wesccon 2004 reducing risk through internal training: section 111.28 and the connection between...
TRANSCRIPT
WESCCON 2004
Reducing Risk Through Internal Training:
Section 111.28 and the Connection between In-house Training and the Exercise of Responsible Supervision &
Control
Presented by
George R. Tuttle, IIIGeorge R. Tuttle Law Offices
Three Embarcadero Center, San Francisco Phone (415) 986-8780
Fax (415) 986-0908E-mail:geo.tuttlelaw.com
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WESCCON 2004-Internal Training and 19 CFR § 111.28
Top 5 Excuses Not to Train: “Internal training is
expense!” “I don’t have time to put it
together!” “It takes too much time away
from my staff from writing entries”
“No one else has one!” “I don’t know what to cover”
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WESCCON 2004-Internal Training and 19 CFR § 111.28
Do I really need a training program?
Yes . . . your license depends on it!
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WESCCON 2004-Internal Training and 19 CFR § 111.28
§ 111.28 Responsible supervision. (a) Every licensed broker . . .
must exercise responsibleresponsible supervision and controlsupervision and control . . . over the transaction of customs business . . .
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WESCCON 2004-Internal Training and 19 CFR § 111.28
What is “Responsible supervision and control” ? 19 CFR 111.1
“Responsible supervision and control'' means:
“That degree of supervision and control necessary to ensure the proper transaction of the customs business”
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WESCCON 2004-Internal Training and 19 CFR § 111.28
““ResponsibleResponsible supervision and control” supervision and control” is a subjective test, meaning:
Actions necessary to satisfy § 111.28 will vary depending upon the circumstances Licensed Broker must ensure that employees
provides substantially the same quality of same quality of serviceservice when handling customs transactions that the broker is required to provide.
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WESCCON 2004-Internal Training and 19 CFR § 111.28
Factors Customs will consider include:
The training provided to employees.training provided to employees. The issuance of written instructionswritten instructions and
employees guidelines.employees guidelines. The volume and type of business. The reject rate for entries. Maintenance of current editions of:
The Customs Regulations The Harmonized Tariff Schedule, and Customs issuances (rulings, informed
compliance publications, Directives, etc.)
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WESCCON 2004-Internal Training and 19 CFR § 111.28
More factors to consider: Availability of a licensed
broker for consultation with employees;
The frequency of supervisory visits of an individually licensed broker to another office;
The frequency of audits and frequency of audits and reviewsreviews by an individually licensed broker of the customs transactions handled by employees
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WESCCON 2004-Internal Training and 19 CFR § 111.28
Customs Oversight & Audit Activities
Port activity level varies, but all say they have a program
Brokers selected for review based on:
Reject rates Identified compliance issues Random/ judgmental
selection Importer complaints
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WESCCON 2004-Internal Training and 19 CFR § 111.28
Audit Review Areas: Broker filings
Triennial Reports & Employee lists
Notification of change of business address, organization, name, or location of records;
Financial reporting & client $$$ Relations with unlicensed
persons or disreputable persons Customs Transactions &
Procedures review
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WESCCON 2004-Internal Training and 19 CFR § 111.28
Customs primary broker management tool is the Port Activity Tracking System (PATS) which contains the following modules:
Broker Licensing and Permit Tracking Entry Rejections / Miscellaneous Forms Customs Forms (CF 28, CF 29, CF 4647 & CF 6455A) Informed Compliance Log and Notice National Enforcement Tracking System Reports and Queries
A broker’s CM rate is obtained partially from Customs Automated Port Profiling System (CAPPS). CAPPS contains data on the compliance or non-compliance of lines, which are designated by ACS as stratified compliance lines
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WESCCON 2004-Internal Training and 19 CFR § 111.28
Common Errors No or invalid Power of
Attorney Failure to maintain
conditions of license or permits
failure to account for clients' funds
misrepresentation of services rendered
Failure to file SILs and PEAs
late files and late payments
Classification mistakes Quota/visa errors Clerical errors:
Transpose value Quantity errors Improper currency
conversion “dropping invoices” Line item addition errors
Missed protest filing dates
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WESCCON 2004-Internal Training and 19 CFR § 111.28
Customs resolves most broker § 111.28 issues through warning letters and face to face meetings
But what about customers? Broker errors and mistakes
cost clients money create bad customer good will Loss of growth and business
opportunity
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WESCCON 2004-Internal Training and 19 CFR § 111.28
Development of in-house training and Procedures produces favorable ROI because
Reduce / eliminate errors
Reduce employee turnover
Improve client confidence
Supports increased business
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WESCCON 2004-Internal Training and 19 CFR § 111.28
Essential to “good” broker practices and the exercise of responsibleresponsible supervision and supervision and controlcontrol under §111.28 are Employee Guidelines & Desk
Procedures
Standard Operating Procedures
Formal Training Programs
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WESCCON 2004-Internal Training and 19 CFR § 111.28
ResponsibleResponsible supervision and control supervision and control also requires: Internal oversight of employee activities Self-audits & document reviews Documentation of reviews & findings Corrective action plans Follow-up
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WESCCON 2004-Internal Training and 19 CFR § 111.28
Where to Start? Review regulations and legal requirements Obtain compliance info from Customs and clients Conduct a risk assessment Identify possible high risk/ problem areas Develop targeted training and procedures Need Ideas? Look at Customs’ Broker
Management handbook on web @ http://www.cbp.gov/linkhandler/cgov/toolbox/legal/directives/broker_handbook.ctt/broker_handbook.pdf
Consider asking local attorneys for free or low cost risk analysis and in house training/ seminars