Outsource Trade Compliance to Help You Focus

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Joe Burks 0:05
We find people all the time they got Fox watching the hen house customer service. Does it well? They’re driven to get orders out the door not to do the right thing. We’ve got trained teams that can do that

Annik 0:17
before we get started with the show. Here’s a quick word from our sponsor, global Training Center. As trade compliance professionals, you want to make sure that your procedures and documentation are completed as correctly as possible to avoid any delays and possible fines, we provide a range of trade compliance courses that will fit your needs, from in person or web training to recorded on demand courses we can train one or even 1000s on your team. Through your learning platform or on our portal, we can even customize a private session for your team. Go to global training center.com to find out more. Hey,

Lalo 0:51
Andy, it’s crazy how the year is going by fast. I mean, we’re already a couple of months into the year, and so where has it gone, right? I mean, it’s crazy,

Andy 1:03
well, and there’s so much, you know again, 2020 23 is is not common down in all the turmoil and different things that are going on with that. But that said, it’s one of those things where, you know, budgets are coming into play. People are somewhat overwhelmed when they’re sitting down trying to do their planning for the year and and as they’re looking at it, and they see all the objectives that they’ve already set or finalized or whatever they’ve got going. And as they’re looking at it, they’re also looking at the budgets, the economy, different things. So right now, I know a lot of folks are going for you know, bigger, better, faster, cheaper. With that, the scenario is, how can I expand my resources without adding money? If I can get away with that, and especially with the import compliance. Folks, import export compliance. Because the compliance area is kind of a lot of times treated as stepchildren. So it’s almost, you know, get out of our way. Go do your thing when, and we’ll call you if we need you, until the proverbial, you know what hits the fan, and then it’s like, well, why did you tell us? And it’s like, they’re overworked, underpaid, stressed out, underfunded, as far as or understaffed. So, you know, there’s a lot of that stuff going on. I of course, you know, I imagine you remember some of those days yourself. Lalo,

Lalo 2:35
yeah, exactly. And you know, it’s funny that you’re saying that, because I think the more executives or, you know, higher ups listen to our show, they may realize, because it’s funny how mostly every one of our guests have spoken to that, you know, have said, you know, take your, take your compliance people into account when you’re making this business decision, etc, you know, it’s just, it’s just, has to, it has To be part of the equation, you know, and, and, and, like you said, 2023, is not slowing down at all. You know, in fact, there’s probably going to be a lot more enforcement people. CBP has a more experience in enforcing the the like weaker force, you know, forced labor, you know the Prevention Act, yeah, one exactly, you know, in the one elevens and any of the other tariffs and everything. I don’t see those going away anytime soon either. So, you know, sometimes you just get overwhelmed and can’t do it yourself. You know which, and you might need a little bit of help. So hopefully that was a good segue to what we’re to our next guest,

Andy 3:41
Bob. I’m looking forward to this one. It’s just for folks today. We we’ve got a couple folks on that from vigilant that are one of the John Mack and Joe Burkes and Joe and I go way back. We’re really, really good friends. Yeah,

Joe Burks 3:59
we’ve been doing this for a long time, and we

Andy 4:04
sure have, and we’ve got to talk through some tough times with both of our families at times and things and going on and whatnot. By the way, I don’t know if I told you, but I’m a grandfather now, so that happened way back. Greatest thing ever. Yeah, thank you. Oh, I’ll tell you what I’m it’s like, as we say, I’m giddy as a Philly on a spring morning with that one, but I’m just elated. But for our listeners, actually, I’m looking forward to this conversation, because both John and Joe are very knowledgeable in the industry, and I’m going to throw a couple things out here. Is that, first off, Joe, welcome to our show, and John is to you as well. Thank you so much for coming on board with Thank you

Joe Burks 4:52
Andy, appreciate you having us.

