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Editor's Viewpoint

Putting Customs On the Corporate Map

by Fred Moody

With the widespread change in the field of customs the shape things take in the next decade is difficult to define, but based on LQ’s Customs Report, featured this issue, and listening to a few of the keynote speakers at The Canadian Institute’s third annual Customs Compliance Conference, it’s clear that companies need to act quickly because many are unprepared for what is ahead in their trading practices.

The future is at least guessable based on a view of key trends that are emerging in the industry as noted in this issue by CSCB’s President Carol West in her article about customs becoming part of the world’s trade agenda at the World Trade Organization. Schenker Stinnes’ Vice President Keith Hart provides valuable insights about the future implications and importance of classification, assessment and managing import programs. Manager John Brooks of Russell A. Farrow focuses on the critical need to correctly assess the value of goods imported into Canada as customs duty and the Goods and Services Tax (GST) are predicated on such assessments. Unicity Vice President Bruce Johnson’s insightful article about the Administrative Monetary Penalty System, as well as the account provided about risk management and corporate customs policies by Fritz Starber Vice President John O’Brien, are rich with information. LQ’s Customs Report also features PBB Executive Vice President Tom Mountain, who provides a comprehensive overview about trends and trading in 2000. (We also have an informative customs newsletter included in each issue of LQ.)

The overview afforded by our Customs Report shows in the midst of freer trade and duty free environments there is irony in that executives at the most senior level of Canadian companies will soon need to understand the nomenclature of customs, never mind procedures. In fact, customs will likely take on the same stature as the corporate tax department. Based on our editorial contributors, aligning a Canadian company for customs compliance is not a simple matter, although some would argue otherwise. However, a lot of companies in Canada and the United States are unaware and not prepared to respond to the array of new requirements recently downloaded to the private sector by Canadian and U.S. Customs. Many companies in both of these countries are continually noncompliant throughout their supply chain, largely because of this lack of awareness.

Acquiring the “buy in” of executives at senior-level is a first step and likely to take some cogent presentations by managers in the field to show the impact customs can have on corporate profits. Providing a pre-audit evaluation, risk analysis, as well as involving other professionals in other departments are essential ingredients to ensure senior management ranks customs as a top priority on the corporate map.

It is also vital that logistics professionals go beyond their own company and examine the dynamics their firm has with others. A company may have an excellent customs compliance program but what if the carrier it uses lacks such a program? Due diligence and accountability throughout the supply chain, knowing your trading partners’ policies and outstanding record keeping are just some of the primary points the experts consistently point to as essential.

In this issue, in addition to our regularly featured roster of outstanding columnists, I am pleased to announce we will be working with an executive from Customized Transportation, Inc., a company that was first featured in the June/July 1999 LQ cover story about DaimlerChrysler’s logistics solution. Mark Morrison, Vice President, Customized Transportation, Inc., makes his initial contribution this issue (page 11), and will be featured regularly as a columnist in LQ.

Next issue, we will be also introducing at least two new columnists, one of whom is an executive director at one of the country’s top freight forwarding organizations and the other an executive whose company ranks as one of the top e-Business firms in the world.