Compliance Issues

Purchasing

Integrating trade compliance into buyer and purchasing processes can drastically reduce risk.

In an environment of just-in-time production, lean supply chain schedules, and single source vulnerabilities, a single trade compliance mistake can have catastrophic effects. Given the significant number of foreign trade compliance issues, purchasing is a prime source of compliance risk.

Purchasing needs to be concerned that they have the processes and technologies in place to ensure buyers best serve corporate needs while staying on the right side of the laws and regulations designed to protect the interests of the United States and its allies:

  • Can you legally purchase from the selected vendor and use the proposed trade chain partners? When was the last time these entities were vetted against relevant government watch lists:
    • U.S. Treasury Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN)
    • Department of Commerce Bureau of Industry and Security (BIS) denied persons, unverified and entity lists
    • Department of State Directorate of Defense Trade Controls (DDTC) debarred and nonproliferation sanctions lists?
  • If the vetting takes place too late in the cycle, what's the impact on critical delivery times?
  • Have the goods been classified for import purposes? Have there been any recent rulings? What's the duty and tax impact? What difference does a free trade agreement certificate make?
  • What's the origin impact on the FTA certificates you offer your customers? Will the goods need to be segregated in inventory?
  • Are the goods subject to import controls?
  • For imports of military goods is an export license required? Are there available license exceptions or exemptions? Is there room on the license?
  • Is the country of origin or export subject to sanctions or embargoes?