Hot Trade Compliance Trends for 2023

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Andy 0:01
Hey Lalo, how you doing? Again, it’s, we’re back for another show. And I’m excited. We had a great show with George and Adrienne, setting us up for the New Year and, and whatnot. So I’m looking forward to today’s show. But how are you doing since our last recording?

Lalo 0:20
We’re doing good, doing good. And I just also, last week, we had Cynthia Wittenberg as well from a former CBP and she had some really good, how companies can work better with CBP. So we’re kind of there’s a little tone or, or what’s the theme here that we’re trying to do, and trying to get everybody situated to prepare themselves for for the upcoming year? And, and you’re right, this, this episode is gonna actually segue really nicely into that because of that. And I just wanted to say, you know, the second Friday of the year, is officially known internationally as Quitters Day. Okay, Quitter’s Day is, so this is quitters.

Andy 1:09
Quit over drinking.

Lalo 1:11
No, no, no, no, no, no, you quit your New Year’s resolution.

Andy 1:15
Oh, that’s the new year’s resolution. And so by the second Friday.

Lalo 1:23
So because I say that, because that’s kind of what we’re going to talk about today, kind of like people making resolutions about I’m going to be more compliant. I’m going to set my trade this and that. And hopefully, that’ll segue into our guests. And so anyway, I just thought I’d throw that in.

Andy 1:41
Well, I will say this to our guests, again, to our excuse me, to our listeners, thank you so much. Again, we’re trending up your you know, you’re you’re flagging us that you apparently like us, and that you’re subscribing to us and all of that. That is fantastic. We would appreciate that. For our listeners, again, is that with that show that Lalo just mentioned talking about the career and all that. Please be sure and listen to that, especially if you’re coming up through the ranks if you’re a newbie if you’re in in the middle of the ranks of the compliance, logistics, management, whatever, or even seasoned because that’s a good one to listen to. Also, as we just talked about, mentioned about George and Adrian’s podcast, talking about some of the important things, what would we learn? What are we coming up with 2023 this show today, I’m really excited because we have a couple of guests on here that again, I’ve already told them this, they’re gonna forget more than I’m gonna get to learn. So this is one of those is like, where are we going? When these ladies speak, you need to be listening. So Lala, once you introduce our wonderful guests here today,

Lalo 2:54
sure. So I’ve, I’ve this first time I’ve met both of them, but I’ve known of them for a long time, we had a previous guest of our show, Gabby or Gabrielle, she was talking about the seat on the in the getting a seat in the in the C suite. So she was on her she was on her show before she’s part of the of this group. So the group is BPE global. And with that said, I mean everybody’s gonna know exactly who we’re talking about Beth pride. And she’s a legend out in the, in the in the in the trade world. And I’ve been told many times how she’s a pioneer and helped a lot in the Bay Area to establish like, oh, wait, for example, and other other programs out there. So so really happy to have her and Evelyn, so I ran across Evelyn, who’s who’s who’s also part of the firm with BPE, because I stumbled upon an article that she wrote, which is kind of like this, I like the tongue in cheek and kind of like a play on words. So she did a really nice article about who’s on first, you know, that play on Abbott and Costello, and she was comparing that a little bit to kind of what happened in 2022 with trade and it was a great article, and I said, I gotta have these ladies on the show. You know, I told Gabrielle and I wanted him on the show anyway. So that’s, that was a good excuse to have them both on there. So anyway, so that’s what we have. We have Beth Pride and Evelyn Bernal. So welcome to the show.

Andy 4:31
Welcome, ladies.

Beth Pride 4:32
Thank you.

