Internal Compliance Program (ICP) – Customs: A Necessity for World-Class Trade Compliance

Exim Vidya

For many years trade compliance leaders felt that accounting has an internal control program and accounting guidelines, purchasing has purchasing procedures, and marketing follows marketing policies – so why can trade compliance/customs not have similar policies?

As a result, many organizations started working on this topic and taking the best out of strategy, policies, and procedures, the ‘Internal Compliance Program (ICP) – Customs’ or ‘Trade Compliance Program – Customs’ was developed.

Today, the world is challenging and full of disruptions and risks, and customs is a complex topic. The Customs ecosystem involves many regulatory bodies and several stakeholders , as seen in Chart -1.

These complexities are further increased due to global complexities like the US trade sanctions on Russia, the Russia-Ukraine war, the US-China trade war, Brexit, FTA, localization, and de-globalization. Adaptation of new technologies as well as cooperation between Customs departments and various countries, and between Customs department and other departments like Direct Tax- Transfer Pricing & GST authorities; as well as the use of AI Tools and advanced audit techniques have opened new areas of focus.

Internal Compliance Program – Customs is developed to address all compliance, risks, optimization, and measure & monitor performance, efficiency, and costs issues. ICP – Customs can serve many objectives. Chart -2 illustrates the main objectives.

Today ICP/TCP is playing a major role in making strategies and policies for Customs and trade compliance topics across the world. There are several benefits of ICP.

Management Commitment

Management commitment and support are most important for the successful implementation of ICP. Providing necessary resources in terms of manpower with the right talent and skill, IT Systems, tools, and cooperation from other internal stakeholders are critical issues which need management support.

This is an abridged version of the EXIM Vidya segment that was published in the August issue of Logistics Insider magazine. To read the complete version, please click here.

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