Lalo 4:56
Oh sure. Well, thank you all for coming on

Andy 4:59
let. Me throw something at you here, buddy, you kind of heard us probably talking in our intro. Here is in talking through some things with what vigilant in that show, what Joe, what is it that y’all do? And then we’ll go from there, because I got a couple of questions I want to

Joe Burks 5:17
know problem Andy vigilance is a provider of global trade management managed services. So we actually help companies run their trade department. And what makes us different is we dedicate staff, rather than having a bullpen and throwing it over the wall. What makes us different is we dedicate a person to your account, and they learn your business and they become a an augmentation of your trade team.

Andy 5:49
That is phenomenal. All right, so here’s the thing with what you’re talking about there, and it’s managed services. So I get that if you’re an executive of a company, or in middle management or above or whatnot, and you’re sitting there looking to say, what can I do? You’ve got more things out here, and one of them mentioned the Uyghur. What is forced labor prevention? Thank you. I started saying slavery labor. It’s not that it’s anti slavery is basically, yeah, the act that is, in effect, other initiatives are going on, basically, is, with all the things that are happening, enforcement is is ramping up. So if you’re an executive, you’ve got to look at it from a standpoint, how can you minimize your risk? But you’ve also got to look at things to say, not only minimizing your risk, but you got to take care of business. So as a whole, as I’m looking at this Joe and John, I guess I’m looking at it as like, where is it that, whether it’s with vigilant or some other provider out there is that where would be the opportunities for a medium to large size company that could probably come back around, and maybe even a small company, for that matter, but where you know somebody like yourself, a service provider that could help them take care of the day in and day out, type business activities, and allow them to use their higher expertise, folks to be focused on things they need to be doing, rather than pushing paper.

Joe Burks 7:33
Sure Andy, without a doubt. I mean, it makes a lot of sense. And you know, you alluded to part of the problem we’re starting to see with CBP doing more enforcement actions. You know, I read more and more every day about new enforcement actions or special programs or teams that have been set up to do that. And the value in vigilant is we bring knowledgeable people to help you do that. We take the reactionary work so you can be proactive. That’s key, because what we do is we do that repetitive day to day business, such as your HTS classification, that allows your people to be more proactive and start looking at a lot of this forced labor Prevention Act. And you know, we talked briefly, or mentioned briefly, about the new study that Biden’s doing on export controls and how US products are getting into drones, going into into Russia. So how are they getting those products? And customs is going to start asking more and more questions of the general importing and exporting base. You know, what are you doing? How are you doing? Do you really know what you’re doing? I think the third thing is, is that we bring a set of tools with us that are tried and true. We’ll use different systems that are deployed now. We don’t have a trade management system that we deploy. We’ve got partners that have those, but we’ve got many different tools that we use. You know, one such thing is your military end use that’s starting to be become very big. A lot of it’s in China, Russia, Venezuela. How do you know who you’re selling to in China. What are they going to do with the products? And we actually go through and do a see through on that and say, well, your customer over in China, where do they get most of their revenue from? And what happens if it’s any technology that’s going to China in the end, use is in the military, or they get most of their revenue from selling to the military, you better watch your controls on those exports. Okay? So we can supply your people with that type of information for them to make better decisions and work with the management on how to keep goods flowing, but stay compliant.

John Mack 9:57
That’s That’s excellent, Joe. And I’d say, would you? To further, further to that. To your point. You know, when you know the laws are constantly changing. Joe has said numerous times one of the greatest things he loves about this industry is that as soon as you learn something, they go and change it. Right? So that’s, that’s the the fun complexity of the world that we live in. But you know, why don’t you? You know, we can allow our customers to focus on making their widgets and lead the compliance to us, whether that’s, you know, a detailed analysis on this forced labor Prevention Act, or just even the classification project or deny party screening. I mean, it’s critical for these customers to know who their customer is. Know your customer. You can’t be shipping stuff all over the