Andy 4:36
Alright, so with that, Beth and I were talking before we started recording here that it’s a lot of along the lines of what we learned in 2022 and 2023 kind of things in the in the important things. So let’s go ahead and jump right into what we’re talking about is that you were talking I think first on your list and We’ve got a lot of really cool things to talk about folks. But the first thing is Russian sanctions you mentioned. Right,

Beth Pride 5:06
absolutely. So we’re going to start with the Russia sanctions. And the reality is when we deal with the sanctions, the sanctions, we’re used to dealing with relatively small countries with that have relatively little trade activity. The Russian sanctions apply to the 11th largest economy in the world. And they are intended to severely impact that economy. And the sanctions were a multilateral effects effort, so that we could get the broadest impact possible. So the United States, the EU, UK, and many other countries all implemented sanctions on some, it’s some of every type of items. So usually, it’s items that are higher controlled, but they’re even catching items that are subject to anti-terrorism controls, only a e ar 99 item. And what they did to impact those items is they’ve done something completely different. They are now looking at Schedule B numbers, and listing them in part 746 to the Export Administration Regulations. And if a specific HTS is listed, you are caught even though your item is classified as E ar 99. There are three separate supplements that are caught. There’s industry sector sanctions, which tend to be oil and gas, that supplement number four, there’s luxury goods in supplement number five, think widescreen monitor that is going to be used as a part of your business solution, your commercial sale as opposed to in your personal house, catching those types of things. And then supplement six is all the chemical, biological industry sexual sector things that can be used as chemical or biological weapons. So each country varied on the controls. And some controls were so broad that they could get anything and I’ll give an example. centrifuges are caught and I think of centrifuges as industrial scale centrifuges that you see in widescale labs. But they

Andy 7:21
even even even in a doctor’s office as a smaller. Absolutely.

Beth Pride 7:26
And even in a component in a smaller device. It’s only two millimeters long. They’re catching anything that would meet the technical parameters of a centrifuge or fall under that HTS number. So it’s going so broad, but it’s catching things that normally would never have been caught under the Export Administration

Speaker 1 7:47
REMOVE FROM HERE

Andy 7:48
Okay, so let me yes, this is that as far as in dealing with that, there’s also some changes in this particular realm. Where if you’re trying to ship goods to Russia, it’s also expanded to you could ship goods to another country, but if it is a Russian was an ally card, or are some person that is listed I guess, on the sanction list, you’re gonna get yourself into problems and more specifically, the, like the luxury items, that was one of the things where there’s a lot of Russians that are extremely wealthy Well, items just to in support of their helicopters or their yachts, yachts is a big thing. And do I have that right? Is that something that comes into play as well as what you’re covering? Yes, absolutely.

Beth Pride 8:44
So the specific things, the yachts, the luxury items, all of those are caught under the 746 supplement lists, the parties, the oligarchs, the people who have military backgrounds, Evelyn is going to talk about that in just a sec of Second. And a lot of Russian people, individuals were added to the restricted party screening list, so that we can make sure that people that facilitate the weapons, the war activities in Russia, are no longer going to benefit from international trade, global trade. So that’s huge.

Andy 9:25
TO HERE

Here’s a question to what what you’re talking about. Would you advise your clients, is it even worth trying to do business with people in Russia?

Beth Pride 9:40
So when we started so on February 24 2022, we were advising our clients, you should not be doing business in Russia. But what we’ve since learned is that there are valid reasons to be operating in Russia to provide diagnostic If equipment to be able to help people stay healthy, the everyday Russians don’t want anything to do with this war. We’ve also helped Chinese companies who have cell phone technology, get their commercial commodities into Russia. So everyday Russians can get real true news and share it with other everyday Russians so that they can fight this war internally within Russia with accurate information. So it’s not an all or nothing question. If it is something that would improve the economy of Russia, if it’s something that would benefit the war machine of Russia, and specifically, Mr. Putin himself, then we say absolutely don’t do it. But we absolutely believe that everyday Russians deserve and should have equal rights and staying healthy, and having access to food. So that’s the basic stuff that we’re advising right now. Good question.

Andy 11:06
Alright, so what’s next,

Beth Pride 11:08
I’m gonna let Evelyn talk about lists and the big changes that we’ve seen to all of the list in the list in the list. So Evelyn, go ahead and take it away.

Andy 11:18
So you’re gonna get to talk to us about these lists.

