A fly on the wall at an executive retreat for Acme Super Duper Widget Company overhears the following conversation between Pete, the CFO, and Saira, the General Counsel.
Pete: I was speaking with George [the CEO] earlier today and it looks like we’ll be announcing an across-the-board cut of management heads. He said we need to consolidate redundant roles, and we especially have to get rid of the deadwood who don’t provide any value-added benefit to the Company.
Saira: Yeah, he and I had the same conversation. I was frank with him—I told him that my team is as lean as it can be. I really don’t have anyone who I’d consider non-essential or redundant.
Pete: Oh, c’mon Saira. We’ve all got to take a hit here. I know Legal has a small headcount, but there must be someone who you can cut. How about Erika, your trade compliance manager? I can’t remember the last time I heard about any trade compliance problems. I know she’s done a lot of training and put some processes in place, so our people ought to now know what they can and can’t do. She seems to have everything running smoothly—there must not be any issues, right? Do we even need her anymore? Does she even have enough real work to keep her busy? Isn’t a lot of this trade compliance stuff just busywork that doesn’t add any value to the company? You know me—I’m all about the bottom line. And by the way, I’ve heard she’s causing problems for sales—I don’t appreciate that she told our sales team in Dubai that they couldn’t sign a big contract with a potential customer in Iran. For crying out loud, if she can’t be a team player—
Saira: Pete, why do you think you haven’t heard about any trade compliance issues? It’s not because there haven’t been any—trust me, we’ve had our share. The reason you haven’t heard of any big problems is because we have a pro like Erika who proactively protects the Company every single day, whether you hear about it or not. It’s her job to steer us clear of dangers, like that sale to Iran. And if we ever do have an issue, she knows how to mitigate the damage and make sure the appropriate corrective actions are taken. I’ve explained to you before how serious the penalties can be for various trade compliance violations, and I know you’ve heard the same message, several times in fact, from Erika. And I know you’ve attended her mandatory training sessions, right? Yes, we’re here to make money, but what good is a strong bottom line if you or George or I or one of our employees end up wearing an orange jumper for ten years? Look, Erika’s established great working relationships with the regulatory agencies that control our international activities. You can’t put a price tag on a good reputation. And a good reputation isn’t just to impress the government—don’t we want to show our customers and suppliers that Acme Super Duper Widget is a competent and ethical company to partner with? That we’re a good corporate citizen that plays by the rules, even when the rules put limits on what we can do? Erika’s worked hard to implement a best-in-class trade compliance program on a limited budget—policies, procedures, training, automation, communication—but it’s not a program that runs on auto-pilot. The rules are complex and constantly changing, especially for a global company like ours with cutting-edge widget technology. We’d be in trouble if Erika wasn’t monitoring all the regulatory changes to make sure our processes and policies are keeping pace with the changes. She’s succeeded in instilling the right mindset into our corporate culture, the mindset that compliance is everyone’s responsibility. Right after George told me about the RIF, I asked each of my direct reports to give me a “day in the life” summary of their typical workday. Let me forward to you Erika’s summary for last Friday, and then you can decide for yourself whether she’s an essential employee or, to use your word, deadwood.
Later that day Pete opens his email and reads Erika’s “a day in the life” summary:
7:45 Arrived at office.
7:55 Determined HTS/ECCN classifications and licensing requirements for widget production equipment going to factory in South Africa.
8:05 Called BIS agent in Miami to discuss resolution of detained export of widgets.
8:17 Reviewed deemed export request for sharing widget technology with contract manufacturer’s operations in China and Vietnam.
8:25 Conducted training for sales and customer service teams on antiboycott regulations.
8:32 Determine whether OFAC General License 30A is applicable to proposed sale of radar widgets to Simon Bolivar International Airport in Caracas.
8:41 Reviewed and responded to red flag reports received overnight from EU and AP sales offices.
8:47 Drafted letter to revoke POAs for former customs brokers.
