Indirect Tax Conference Developing your Customs Function

Transcription

1 Indirect Tax Conference Developing your Customs Function 14 November 2014 Caroline Barraclough Riya Rajan

2 Session Overview 1. Setting the scene - why is customs management important? 2. What is an Internal Compliance Programme for Customs and why is it important? 3. Customs Management in your ICP? People Process Technology 4. Enhancing your ICP / Benchmarking 2

3 Why is it important? 3

4 Why Effective Customs Management Matters Who is Affected by Customs Issues? All companies engaging in any import activities across almost every industry. Legal, Financial and Reputational Risk Legal Financial Reputational Threat of legal action based on lack of compliance, undeveloped processes and limited management oversight Due to customs &excise levels, the financial impact in getting it wrong can be significant (loss of authorisations, change in guarantee levels, fines etc.. What is the impact from a reputational perspective and how can this be managed? Focus on responsible tax Deloitte LLP. Private and confidential.

5 Why Effective Customs Management Matters International Trade Challenges Global Sourcing / Supply Chain Revenue growth through new products and markets Reduce landed costs Just-in-time inventory management Tax and Trade-Aligned Supply Chain Manage complex compliance operations Manage warehousing / distribution structures Trade Finance Trade Regulatory Compliance Economic Pressure & Customer Demands Control flow of funds Reduce settlement times Enhanced reporting requirements Adapt to continually changing environments (e.g. Union Customs Code) Increased risks, penalties, reputational damage Economic downturn Pressure to reduce costs Short turnaround for customer satisfaction 5

6 Why Effective Customs Management Matters Impacts end-to-end Supply Chain Supply Chain & Logistics Physical and container security Prevention of shipping delays Final point check Management of forwarders/brokers Supplier accountability Documentation and recordkeeping Export licence verification HR Employee screening Trade compliance induction training IT Data integrity IT security Automated compliance in ERP Systems Access rights Trade compliance intranet pages and databases Compliance with export licensing requirements for software deployment Server locations Legal Contractual obligations Government communication Violations, penalties and disclosures M&A Due Diligence Escalation point Procurement Customs impact built into sourcing decisions and strategy across the business (i.e. goods/freight/promotional items) Supplier contracts include trade terms Vendor screening Secure supply chain partners Trade Compliance Sales & Marketing Import/export considerations when preparing for marketing events Export licensing impact of product information exchange Embargoes & sanctions screening Know your customer screening Incorporating trade impact into pricing strategy (e.g. duty and Incoterms) Anti-boycott screening of contracts Risk/Security Physical and IT security Travel/Hand carry policy Supply chain security audit Finance & Tax Customs valuation Financial/economic sanctions and embargoes screening Payment of, and accounting for, import/export related costs Internal audit R&D / Operations New product classification and licence determination Compliance with export licensing when transferring data/source code/technology and software deployment Import/export of samples, prototypes (inc. assists) and equipment Deloitte LLP. Private and confidential.

7 What is an Internal Compliance Programme 7

8 What is an Internal Compliance Programme? An ICP is a comprehensive framework that establishes the relevant internal controls to support a company s compliance with all applicable customs obligations. An effective ICP: Minimises the risk of non-compliance; Establishes effective control over the movement of goods, people, software and technologies; Provides consistent written instructions to employees, enabling them to blend customs requirements into their daily responsibilities; Protects employees through training and awareness programmes; Provides safeguards throughout a company s supply chain; Demonstrates to authorities a commitment to compliance and acts as a mitigating factor against potential penalties; and Helps you meet requirements of business partners and customers. 8

9 Essential Elements of an ICP Trade Compliance Programme An effective Trade Compliance Programme should include documented policies and procedures, a training programme, accountable roles, and the use of technology to support the establishment of robust internal controls throughout each of the business areas. Trade Management IT systems to manage processes TECHNOLOGY ERP configured to support data requirements Global policies and standards Site-level operating procedures Comprehensive, documented, integrated procedures Monitoring and Corrective Actions PROCESSES Management commitment to Trade compliance Effectively structured and resourced compliance organisation Comprehensive training programme Communication and Escalation Plan Management scorecard PEOPLE 9

10 What should an ICP Include? 10

11 Customs Management in your ICP 11

12 Enhancing Customs Management Key Considerations - People Customs is not a stand-alone responsibility, it requires co-operation between various departments at all levels. Logistics Legal Purchasing Finance Sales Manufacturing Trade Compliance Q. What are your thoughts on where this function should belong and why?

13 Enhancing Customs Management Key Considerations - People Models In-house Dedicated Resource Considerations Availability in the market, where in the business, involvement in key areas Temporary/ Secondee Manage a discrete project or task or provide temporary coverage Cross Functional Management Ultimate responsibility, clear division of tasks, conflicting priorities Outsourced to 3 rd Party Internal responsibility, processes and controls, contractual coverage 13

14 Enhancing Customs Management Key Considerations - People Management of 3 rd Parties Contractual arrangements / Nature of representation Written Instructions KPIs and Management Checks Responsibility for the declaration made HMRC Audits Checks and controls 14

15 Enhancing Customs Management Key Considerations - Processes Defining policies that allow business units to meet their own specific compliance challenges and legal requirements Create or purchase technical guides for all countries of operation to determine all applicable requirements and identify any conflicting laws Clear, documented SOPs that are integrated into dayto-day operations and link across compliance functions All CCNs should be kept in a central database and kept up to date Proactive compliance, not reactive No firefighting! Easy access to documents and tools via intranet Establish an environment where personnel feel comfortable raising concerns and issues 15 Train internal audit personnel to conduct internal ICP assessments regularly or conduct external ICP assessments as required

16 Enhancing Customs Management Key Considerations - Technology Expedite customs clearance Achieve trade and duty data visibility Management of customs regimes Mitigate penalty risks Maintain complete and accurate documentation Benefits of Automation Manage security requirements Full audit trail Manage export controls Trade preference management Create single, centralised platform for trade compliance 16

17 Enhancing your ICP 17

18 Enhancing your ICP Compliance Roadmap 18

19 Enhancing your ICP / Benchmarking Maturity Model

20 Any Questions? 20

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