Evelyn Bernal 11:20
Absolutely. And there have been nothing but challenges with restricted parties lists with financial sanctions lists. This year, we saw a tremendous increase in the frequency and in the number of parties being added to the lists. And it wasn’t just limited to OFAC and bis it was global, as countries continued to strengthen their sanctions on Russia. But again, as Beth was mentioning earlier, it’s not just about Russia, there’s already an existing group of sanctions that each country has implemented. And so sanctions on countries like Venezuela or existing sanctions, or facts, China military company sanctions, there was a time when the lists were being updated, and frequently and the list was short. But that is no more. As an example, I subscribe to the alerts for any edits to the European sanctions lists. And beginning in February of last year through today, I had 65 alerts on the number of updates to those particular lists. Part of that challenge is how quickly companies are required to react. So even if you have a screening tool that you subscribe to, most often the providers are unable to put those or implement those changes until the following morning, because they’re learning at the same time we do they don’t get a heads up, you know, but companies, nevertheless are still required to place holes on any transaction involving those restricted parties immediately. So for any companies that are manually if you can, if you can imagine companies that are manually screening against these lists, they’re having that much more difficulty being able to keep up. And if they are a multinational company, if you’re exporting globally, that’s how many more lists you have to think about screening against. So it gets complicated.

Andy 13:21
Okay, I have a question for you is with what you just said, especially if you are a large corporation, but even if you’re a small one, the scenario that I’m hearing in your process, would you agree that it would be smart, and probably you need to design it this way, that if you’re not already doing it, you should try something along the lines so that you are screening in multiple facets throughout your supply chain or throughout your transaction. And I’ll give you an example. And then I’ll let you elaborate is one thing you need to vet your suppliers. But then you also need to vet some of the people are involved, that your customers as a whole. So when a customer set up, and they are setting up an account of where so your vetting that part of that vetting process should be bouncing names and addresses against the denied party screening restricted party screening. Then later on when there’s a customer order or purchase order, you know, screening again, but there’s a customer order, you need to screen it again. And then probably a third level is when just before you’re ready to ship. Either you do it or you have your transportation company, do that screen.

So you have somewhat of a primary, secondary and tertiary type check. What do you think about that?

Evelyn Bernal 14:50
That’s that is the exact guidance that we would be giving and because it is important to understand what you’re trying to avoid in screening throughout the process is engaging with a customer that at the end of the day, you’re not even going to be able to export to. And so screening at the time of customer onboarding, screening even earlier than that, at the time of a sales engagement is important and could save you time and money as a company. Then screening again, at the time of customer onboarding, as you mentioned, screening at the time, again, the screening anytime, even if a customer says, Hey, I need you to change the change this the export address, ship it to this destination, instead, there should be a screening implemented then. And then again, just prior to export. So screening throughout the process, and then actually, if you think about it, screening against customers that are already existing on your master list on a daily basis, or on a more frequent basis. And right now, it’s not safe to screen, everyone on a monthly basis, there needs to be screening on a more frequent basis to make sure that you’re keeping up with the rate of changes to these lists.

Andy 16:11
Alright, so that. So again, an action step here, as far as that goes, is one thing designing your process. But then the other is the frequency that’s is just in general of your, the database of your customers, your database of your suppliers, and put to putting that on a regular basis where you’re screening. I mean, I would look at it possibly, if there’s a tremendous number of changes, you’re talking about, at least on a minimum once a week, maybe at a bare minimum, once every two weeks. I mean, they’re there. I know there’s changes. But if you if depending on how large your database is, that may be an extensive, you know, comparison that you have to run. Again, you balance your objective with your risk and in the frequency. So

Beth Pride 17:07
anyway, Andy,

Evelyn Bernal 17:09
I think I want

Beth Pride 17:10
to comment on the sorry, Evelyn, I just wanted to comment on the rescreening of lifts. The good the great global trade management solution providers that are out there, when a member a new addition to the list is added, it’ll go back against and screen against all of the people that you’ve screened against previously, so that you don’t have to go do it. So it will proactively look and deliver to you. So you might not have a new sales scheduled for three weeks from now, if an entity has been added to the list that, you know, that has you’ve already screened again. So they’re designed to help you pro reactively to the list that you’ve already screened. And I’m sure Evelyn has a lot more deployed. But

Andy 18:04
it is said, if you are adding a customer file or a vendor file, whatever, if you’re adding a file, I can see the screening there, if you update that file, I can see the screening again of that particular file, and then I can see a whole wholesale of the entire database needs to be screened again, at least on a regular basis. That would be one of those maintenance jobs run in the background. And then any exceptions that come up need to be sent to the compliance side. But again, the now I that’s what I would look at, I guess others may want to look at it constantly going through if you have a lot of records, you’re tying up a lot of processing. And depends on how many hits you get. But my point is, is this as you’re going through from a compliance standpoint, you can’t just assume it, get it done. Or you put in your user requirements to say I want this database or I want this process checked every so often. And here’s who we use for vetting. It would be a case that you need to verify that ever so often. Would you not agree with that?