Andy 10:39
world. I guess that you’re, you’re hitting on something though, that I was going to ask so it’s like, what you’re looking at is being able to provide resources and in staffing for a specific project or a specific timeline, or is it just always ongoing, or I’m hearing it’s more project based in one

John Mack 11:01
it could be, I mean, that’s the thing we can, that’s, I mean, Joe, you know, correct me if I’m wrong. But, you know, I think what, what makes us unique is that we, we can be nimble, so we can, whether, you know, Andy, if you have a one off project, you know, we could, we could look at taking that on for you. I mean, or we can be as integrated and be a part of your company. I mean, we have, we have accounts where we use their provided equipment, laptops and sign into their systems. We’re effectively an employee of that customer. Or we can work with a partner, and, you know, act on their behalf. You know, a similar partner that can’t handle the workload. So they have a monstrous project. They could give that to us. And we can work on it for them and pass through. So it’s any, it’s anything, that’s what I think is so, so exciting about what we can provide. You know, whatever the solution is, we can try to find a way to help you out.

Andy 11:53
Yeah, okay, so here’s something.

Joe Burks 11:56
Understand, one more thing there, Andy is We are licensed Customs brokers. We don’t file entries and we don’t have a filer code, but we are licensed to conduct customs business, and that’s something we’re seeing customs do more and more. There’s been a couple of decisions lately that says, you know, wait a minute, you know, you want to do classification from Canada. It’s customs business, and you can’t do it from Canada, okay, unless you’ve got the proper oversight. Well, it was vigilant. We are using us resources and tools to be able to do that work, and we’re licensed and acknowledged by customs and border protection to conduct that work.

Andy 12:37
But if you’re an executive Joe of a company, what do you recommend? Or Joe with John, for that matter, for preparing somebody. If you’re wanting to consider outsourcing some functions or bringing in you guys for a particular project, chances are there is a compliance group that’s already there, and yet, they’re already stretched thin, or they’re they’re not. Maybe they don’t have the expertise, but they fit. May feel like they’ve been around there for a long time and whatnot. Do you have any suggestions for an executive or upper management in preparing to bring in a company like vigilant, or some other vendor to to take on a scenario?

Joe Burks 13:25
Yeah, well, I want to start off there Andy by saying, you know, I’ve been doing this for 35 plus years. And question executives always say, How many, how many people can you get rid of? And you know, one guy I worked for would say, it’s butts out the door. How many butts out the door? And you’d have to, I would look at him, and I would say, you know, look, it’s not about butts out the door. It’s about maintaining a level of compliance. You’re not going to give me unlimited labor to remove all risk, and rightfully so, but what we have to do is get companies to understand is that it’s about reducing that risk and what that biggest risk becomes. That’s where vigilant comes in. Allow us to do that daily work for you so you’re not bogged down within that restricted party screening. We find people all the time they got Fox watching the hen house customer service does it well, they’re driven to get orders out the door not to do the right thing. We’ve got trained teams that can do that classification the same type of thing. Then it allows their teams to be more react or more proactive and dig into the details of these new programs that coming up. Andy, you know you were on one of my episodes of trade buzz with Joe. And what I do with trade buzz with Joe is we talk about a lot of those issues that’s coming up. Just did one a couple of days ago that talked about the changes to 19, CFR Part 111, the broker regulations. Yeah, and a lot of importers are going, hey, no big deal. No big deal. What they fail to realize is there’s a section in there on brokerage oversight that says, if you’ve got a customer that is doing something wrong, then you have to write a letter to them and put it into a file and document it. Now understand what that means by them making that documentation. If they happen to go to that broker and say, Tell me about this importer, those records are now discoverable, and you have to look at those

Andy 15:34
and they’re not held in. They’re not held in in a client privilege, or attorney client privilege, because all that it’s, it’s a whole different ball game, and