8:51 Met with GC to review draft of our petition to DOC alleging that imports of Chinese-made aluminum widgets are subsidized by Chinese government.
8:58 Discussed wood packaging requirements with shipping/receiving manager.
9:05 Drafted and submitted HTS eRuling request to CBP for new widget testing instrument moving from design to production phase at Japanese R&D facility.
9:12 Met with HR to review new draft language of policy for hiring foreign nationals for engineering roles requiring access to ITAR-controlled tech data.
9:22 Conducted specially-designed assessment of components for widget testing instrument.
9:30 Met with IT web team to discuss updates to trade compliance intranet page.
9:38 Spoke with BIS regarding questions about MOFCOM end-user statement submitted with license application.
9:43 Reviewed and resolved ISF issue for containers in port of Savannah.
9:49 Reviewed and responded to CF28 re valuation of Malaysian widget parts.
9:53 Called account manager at primary broker to discuss our expectations regarding use of Section 321 on low-value imports.
9:56 Met with customer service and sales to explain the license conditions listed on recent license received from BIS for widget sale to a government entity in Paraguay.
10:10 Discussed with EU counsel an EU blocking statute issue regarding order received by Slovenian sales office from a Cuban customer.
10:16 Drafted and submitted CJ to DDTC for new model of mil-widget.
10:23 Reviewed and resolved in-bond T&E entry that was not formally closed upon exit re widget components transferred from MX factory to CA factory.
10:35 Met with GC and outside counsel re potential litigation challenging DOC’s AD/CVD scope ruling on Turkish widgets.
10:40 Fielded a call from GM in China to discuss proposed in-country transfer of equipment and technology to contract manufacturer.
10:48 Gathered facts from purchasing regarding CF-28 alleging Lacey Act concerns about Indonesian wood used for making widget cases.
10:57 Met with M&A team to review findings from deep-dive of target company’s trade compliance program.
11:00 Met with primary freight forwarders (quarterly meeting) to discuss service, metrics, and issues.
11:06 Met with supply chain team to review UFLPA-related findings re mapping of Chinese vendors’ sub-tier supply chains.
11:15 Drafted guidance on how widget exports to Australia and the UK are affected by BIS’ new licensing rule.
11:29 Met with engineering team to review new template for country-of-origin labels.
11:40 Discussed reexport licensing requirements for stock transfer of U.S.-origin widgets from Singapore to Vietnam.
11:51 Met with sales team to explain the exclusion process for section 301 duties.
11:58 Reviewed transactions for possible drawback eligibility.
12:11 Ate lunch.
12:20 Noticed cat stuck in tree outside my office; shimmied up the tree to save the cat.
12:30 Read various sources of trade news and analysis.
12:40 Called GM of our maquiladora in Jaurez to escalate unresolved documentation issues with recent imports.
12:46 Began revision of end-use questionnaire and certificate.
12:52 Analyzed whether substantial transformation of widgets occurs in Malaysia rather than Korea under proposed realignment of manufacturing process.
12:57 Explained to customer service the requirements for transacting with a VEU entity in China.
1:03 Sent updated HTS/ECCN classification database to brokers and forwarders.
1:11 Reviewed year-end price adjustments for reconciliation-flagged entries.
1:26 Met with IT to discuss upgrades to trade compliance functionality in ERP.
1:37 Analyzed scope of recent antidumping and countervailing orders regarding Chinese and Indian widget motors.
1:47 Researched whether first-sale is a valuation option for imports of widget accessories from Malaysian distributor’s supplier.
1:52 Submitted license application for deemed export of widget technology for UAE trade show.
2:00 Conducted an Incoterms training session for sales, purchasing, logistics and finance teams.
2:16 Filed a protest with CBP over CF29 that disallowed 9817 treatment for widgets designed for disabled persons.
2:22 Performed encryption analysis of our latest widget communication module under § 742.15 and CCL Cat. 5-Part2.
2:34 Reviewed monthly metrics for withdrawals from our three FTZs.
2:41 Updated related-party valuation policy for intercompany transactions.