Evelyn Bernal 19:10
Absolutely. Yes, absolutely. It needs, it has to be checked, it has to be current. If it’s not current, you could easily miss something. You know it. I think besides the restricted party screening, though, I think it’s really important to remind companies that it you shouldn’t just be screening to see who’s on the list or who isn’t on the list. You need to make sure that you’re also screening for any type of OFAC 50% Rule implications as well. And that may not necessarily be evident by a restricted party screening alone. So at the highest level as a reminder, the 50% rule states that any party that is owned 50% or more in aggregate by one or more other blocked parties is also blocked. And so what it looks like is you could have a customer who’s not identified on a restricted party list, but who is majority owned by blocked parties? Well, that means they’re also blocked and you are not permitted to do business with them. And this isn’t something that most screening tool providers have been able to fully address yet, although some have made tremendous strides. Because this is something that clients really need and demand just because this screening for this role is not simple.

Andy 20:45
Well, now you’re touching on. Going beyond just kind of a screening, you’re you’re you’re touching on valuation, you’re touching on sourcing percentages that you’re touching on the sales situation and having to find out more. So even in the scenario, let’s say we were with what Beth mentioned on the Russian sanctions, as you’re coming across this with the the list. Of there’s so much that’s involved in the different list of people from different parts of the world.

What would you recommend if there is a compliance group, especially for a large corporation, because that’s where you know, a lot of these government enforcement efforts they’re gonna go after where ever the money is. But as a whole, what would you recommend for a compliance area? Do they should they completely outsource that and rely on that outsource vendor that does the screening to have the expertise? Should they build some expertise and proficiency for different parts of the world? or have somebody that says, Okay, I understand the full compliance or restricted party screening process, and go from there?

Evelyn Bernal 22:04
Yeah, I think it’s really is a mix, we are definitely starting to see an uptick in the number of companies that are looking to source globally to find local resources in the regions so that they can do the screening, they know that, you know, local language, local culture, they know where to go to look for this information. So we’re definitely seeing that. But if a company isn’t able to do that, it really is just about understanding where the information and putting in the time to assess where the information can be found, what websites what screening providers will give you, you know, the biggest bang for your buck as far as I was hosting that information. But it’s a lot of screening. Right? It’s it’s definitely not for the faint of heart. It’s a lot of screening, and it’s a lot of research to be done. I don’t know if Beth has more to say on that.

Andy 22:56
Let’s take, let’s take something here where you know, either Evelyn or Beth, you’ve probably have examples like crazy here. But so what if I don’t do this? What if I don’t care about those Russian sanctions? Or what if I don’t, you know, really am not showing due diligence in my screening process, what’s going to happen?

Beth Pride 23:17
So, go ahead.

The key to a good compliance program is staying ahead of things and showing that you are doing everything humanly possible to not have a violation. The real world is there will be violations, there will be whoops, there will be issues where somebody slips through.

And if you have a documented process, if you have a clear program, escalation, risk based compliance, all of those things, you can most likely get away with a slap on the wrist, as long as you implement mitigating strategies to keep that oops, from ever happening again. But it’s the people that repeatedly know they have a violation and let it go. And I want to speak to our audience, I want to speak to the people or the single person trade compliance operations that have for years and years said, I need more resources they need and I’m going to take probably from Gabby’s presentation, they need to go back to their executives and say, This is not going to work. You’re going to go to jail because you haven’t resourced this correctly. And it’s not a hair on fire thing. It’s just an honest reality. Show them Don’t let this happen to you. Show them the examples that we have with companies that have been fined almost a billion dollars for not having implemented a solid trade compliance program and show the executives how to do it right. Don’t just say This is a problem, you’re gonna get in trouble. You always have to give them do X, Y, and Z. And that will protect you, that will be the best thing we can do right now.