Joe Burks 15:45
that’s what it is. Well, it also, if you find, you know, you take three or four months to go through and analyze the issue and do a voluntary disclosure, and they go, Okay, did your broker know about it? Well, yeah, they told us three months ago. And they go, oh, wait a minute, you took three months to file this disclosure. You know, what is it? The value that we bring is we have all that data behind the scenes to help you with that, and then we do that day to day work so people can focus on making sure that they understand the implications of those regulations. They’re working with their brokers and making sure there’s no issues or concerns a lot of times, because trade is always stretch for resources. It’s just a fact getting in

Andy 16:30
well, to your point, is it, I think you hit on something, though, is that by outsourcing the day in and day out type functionality, compliance, or even a customer service type thing, or checking some things out that you’re able to do it would free up the staff to now apply their expertise into areas within that company. They know their company, and they can navigate within their probably better than you or anybody else, for that matter, but it now frees them up to be to apply that expertise that they know of internal to the company, so that they’re now more effective in their compliance role, so that I see that as a phenomenal thing, and that’s one of Those where in talking through with these clients, I guess the other scenario here is, and John, let me throw this at you, I guess is that in the things that y’all are doing, whether it’s a special project or not, are you able to help Your clients reduce exceptions? Yeah,

John Mack 17:40
I would, yeah, absolutely, because, to your point, Andy, you know, focus on making your widgets. Let leave the compliance to us. We’re the experts at it. You know, you don’t need to try to boil the ocean. We already, Joe, for example, is has probably forgotten more than most people are ever going to learn, quite frankly. So, you know, yeah, absolutely, we can help reduce, you know, potential risk by helping support their internal staff, not replace them, not butts out the door, but support them and let them focus. We had a conversation Joe, who was the gentleman right before Christmas, where he was in the same boat. He’s like, I’m I’m a one man show. And, you know, maybe he has a couple of people working for him, but I’m drinking from a fire hose, you know, he’s like, I don’t know what I don’t know. And we just went through our basic presentation, and we discussed, and there are at least two or three things that he the light bulb went off. He’s like, you could help me here, you could help me here, you could help me here. And so it’s almost, you know, I don’t mean to speak for you, Joe, but I think sometimes, you know, working with our customers is almost like a, you can see, like, almost a sigh of relief. They’re like, Oh, okay, you know, thank goodness I can, I can get some, get some support, instead of me trying to do it all myself, you know. And that’s, you know, I and I’m new to vigilant, you know, I’ve been here about seven months at this point, but that’s a consistent theme that I’ve seen with the people that we’ve spoken with. They’re, you people need help. You know, it’s people are busy. People need help. And the regulations are changing. The world is changing, and not necessarily for the better, sometimes. And so you know your your compliance is is critical to your business, and we could be an extension of your business to do it for you.

Annik 19:21
Hey, everyone. We’re getting ready for another annual ICBA event coming up the week of March 12, in Orlando, Florida. If you have been thinking of attending any of the ICBA conferences, this is no one mission not met. There will be more sessions than any other conference with a guaranteed self so hurry and get your tickets today. We’re also excited to share that simple trade. Podcast. Will be in attendance, and we want you to be part of our show. Listen to episodes 1415, and 16 to find out why. Don’t

Joe Burks 19:51
know that I could have said in any better. Well, I see where,

Andy 19:55
wow, yeah. Well, I was just gonna say, is that it’s, it’s where it. You know, in what the services that y’all are trying are not trying, but do provide. It’s you’re coming alongside the compliance. You’re not taking over, you’re not trying to kick me, you’re coming alongside them.

John Mack 20:14
But imagine, imagine you’re the executive on the C suite, and you had, you know, 10 containers come in that were made with weaker cotton, and your compliance team didn’t do their due diligence, and every single one of those containers has to be either destroyed or re exported, and you got nothing to sell, and you got how many months of the

Andy 20:33
supply chain you’ve already paid millions of dollars, probably, or hundreds of 1000s of dollars. I mean, that’s,

John Mack 20:38
that’s, that’s a tough conversation to have with the press.

