July 20, 2017 | Industry Insights

Why Regulatory Defense Is an Essential Part of Your Risk Management Plan

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Customs brokers and freight forwarders that engage in the movement of goods across borders need regulatory defense services and Errors and Omissions insurance. Doing business across oceans and borders, while very rewarding, is significantly more challenging today. The government has a renewed focus on enforcing U.S. trade and customs regulations over imports and exports, and it is impacting businesses in every sector.


Regulatory defense gives you peace of mind as you conduct business across national borders on behalf of your clients.


Increased Enforcement Requires Greater Regulatory Defense


Recent shifts in government trade policy have increased the impact of trade remedies such as retaliatory, safeguard, antidumping and countervailing duties and strengthened the mechanisms to prosecute trade and customs law violations. The federal government estimated $2.3 billion in antidumping and countervailing duties went uncollected in the past 15 years – funds the U.S. Customs and Border Protection (CBP) intends to collect in the future on top of the billions of dollars in additional duties it now is collecting as a result of the recent trade wars .


The tougher stance on detection and enforcement is in large part a result of the Trade Facilitation and Trade Enforcement ACT (TFTEA) signed into law in 2015, affecting how customs brokers, forwarders, importers and exporters conduct their day-to-day operations. The TFTEA was intended to create a fair and competitive trade environment for all goods that cross U.S. borders. The Administration’s levying of additional retaliatory duties simply added fuel to the already burning enforcement fire.


Of great importance to any business importing or exporting in the U.S. is the implementation of the Automated Commercial Environment (ACE). This system enables CBP to share, collect, and process information submitted to CBP and  other government agencies. This makes tracking enforcement actions, violations, infractions, and inconsistencies far easier for CBP. The TFTEA also directs the U.S. Department of Justice to work with the Department of Homeland Security to develop prosecution practices and to allocate resources to ensure that federal prosecutors place high priority to significant offenses related to trade law violations.


The need for enhanced regulatory defense is also driven by a renewed emphasis on product and food safety and intellectual property compliance. The 2017 Foreign Food Supplier Verification (“FSVP”) rule requires all food imported to the U.S. to comply with domestic food safety standards, which is a huge shift in requirements for certain foreign businesses.


What Is Regulatory Defense for  Customs Brokers and Freight Forwarders?


Regulatory defense provides a safety net should your business face non-compliance and regulatory violations. Yet, it is also a proactive measure. Regulatory defense heads off the exorbitant expense of a regulatory violation before one is levied on your company. It is a legal defense contract that provides access to consultation and legal assistance. While specific, your regulatory defense contract should address a wide range of claims from major government agencies and departments administering U.S. trade and customs violations, including product and food safety and intellectual property compliance.


Here’s how regulatory defense works. In the event of a claim from any government agency or department involving administrative fines, liquidated damages or penalties claims, license revocation and/or suspension proceedings or letters of investigation initiated against you or your company, your regulatory defense policy gives you prepaid access to legal advice and consultation.


Regulatory Defense from Roanoke Trade


The legal service offered by Roanoke Trade is exclusively available to customs broker, freight forwarder, and other intermediary clients through our partnership with a top law firm, Sandler, Travis & Rosenberg, P.A. If you are issued a penalty, threatened with license revocation, receive a letter of investigation, or are the subject of any other customs enforcement action, Sandler, Travis & Rosenberg, P.A. is informed of the events and your consultation arranged. With a regulatory defense contract from Roanoke Trade, Sandler Travis & Rosenberg can advise on your violation and handle a petition in your defense.


Roanoke Trade, specialists in serving the insurance and risk management needs of transportation and logistics providers, is committed to helping our customers protect their businesses with specialty services and programs designed to address today’s risks. Both basic and expanded regulatory defense contracts are available from Roanoke Trade to address claims from the various agencies and departments. A list of the agencies and departments can be found here for each contract option.


For more information about Regulatory Defense and to obtain a quote from a Roanoke Trade representative, call 1-800-ROANOKE, ext.1066, or send an email to infospot@roanokegroup.com

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