Andy 25:11
I’m gonna say, Beth, you hit on a couple of things that are absolutely phenomenal. Right off the bat, you are saying a, you know, basically a championship level compliance team, I’m paraphrasing, obviously, is that somebody is trying to stay ahead of the ballgame in anticipating issues. And, and again, you’re getting so the next part of that is not only anticipating but have you got a process laid out and going from there. So for our listeners, with what we’re looking at here, again, you’re going to need to look at it you may have a process, how long has it been since you actually walked through that and actually verified it, and I’m talking personally getting involved, don’t just assume that your staff knows that you better have some oversight on that. And or get your hands dirty, if you will. And through that process. That’s one thing. The other thing, Beth, that you were just hitting on is, again, going to the executive management or upper management of a company, if you’re in compliance, or in logistics, or whatever part and you’re getting frustrated with, you know, always saying, well, they should be doing this, they should be doing that, or whatever the case may be. And you know, I’m seeing the infraction and woe is me. I’m a stepchild, I don’t you know, I’m overworked, underpaid under source or resource. You know, it’s like do something about it. But the way you do it is I agree with Beth, you need to put a messaging together to go to your management, but you just can’t walk in and say, Hey, you better do it my way and all that, talking about Gabby’s show that we had, she actually talked about how to approach upper management. And, and we’ve actually had some other guests in there. If you look through our inventory, look at that, as far as our shows, look at how to approach upper management, you can’t just go in there and dictate things and when there are ways to document it so that you’re covered. But you also need to put it in such a manner that you got to translate the complexity of the all this compliance stuff into terms that your upper management will understand. They’re not going to be a compliance person. So don’t expect them to understand your terminology, you’re gonna have to translate that. So Beth, I gotta say, that was fantastic. And Evelyn, I’m hoping I’m not taking your thunder away on some of this, but I just digging into it,

you’re hitting on some fantastic things that I’m hoping people will understand. Man, I’ve got a lot of work ahead of me in my new, you know, in this new year, so. Alright, we’ve beat that dead horse down. Okay, so what’s next on here, we’ve we’ve, we’ve talked about Russia, we’ve talked about list,

Beth Pride 28:03
I want to talk about how hard it’s gotten. I want to just share that our new reality is that the export regulations, the import regulations, they got significantly more complex. The Bureau of Industry and Security, they seriously changed the rules with the super computing and semiconductor regulations that they just dropped in October.

They made these regulations effective on the date of publication, 130 pages of net new regulations. And it was supposed to be implemented the minute it hits the press. The reality is we can’t read that fast. It used to be that you would get a notice of proposed rulemaking, and you’d have a review and comment period. That generally was several months. And you might even before that proposed rulemaking came out, you would have had meetings with the feds telling them what you need, and they adjust their regulations before publication that has all gone out the door. So in this case, this particular supercomputing and semiconductor regulation, they gave us less than meaningful guidance. And then they only partially released the publication. And and then, two weeks after October 7, they dropped a couple more parts of the rules. And they they basically threw incomplete regulations out and then didn’t give us clear guidance. And so the reality is they said things like, rely on certification, but they didn’t give us examples of what those certifications just stay since that. We have a great certification by the way that we’re happy to give to anybody who asked for it. The reality is the tech nickel parameters that they said, if your supercomputer does this, or your semiconductor does this? Well, in some cases, the This isn’t even something that’s something that an engineer understands or has ever heard of. So the reality is, the new regulations are not clear. And it’s really important that you dive deep for your area into the new regulations that impact you. And so it was classification that is impacted, there are two new ECCN. If you’re in those two SCCM, you’re going to know it already. By the way, you’re going to need to understand the end use controls, which were around, if you make something let’s say a conveyor belt that goes into the heavily controlled semiconductor semiconductors, then that conveyor belt cannot be exported to China without a license. And then there’s all these new rules under foreign direct product, and it used to be you have a de minimis rule. While de minimis was pretty clear. Now you have to do de minimis and foreign direct product. But guess what, there isn’t one foreign direct product rule, there are eight. There’s one for national security, one for 9x 515 items, one for 600 series, one for Entity List entities, one for Russia, and Belarus, another one for military end users in Russia and Belarus, one for advanced computing and one for supercomputers. It is crazy the way they have shifted the way that they’ve released these regulations.

