Interim Strategic Customs Support
We get your processes from A to B. Repairing broken processes or preparing for big changes can require outside help. Our consultant, Jens Stevens, explains about interim strategic customs support in this article.
Can you give us an overview of what interim strategic custom support is?
Interim strategic customs support is the process of improving a company’s efficiency and reducing their risk, getting them from where they are now to a more optimal position. We start with a quick scan, where we assess the blueprint of the company structure, their processes, where their risks are, and what we need to do to improve that profile.
Once we have completed our assessment, we develop strategic goals and milestones with deadlines and assign ownership of tasks, thereby constructing an action plan. We then schedule regular follow ups to discuss the project’s progress, help with any gaps in skill sets, and provide any other support that is necessary for achieving our goals.
Let’s consider a Netherlands based fashion company as an example. How would you manage this project?
Let’s say that they sell their products online and in their own stores, as well as to other retailers and wholesale merchants. A lot of their stock is imported in containers under bond, and it will be cleared from bond or reexported depending on customer orders. The company is allowed to use GPA clearances, where they periodically complete a batch declaration for the sold goods every month.
My role with this company would to be both the customs expert and the project manager. We start with a quick scan, and here find that there is a gap between the WMS [warehouse management system] inventory and the customs system. This would indicate that there is a process failure, and a risk of noncompliance to their bonded requirements.
The first step of the project is to protect future stock movements in and out of bond to ensure that the problem does not compound. Then, we would look at the historical processes to identify barriers and then reconcile the two systems to reflect the correct amount of stock in the warehouse and pay any taxes owed.
Our second goal is to ensure that the company is remaining compliant to their AEO. This includes a broader assessment of their practices and ensuring that the correct actions are being taken at every stage.
The third and final goal for this project is to prepare the company for the move to DMS 4, which will affect their company as the GPA periodic clearances will be processed on that system.
What are the risks involved with this type of example?
If a company has a gap in their inventory, the risk is that customs find this during an audit and the company will need pay the duties on the discrepancy. Additionally, companies that fail their audits have a more urgent timeline to correct any problems and are more likely to receive more frequent inspections in the future, so it is best not to wait for a failed audit before acting.
If the company is found to be noncompliant, they risk losing their AEO. It takes a long time to become an authorised economic operator in The Netherlands, so companies do not want to lose that status and go through the application process again.
Finally, the move to DMS 4 is a big change for companies in the Netherlands. If their people and processes are not ready for the move, then they will risk delays in their clearances and noncompliance. Informing customs that they are working with a provider of interim strategic customs support, can help In showing that they are prepared for the change.