Joe Burks 20:41
I would like to expand on that John is because one thing and Andy, you’ve seen the little wheel that I have trade compliance. They don’t sit in their own little kingdom. They actually have to work with every department within the organization. Trade doesn’t understand that that cotton is weaker cotton, they have to work with the supply chain team to make sure they understand what those rules are and create a partnership that says, hey, here’s the additional vetting questions that you need to add when you go to certify a vendor. You need to add these to your contracts that you sign with the vendors that say, you know, you can’t use any weaker forced labor, whatever the case. And that’s even from an export site as well. And that’s that’s something that we need to see more and more of. But trade encompasses every department in an organization. Okay, trade is not an island unto its own. In a past life, they were looking at changing the source on products to Brazil, because the vendor says, oh, yeah, you can use GSP. So supply chain manager came to me and said, you know, hey, is this eligible for GSP? And I looked up the HTS, and I go, Yeah, but you also have to make sure that your vendor understands, because it’s explicitly stated in the GSP regulations that the vendor must agree if so asked by customs and border protection to open their books so they can prove that so Much of the growth of that product was for that beneficial country. And when I went back to the supply chain manager with that and gave him the statue and the regulations, the vendor goes, nah, that ain’t gonna happen. And we didn’t end up sourcing because they would have to add for that additional risk, they weren’t interested in opening their books to anybody, and quite honestly, we don’t know where they were getting all their products from. Were they just importing it and assembling it there, which goes against what GSP is, right? General, generalized systems preferences, is designed to benefit underdeveloped countries, and if they’re just importing it, assembling it, that’s not really benefiting that country. So that’s the thing

Andy 23:04
that, well, there’s another one, just as you’re going to go Joe is like, for example, the NAFTA 2.0 or US Mexico, Canadian agreement, usmca, I think is what we call it here. But that’s another great one. There’s a lot of manufacturing, obviously going down to Mexico and and a lot of components are still coming from China. So they’ll do the the assembly or something, and they go through, and the usmca regs say that now that it’s up the percentage of requirement for North American country of origin, for the goods, the raw goods. And so there’s that. Plus, you know, there’s a lot of China components that come in, and they’re getting hit with the China tariffs, because the 301 tariff, because it has so many China components in it. Well, that still comes back to well, how do you vet that? And how do you look at these products? And then and zero in, you got to have resources to be able to deal with it, not only on a specific project, but then also on a day in and day out. Andy.

Joe Burks 24:17
Not too long ago, there was a manufacturer that made their product in China. They got hit with a 25% 301 duties. So somebody had the bright idea, well, let’s just pick up that assembly line and move it to Mexico. Yet they still brought in all those raw components from China. Well, the government got into it, and they said, Well, okay. Well, let me, you know issue, let me apply for a ruling. And they were quite disturbed when they found out that, yes, it was eligible for free trade agreement, so it had zero normal duties, because it did qualify for usmca, but they still considered a product of China in. It was subject to three, oh, ones. It’s counterintuitive, but those are the things that we’re starting to see in the industry anymore. You know, the whole whole idea was to put these additional duties on stuff from China, and people are trying to find ways around it, and rightfully so, they should, but they have to make sure they’re doing the proper research so you don’t end up with a repercussions of the cost of moving that line, only to still get impacted by the 301, duties you talk about that granite countertop. The idea is, you know, and I’ve done this in past, past lives, is where it’s not only working with the supply chain team, but do you get with the designers, the engineers and say, Hey, wait a minute. Is there a way that you can call this cabinet out and the granite countertop as a separate line item and price them each? Because if you integrate it into the cabinet, you’re paying add on the whole thing, rather than just on a granite countertop. So how can you tweak that design ever so slightly where now you’re bringing in that, that granite piece that I don’t know if it bolts on or whatever, but now you can bring that in and put it on once it gets to the US, and only pay anti dumping on that granite. That’s the value behind I guess, bringing everything around is that by giving your trade people the ability to do that research and do that work, vigilant is the one that does that day to day task, so they’re not having to focus on classifications or restricted party screening. We do that so they can now look at duty saving opportunities.