Andy 31:45
Okay, so let me ask you this question. Beth is like as you’ve gone into it. My mind’s going. Wow. All right. So out of this. More specifically on the semiconductors, the competing supercomputing all that are you talking to as far as imports of those components or exports,

Beth Pride 32:08
so it exports of items to Chinese manufacturers of supercomputers and semiconductors, specific types of semiconductors, except for one area where if you are exporting, specifically, category three, B items, is anything.

Andy 32:32
Yeah. Okay. So, with that scenario, again, and looking at it, I will say that I’m aware of some enforcement activities, where you’re talking about going to Chinese businesses and whatnot, that there were US companies exporting some of these commodities to Vietnam. But it was they were getting into trouble. Because from then it’s like, you know, they ask him that question, what do you do with what I’m selling to you? At the end use? And where’s it going? Or what are you going to do with it? And at some of those questions, you need to ask on that, because they were going on then to China, which was a big no, no. Okay, so out of what you’ve talked about, let’s let’s pull it back around this some actions here that something that comes to mind, from a compliance. If you are talking to our audience here, if you are an executive especially, or upper management, something you need to consider is having when you’re you’re looking at I’m sure you have like a committee that’s looking at marketing to and sales into different countries. I would highly suggest and Matthew and Evelyn can weigh in on this. It would be wise to have somebody from the compliance arena, be able to sit in on those planning assessments. When you’re stocking talking about marketing products into and sales into different parts of the world so that a vetting process can come back and go, yes, you can do it. But here’s the risk, or here’s the parameters or whatever else. What do you think about that?

Beth Pride 34:13
You nailed it, Andy, you totally nailed it. And also just a reminder that the imports from Russia move to column two. So normal HTS, they have a column one duty rate that can be duty free to, you know, depending on what it is it can get pretty high, but column two, that stuff can get crazy, and it’s not not cheap to import from Russia. So imports were impacted as well.

Andy 34:47
I get that. Okay, I gotta say you guys have already hit some pretty heavy duty stuff. So what’s next on your list that you want to talk about?

Evelyn Bernal 34:57
Well, what’s next is time Think a little bit about the Uyghur forced labor Prevention Act. Folks have different I’ll call it UFT LPA. Today, I’ve also heard

Lalo 35:08
it you flub a year for 2022.

Evelyn Bernal 35:12
Yeah, so we’re going to talk about the UFL PA. And under these regs, a CBP now presumes that any goods that are mined or produced or manufactured wholly or in part in the Xinjiang Uighur Autonomous Region of China all have anything there is unfit for entry into any US port. And so, CBP is asking for, quote, clear and convincing evidence, unquote, to allow these goods to clear into United States and, and then also evidence to show that no business has been conducted with individuals that have been sanctioned for non compliance in this area. And so this has required a shift in the mind of global trade compliance professionals who would normally say, oh, that’s forced labor, talk to environmental, social, and governments in governance, talk to the quality organization or go talk to the supply chain organization, with cbps involvement. Now, in cbps responsibility for enforcement, you can no longer think that way. So there does it require a shift in you’ve got to jump in, you’ve got to roll up your sleeves, and you’ve got to understand what it’s what it’s all about. And what it has become about is supply chain tracing. It’s not any longer just understanding the countries or regions from which your companies is importing, or where the materials are sourced from, it’s being able to actually document that supply chain, have certifications in place, and proof, you know, have proof of audits for immediate response to CBP, if they have any questions about your particular imports that are coming in from China. And the requirements are burdensome. So the expectation, according to the US, forced labor Enforcement Task Force is that importers have you know, develop due diligence systems that engage stakeholders and partners, that they are communicating across their supply chains, that they are monitoring compliance. And they also expect that companies incorporate independent reviews. And so everything now needs to be documented to demonstrate that the company has conducted all required due diligence to be able to comply with the laws. It’s hard companies have had to get smart in their approach to the work because we they need to make sure that they are complying.