2:48 Met with widget engineering director to review the FCC’s import rules.
2:57 Revised the “international transactions” section of our new Code of Conduct and sent draft language to GC for review and comment.
3:04 Worked on annual revision to the company’s Technology Control Plan.
3:12 Discovered that a sub-tier supplier was added this morning to CBP’s forced labor entity list, and scheduled an emergency meeting with Procurement, Engineering and Legal for Monday morning.
3:19 Met with GC to discuss whether we will request a foreign availability assessment from BIS regarding license denial received for proposed widget sale to Kazakhstan.
3:25 Conducted GSP qualification analysis on steel flanges from Bhutan under heading 7307.
3:35 Met with IT and software vendor regarding integration plan for new trade compliance system.
3:49 Drafted recordkeeping presentation for next week’s training session at Peoria distribution center.
3:55 Revised the policy regarding import requirements re goods returned for repair or replacement.
4:00 Met with sales and legal to revise the company’s standard terms-and-conditions to include applicable trade compliance language.
4:16 Drafted memo re trade compliance issues with factory relocation from Korea to Vietnam.
4:29 Reviewed joint-venture contract for terms related to transfer of technology to JV’s engineering team in Indonesia.
4:39 Submitted license application to BIS for sharing technology with Egyptian engineer hired for ultrawidget development team.
4:44 Met with supply chain and logistics teams to answer questions about the CTPAT minimum security criteria.
4:51 Drafted memo for GC re applicability of NRC and DOE regulations to widgets designed for nuclear power plants.
5:01 Discussed import quota rules with GM of new “cheddar cheese widget” division in New Zealand.
5:14 Reviewed assist provided by Korean engineering firm re mil-widget production in Japan.
5:28 Discussed with freight forwarder an EEI error re export of calibration equipment to Sweden.
5:47 Met with supply chain director to discuss WROs under the UFLPA.
5:58 Reviewed supplier specs to determine whether zirconium heat exchangers are subject to 2B350.d.7.
6:06 Leave office.
9:32 Catch-up on new email to get a head start on Monday’s urgent issues.
The next morning Pete saunters into Saira’s office. The curious fly follows Pete in and finds a comfortable resting spot on the wall.
Pete: OK, I’ve read Erika’s summary, and I can see why you might think Erika’s done a good job. Obviously, she’s staying busy. I’ll grant you that she seems to be really really good at time management! But don’t be blinded by the fact that she finds stuff to keep herself busy. A lot of the stuff she says she does is just gibberish. Like reviewing red flags—sounds like busywork to me. I just don’t see the ROI. D-E-A-D-W-O-O-D. And if, like you and Erika say, compliance is everyone’s responsibility, then that just puts a cherry on my point. So, if our compliance issues are all buttoned up and we’re all responsible for compliance, then remind me again why we still need Erika? Like George said, we’ve got to trim the fat. What’s the worst that could happen? Like with that Iran sale she nixed—why would the government even have to know about it? Why did Erika have to stick her nose where it didn’t belong?
Saira (shaking her head in disbelief): Where it didn’t belong?? Seriously? Stop talking, Pete, before you dig yourself a hole you can’t climb out of.
Pete: I think we just need to do a better job of keeping things like that Iran deal under the radar.
Saira: Stop it, Pete. You can’t—
Pete (interrupting—head tilted, voice rising): It was gonna be a huge sale for us, by the way. Bonuses are affected. You’re the GC, Saira—if there’s ever a problem can’t you just pick up the phone and make the boo-boo go away? Wave that magic wand of yours? As they say, isn’t it better to ask for forgiveness rather than permission? Maybe when business picks up, we can afford the luxury of another Erika to rescue stray cats from trees.
Saira (exasperated): Pete, did you listen to a single word of what I said yesterday? Did anyone ever tell you you’re a real …
At this point, the fly on the wall decides it has heard enough. Even a fly could recognize Erika’s value. It flies away, in search of a less frustrating conversation.
