programs (i.e. duty drawback, FTZ or FTA).
14. Disclosures: More than a third said they did not have a process to submit voluntary disclosures to the relevant government agency, in the case of violations.
15. Customs duty expense: A third were not aware of the amount of customs duties that they were paying in the USA and worldwide.
16. Export Control Classifications: Barely half said that they had an updated list of ECCN numbers for their products.
17. Export Licensing: Only 71% had verified whether they needed an export license to ship their products internationally. 10% said that they had not reviewed their licenses in 10+ years!
18. Deemed Exports: Only 57% had verified that their technology did not have any “deemed export” license requirements, when they employed foreign nationals.
19. Restricted party screening: Slightly more than half (55%) had controls to ensure that their products were not destined for a restricted end-user or embargoed country.
20. Audit Readiness: Only 35% felt confident that their company could pass an Import or Export audit.
If you want to do a quick self-assessment to find your company’s trade compliance score, we invite you to take the quiz. If you need any assistance or guidance to improve your compliance score, please let us know.