Andy 37:57
Okay, so what’s up, man? These are some deep topics. So what’s next on our list?

Beth Pride 38:03
Yeah. So I think what we can do to close with is general New Year’s resolutions, reminders. What a perfect time, we’ve just celebrated the new year from a calendar perspective, as well as the Lunar New Year. So it’s time to make some new year’s resolutions. I believe we believe and keep them. We believe that the most important thing is training. As a compliance officer, knowing it yourself doesn’t do any good. You got to share the knowledge so people can be out their eyes and ears for you. And the reality is, if your training hasn’t been updated since January of 2022, it’s out of date, and you are at risk of potential violations. You should also a great resolution is to develop a compliance calendar. When are you going to do your training? When are you going to do your audits? When are you going to report? When are you going to renew your licenses. And then the third thing we’d love for people to think about is going virtual, do not and I’m a diamond Old, old soul in this world of trade compliance. And I love my paper, but don’t use paper versions of the regulations. They get outdated as soon as you print them. So you got to make sure that you go out there and you use the online resources so that you’re looking at the latest version of it. And then look at your compliance procedures. I mean, we literally wrote trade compliance manuals for clients last year. We’re rewriting them right now because the regulations have changed so drastically. So do your export compliance procedures as well as your customs procedures. Look at how you’re determining country of origin to Evelyn’s topic that she just went over and make sure you’re looking at h TF classifications, if you are predominantly a exporter, you likely have not really delved into the general rules of interpretation when it comes to your HTS classifications, so you’ve got to get them right, because it could impact you and the Russian sanctions. And always take a risk based approach by reviewing your highest volume and value items first, and then you can work through your entire product list, but, you know, take a risk based approach.

Andy 40:30
Fantastic, I would add one other thing to your resolution. And that would, you should add networking within your company and outside your company, to that whole objective is like looking at your calendar and all that. And I had somebody make a challenge to me that they said, what they try to do is pick one person every week to try and you know, have lunch with have coffee with talk to him on the phone, whatever the case may be. So that, you know, let’s realistically they’re going to probably get about 45 people, new contacts that they will have developed a relationship with is I mean, yeah, there’s 52 weeks in a year, but you know, you’re gonna be out during the holidays, whatever. The point being is, as you’ve just talking through, I would highly recommend you better get in sync with your purchasing folks or your sourcing get in sync with your legal that usually happens anyway. But different parts of legal you’ve got the imports, you got the exports and all that. Your it that is paramount, it in relation to your purchase order system, your customer order system, your logistics, warehousing, and all those kinds of things. And there may be different elements of that. Your upper management, your, you know, different levels of management, different areas, all those kinds of things. So he comes into play, man, I tell you what, yo is, this is fantastic information. Y’all are just absolutely fantastic. I just you’ve got such wisdom to both of you. I hope everybody follows up on this stuff.

Evelyn Bernal 42:17
So I would add, I think there are a couple of points also to make where we’re talking about classification. Let’s not forget classification on the ECCN front for purposes of being able to export because, you know, another topic that could we could spend 30 minutes on is

this new push from bis as they have authority to look for new critical technologies and these section 1758 Technologies formerly referred to as emerging or foundational and as these ECC ns are identified by bis, they are either creating new ECC NS and adding new ECC NS to the CCL or

they are updating existing ECC ns. To give you an example of this, the most recent semiconductor rule introduced ECC NS three a Oh, and I know. And if and also said that even if you have a product that is controlled for export only for mass market reasons, you have a five a 992, Product mass market product that you’ve been exporting. But that product meets the technical parameters of this new three, a oni? No, well, now you have a product that you could have shipped under 58992. But you can’t. And then bis says, You don’t have to change the classification. Just they’ll ship it. Well, how is a global trade management system going to be able to recognize so that brings me to my next point, which is comment. Bis asks for comments. The USTR asks for comments with respect to like the section one duties we didn’t even talk about today. It’s allowing allowing companies to go in and comment on these regulations, take advantage and do so and you can do so directly. Or if you’re part of an industry association, that is commenting. You can add your comments in anonymously in that front, but it’s important for the government to hear you and to understand the impact that these regulations are having on companies. I think a lot of times accompany will say someone else will comment. Well, they may but they may not be commenting on what really matters to you. So your voice is important. So be heard. Take that opportunity.

