Integrated Trade Compliance Strategy Presentation October 2010

The Case For An Integrated Trade Compliance Strategy Reynold Martens Executive Vice President GHY International President, GHY USA

Context
“ Manufacturing not what it used to be”
Global forces intensifying competition
Supply chain/markets diversifying beyond US
Complex new mix
Origins, manufacturing locations, destinations
Importers and exporters under surveillance 24/7
Compliance = price of admission to global trade
Non compliance increasingly costly
Lost opportunities, margins, penalties, reputation

Our Thesis
Are international traders adapting to new trade reality?
Compliance outsourced or compartmentalized
Import and export functions internally are often “silos”
Trade related financials have limited corporate visibility
Regulatory interventions force executive focus
End result is clear audit trails and accountability
Integrated cross-functional approach reduces exposure
End game: reduce risks & maximize opportunities
Cost of reacting is more than a taking a proactive stance

Outline
Overview Canada’s shifting trade dynamics
Canadian compliance landscape
The problem with “silos”
The solution: An integrated approach
Building an integrated trade model
Overview a sample plan
Summary

Canada: Trade Volume Index

Canada’s International Import Sources 2009 Imports: $365.2 billion Data Source: Industry Canada, Trade Data Online , June 2010

Canada’s International Export Destinations 2009 Foreign Merchandise Exports: $334.6 billion Data Source: Industry Canada, Trade Data Online , June 2010

North American Supply Chain

Trade/Compliance Intersections
Global perspective: flow model from 30000 feet
Regulatory intersections create compliance implications
Global sourcing and marketing increases risk
Customs regimes enforce all trade-related laws
Tariff, value, origin just the beginning
Other government departments piggyback Customs
Product design-performance standards,
Consumer Safety
Quota Management,Permits, Licenses
Security Screening, Patents, Labeling-Packaging

CBSA Compliance Objectives

CBSA Audit Trend

Current Model

Product Design Production/Manufacturing Global Sourcing Supply Chain/Logistics Shipping Human Resources Information Technology Assets & Liabilities Cash Flow Management Regulatory Compliance Risk Management Financial Report Administration Domestic Sales International Sales New Export Markets Contract Negotiations Contract Management Sales Administration Marketing CDN Customs Broker US Customs Broker Trade Services CDN Auditors US Auditors Legal Services Finance Services Current Model

Minimize Risk Optimize Opportunity Integrated International Trade Strategy Predictable Compliant Sustainable Service Providers ·Legal ·Financial ·Trade ·Customs Integrated Model

Minimize Risk Optimize Opportunity Integrated International Trade Strategy Predictable Compliant Sustainable Service Providers ·Legal ·Financial ·Trade ·Customs Integrated Model enterprise performance enterprise expansion enterprise risk/liability accountability framework

Minimize Risk Optimize Opportunity Integrated International Trade Strategy Predictable Compliant Sustainable Service Providers ·Legal ·Financial ·Trade ·Customs Integrated Model key performance indicators KPI strategic planning expansion assessment partnerships, acquisitions enterprise risk assessments executive team leadership budgets, revenue projections

Minimize Risk Optimize Opportunity Integrated International Trade Strategy Predictable Compliant Sustainable Service Providers ·Legal ·Financial ·Trade ·Customs Integrated Model business plan execution P & L --financial performance risk management and reporting strategic plan execution management team leadership

client qualification and negotiation
contracts/purchase orders
product design, packaging, labelling
product licensing, patents, trademark rights
related/unrelated parties valuation
importer of record determination
currency of settlement
financial terms, instruments
global tariff classification, origin
logistics-supply chain management
supply chain security reporting protocols
customs clearance and reporting
OGD special requirements
regulatory intervention management

Minimize Risk Optimize Opportunity Integrated International Trade Strategy Predictable Compliant Sustainable Integrated Model Service Providers ·Legal ·Financial ·Trade ·Customs
client-lawyer privilege situation
client-vendor disputes
regulatory interventions/audits
intellectual property/licenses, trademarks
proprietary information breaches
appeals
lawsuit- pursuit/response
international financing
international credit instruments
insurance in transit, cargo, receivables
foreign currency exchange facilitation
foreign currency exchange hedging/contracts
regulatory bonds and sureties
domestic/foreign tax strategies
domestic/foreign tax preparation
international/domestic tax representation
internal audit corporation, branches, subs
valuation formulae and transfer pricing
international /domestic trade audit trails
regulatory appeals and tax rulings
global sourcing assessments-regulatory impact
global market assessment-regulatory impact
free trade agreement assessments/application
landed cost assessment imports/exports
importer of record representation to regulators/OGD's
import database creation by product-tariff, valuation,origin
customs clearance, reporting, financial settlement
importer of record bonding, surety
Customs/OGD appeals and rulings

Summary
Intensifying trade complexity –supply chains & markets
Increasing regulatory surveillance and intervention
Compliance is a competitive weapon
Integrated approach addresses gaps presented by silos
Increased visibility and shared ownership reduces risk
Maximize commercial opportunity and profitability
Minimize downside risk that erodes margins
Grow your business!

More Information
Reynold Martens
Executive Vice President
GHY International
204 947 6700, ext 286
[email_address]
White Paper: “Why Trade Compliance Matters”
Sample Compliance Responsibility Matrix
Sample Compliance Manual

Integrated Trade Compliance Strategy Presentation October 2010

by GHY International

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Integrated Trade Compliance Strategy Presentation October 2010 Presentation Transcript