Lalo 26:50
And Joe, we previously had a guest on a kickoff show on our first show of the year, who very well put. I mean George, George Tuttle, he very well put it this way. He said, where it used to be that trade was a matter of filling out the right paperwork and getting it in, across borders, etc. It’s now. Trade has now become a barrier. You know, now you get these regulations and, and, and, and, you know, like anti dumping, or the weaker and all that. And so it’s, it’s now a barrier and and you now need to know how to deal with those barriers, where, whereas, again, you know before, yeah, you had someone that knew very well how to fill out the Sandy 501, you know, which, which, which is fine and dandy, but you never know what’s going to get you in trouble. This, that’s behind that. Layla, yeah. So anyway, I just, I just like that, that that fact, and I like the fact that you can look behind the scenes and maybe have this staff, the in house staff, fill out that paperwork where, when you’re making you’re helping them make those decisions in the back, yeah,

Joe Burks 28:06
well, creating that partnership is very important. And Andy, you know, we’ve talked about this at icpa for years, is you’ve got to create those partnerships. Because what happens is, you build that trust, then they’ll come to you and ask you proactive questions, rather than you having to find the problem and go to them and go, Wait a minute. I didn’t know this was happening, because that’s when you’re in trouble.

Andy 28:33
All right, so let me ask you guys, is that, if somebody’s looking at this and going, all right, you’ve got me hooked. This is an idea that I want to talk a little bit more on. I’m not prepared to sign a contract yet or whatever. What do you suggest that a leader of a company, executives of some kind, what should they be looking at before they even reach out to you to say, should they learn what their business is, what their processes are, or whatever, or in looking at it so that you can look to see where the opportunities are, or what do you suggest? Andy, follow up a little bit

Joe Burks 29:14
more. Yeah, and without a doubt, one of our offerings is what we call an assessment, where we’ll come in and spend a couple of days with your folks and the value, and I mean, your folks can do that internally. The problem is, is that they may not have the depth of experience to be able to ask the right questions. Over the period of years, we’ve developed a script where we talk to all the departments and start asking questions. But the other thing that we do is we also validate in the sense that, well, here’s what supply chain said, but does receiving agree with what supply chain said? We’ll ask the same question. But what that does is it starts to show where the things that they need to do to improve their trade program. So it’s all in all, a great it’s a great thing, and that’s what we get a lot of customers that want to do that, and then we write up what, where the shortcomings are, and then they can go off and fix it, or we can help them fix that.

Andy 30:15
All right, guys, any last words to wrap up today’s show. This has been a good conversation. I’d love to do some more of this with you guys.

Joe Burks 30:23
We’re always here for you, for you guys, so you just let us know. We’ll gladly come on if you have a specific topic. We’ll do that and throw a shameless plug in for trade. Buzz with Joe.

Lalo 30:36
You know, of course, I was about, I was about to say that, so I was going to say, Joe, yeah, we’ll put links for you also on the show notes, so that people can get to the podcast. So just so everybody knows, Joe does also have a podcast that on trade, very different approach to what we do, but but good information as well. So so we, you know, we do recommend that you take a listen when you have a chance at his show as well. Thank you. Layla,

Andy 31:06
Well, John, any last words

John Mack 31:07
from you sir? I thank you and lay low both. Thanks for the opportunity. It’s been a pleasure, and we’ll hope you guys, we’ll see you at icpa here in the spring. We don’t talk before then we will,

Lalo 31:18
yeah, we will

Joe Burks 31:21
appreciate you guys bringing us on. And you know, I think it’s a great thing you guys are doing. It’s like trade buzz with Joe. It’s about informing the trade community about what’s going on, and we work together as a team. And that’s, that’s the key thing