Beth Pride 44:51
I actually want to I want to comment on that comment to comment.

Andy 44:58
Please do because I was like you Evelyn is like you struck a chord with us. Go ahead, Beth.

Beth Pride 45:04
So we have a client. That was not when the October 7 semiconductor rule hit, they had to stop all their activity in their US operation, they had to have all of their employees stand down. And the policy change 744 23 was so significant that they actually initiated shutdown procedures to close their company. In the meantime, we filed a comment with bis, we also filed an application for a license to keep keep the company running. I believe that our creation of the comment informed many, many people at bis which enabled the licensing officer to take our dilemma to the big wigs. And we actually got a license in less than 30 days from this new rule being issued, with a very clear policy of denial. Because of that comment that we made, it paves the way for the government to say this company shouldn’t be hurt by this rule, because they are not the reason why we implemented this rule. So please comment.

Andy 46:31
Well, and to that point, what I was going to say in Abilene was so right on this. Another resolution, if you will, is or when you’re looking at your compliance calendar is, as you’re looking at, what are you going to try and do throughout the year, you know, your audits, your your classification, your database, your screenings, all those things. Part of that calendar you should look at that Evelyn touched on was what trade associations and Government Affairs type activities are you going to participate in? And or your your company? Obviously, you, Beth, you said it again, you can’t do it all? So the question is, you’ve got to build alliances within your own company, especially if it’s a smaller company to where you can empower your executives or your management or your counterparts and other divisions with the appropriate information so that if they’re sitting in on some of these committees, or trade associations, whatever, you’re pushing the agenda items that need to be pushed. So again, that’s another thing is like, what conferences are you going to go to? Or what meetings are you going to strive to go to with a trade association? In some of the things and put that into your billet there have things to do? Oh, my gosh. Anything else for right now? Because I got another question to throw at you.

Beth Pride 47:59
I think we’ve covered everything we plan to deliver.

Andy 48:03
Alright, so here’s one question that we usually ask a lot of our people and I’m, I’m curious for both of you. If you could go back in time and talk to your 2122 or 23 year old self what would you tell yourself as far as your career goes or life whatever.

Beth Pride 48:24
I’ll go ahead and start I mean, like, it was sure a damn good idea to drive that truck because it’s led you to where you are now.

Evelyn Bernal 48:37
Well, that was that was it best. I think what I would tell myself is be resilient, right? It’s, you’re not going to make it through unless you are able to adapt.

Andy 48:56
I love it. I love as bas like you can choose to either react or respond. And invasive things are gonna happen. So basically, what you’re saying is develop that the expertise and process and skills to win the proverbial you know what hits the fan, the unexpected. Figure out how to respond and that’s one that I’m still working on. So I got to tell you, something will come up and I’ll get madder than a wet hand. I’m like, Oh, it was like oh, I shouldn’t have done that. Okay. Ladies, this has been an absolutely fantastic show. I can’t thank you enough for again, folks. If you can’t, I mean, again, you can see why I said they’re gonna forget more than I’m gonna get to learn so this these are some great Ladies, thank you so much for being with Lala on myself.

Beth Pride 49:58
Oh, happy to be here.

Lalo 50:03
Thank you all very much. And as we’d like to remind everyone is to check on the show notes because we will have links to both Beth and Evelyn’s at least their LinkedIn. And for sure to Beth’s consulting, business, BP global global, we’ll have links to that. And if there’s anything else, that that they may want to share, whatever, we’ll have links to that as well, but just want to remind everybody about that and, and, you know, we’re really happy to have you here and really appreciate your time.

Andy 50:39
Listen, folks, to our listeners, again, please flag this if you like these shows, and all that high, the flag them that you like them, share the information with your counterparts, get them to listen. And these are things that can apply to more than just somebody in just in compliance or logistics or transportation. Get it throughout the company. They’ll learn something so All right, thank you folks. Have a good day.