Tax & Accounting Blog

Training: The Umbrella of Compliance

Blog, Checkpoint, Global Trade, ONESOURCE September 1, 2017

When it comes to International Trade, the future is coming on fast—but the apt metaphor is not so much a bullet train cruising forward on a safe track, but rather a crowded Formula 1 race through mountain roads, with unforeseen twists, bends, dips, treacherous and unpredictable conditions, and more than a little fog.  Increased government warnings, fines, export violations, and other expensive and embarrassing regulatory enforcements are becoming increasingly more common and severe as the national security consequences for unsecured supply chains grow increasingly more serious. Meanwhile, disrupters such as process automation and the growing spectre of protectionism result in a changing and unpredictable regulatory landscape.

In times like this, a commitment to global trade compliance is rapidly becoming less a matter of corporate strategy and more a matter of basic survival. But what is ‘compliance’?

Though a firm definition of ‘compliance’ can be difficult to draw out of government agencies, it’s not too hard to land on a working definition: Compliance represents the holistic application, throughout your organization, of practices, procedures, tools, and processes, which make adherence to the totality of your responsibilities under global trade law not only likely, but inevitable.

This may be easy enough to say; putting it into practice is the tricky part. First, we should get a working definition of what these practices, tools, and procedures might be. If we study the U.S. Customs and Border Protection Focused Assessment checklist (to name just one of many possible resources) we’ll build a powerful list: policies and procedures manuals, statements of ethics and corporate objectives, valuation best practices and documentation, vendor and service provider management SOPs, best practices for recordkeeping, classification, export licensing and FTA management, to say nothing of management of risks such as antidumping or intellectual property infringement … the list goes on. It’s a large list—daunting, perhaps, but necessary to fulfill.

Yet imagine you’ve accomplished all this— you’ve secured corporate buy-in, built your policies and procedures manuals, engaged in the painstaking work of integrating best practices into your existing systems, of building new tools and systems to accommodate your best practices—or perhaps even purchasing new systems and solutions to automate many of them to an even higher degree of effectiveness and efficiency.

Job well done!  And, also… not so fast.

Even with all this complete, you have not yet made adherence to global trade law inevitable. Everyone still needs to know about it! Your people need to be told what you’ve put into place, and understand exactly where and how they fit in—and they need to make sure that to refresh on a regular basis, both to remember the details through repetition, and to ensure they keep abreast of ‘the curves on the road,’ as the regulatory environment changes.

Training is the ‘umbrella issue’ of compliance; it’s the one component most crucial to a working program, because it’s the one that allows everyone to know what actions to take within a compliant organization. It touches on every aspect of compliance, because every aspect requires organizational awareness and understanding.

Unfortunately, training is often one of the most overlooked aspects of compliance, and it’s not hard to understand why. Training occupies the awkward territory of being important but not urgent. A commitment to training can be disruptive to productivity, requiring complex coordination to move employees in and out of sessions without suffering downtime, or else suffering a total shutdown for hours or even days, in order to bring everyone into full awareness. In-house training can alleviate this conundrum somewhat, but frequently ‘in-house trainer’ is simply another task added to the existing duties of an already overburdened compliance professional.

There are, of course, solutions. Sometimes a trainer will get buy in to make their training duties a full time position. Sometimes a trainer will attempt to solve the problem by seeking outside help, such as in-house training from a consulting company, or by making use of free or paid webinars, or by purchasing an online solution.

Whatever choice a trade compliance trainer makes, they’d do well to make sure their solution has the following attributes:

Applicable. You’ll want to be sure you have the ability to tailor your available curriculum to be relevant to each student. You don’t want to choke someone in purchasing with information about what needs to be done in the warehouse, for example.

Comprehensive. Your compliance tools and processes should contemplate the totality of your organization’s regulatory responsibilities. So should your training. Make sure there are no gaps in the learning roadmap.

Flexible. One of the best ways to get buy-in for your training program from the front office is to let them know it won’t impact the bottom line. A flexible delivery platform allows your students to study at a time that is convenient to them—and conducive to the timely completion of their other duties.

Accessible. It’s not flexible training if you can’t get there. For in-person training you’ll need to get buy-in for travel or make use of telepresence technology. Online platforms enjoy growing popularity as a delivery method for both in-house generated and purchased content. Also work with your IT department to make sure your materials are accessible on internal networks.

Quantifiable. Your training won’t be as effective if you can’t ensure it’s been done and you can’t measure student comprehension – especially if you need to prove the training occurred when you’re in an audit situation! Be sure you have some sort of methodology to define who studied what, and demonstrate how well they understood—and to capture and save that valuable information.

Sustainable. We’re back to where we started: the future of trade regulation is unpredictable and faces potentially great and ongoing change. Whatever program you implement should include coursework that is subject to regular review and update, and should allow students to return frequently to the material to refresh.

Compliance is achievable at a cost, but the risks of non-compliance make that cost a no-brainer to pay. Just be sure that you include effective training when you assess that cost—or you may find you’ve paid the price without collecting the benefit.

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