Regulatory Compliance Management

Regulatory Compliance Management

A FLEXIBLE APPROACH TO IMPROVING COMPLIANCE
INSTRUCTIONS :
YOU HAVE JUST BEEN APPOINTED TO THE NEWLY CREATED POSITION OF NATIONAL MANAGER COMPLIANCE IN THE CUSTOMS DEPARTMENT OF THE DEVELOPING ISLAND COUNTRY OF BELMONTIA.
DUTY AND VAT/GST COLLECTED BY CUSTOMS ON IMPORTED GOODS AMOUNTS TO APPROXIMATELY 60% OF THE GOVERNMENT’S TOTAL REVENUE.
IN AIDITION TO ENSURING THAT THE CORRECT AMOUNT OF REVENUE IS COLLECTED, CUSTOMS HAS RESPONSIBILITY FOR PROTECTING THE COMMUNITY BY ENSURING THAT PROHIBITED ITEMS DO NOT ENTER THE COUNTRY AND THAT THE NECESSARY PERMITS AND LICENSES HAVE BEEN OBTAINED FOR CERTAIN GOODS.
ALTHOUGH NO REVENUE IS LEVIED ON EXPORTS CUSTOMS DOES HAVE A RESPONSIBILITY TO ENSURE THAT RELEVANT PERMITS OR LICENSES HAVE BEEN OBTAINED WHEN REQUIRED FOR THE EXPORT OF PARTICULAR GOODS AND THAT GOODS WHICH ARE PROHIBITED EXPORTS, ARE NOT EXPORTED.
BELMONTIA IS RESOURCE RICH AND HAVING EMERGED FROM A PERIOD OF POLITICAL INSTABILITY IS NOW ON THE VERGE OF A PERIOD OF RAPID ECONOMIC GROWTH.
IT IS QUICKLY EMERGING AS A MAJOR TRADING NATION WITHIN ITS GEOGRAPHIC REGION. IN AIDITION TO FIVE INTERNATIONAL PORTS BELMONTIA HAS TWO INTERNATIONAL AIRPORTS.

DURING YOUR FIRST MEETING WITH THE DIRECTOR GENERAL (DG) OF CUSTOMS HE/SHE TELLS YOU THAT THERE IS PRESSURE FROM THE FINANCE MINISTER TO ENSURE THAT REVENUE TARGETS ARE MET AND THAT THE TRADE MINISTER IS ALSO CONCERNED ABOUT COMPLAINTS FROM TRADERS OVER THE TIME TAKEN TO CLEAR IMPORTED GOODS, DUE MAINLY TO THE HIGH LEVEL OF INTERVENTION BY CUSTOMS (DOCUMENTATION MUST BE SUBMITTED IN SUPPORT OF ALL IMPORT DECLARATIONS AND MORE THAN 50% OF CARGO IS INSPECTED).
IMPROVED FACILITATION OF TRADE HAS ALSO BEEN IDENTIFIED AS A KEY PRE-CONDITION BY A DONOR PROVIDING FUNDING FOR A MAJOR INFRASTRUCTURE PROJECT.

RECENT MEDIA ATTENTION HAS HIGHLIGHTED AN INCREASE IN THE AVAILABILITY OF PROHIBITED IMPORTS IN BELMONTIA.
THIS AND A RECENT INDEPENDENT SURVEY COMMISSIONED BY A REPUTABLE INTERNATIONAL ORGANIZATION WHICH REVEALED HIGH LEVELS OF NON-COMPLIANCE BY TRADERS HAS PUT PRESSURE ON THE GOVERNMENT TO TAKE ACTION TO IMPROVE CUSTOM’S COMPLIANCE MANAGEMENT.

YOUR FIRST TASK AS NATIONAL MANAGER COMPLIANCE IS TO PROVIDE A REPORT TO YOUR DG PROPOSING A NEW AND EFFECTIVE APPROACH TO REGULATORY COMPLIANCE MANAGEMENT FOR BELMONTIA CUSTOMS.
YOU SHOULD EXPLAIN WHICH ASPECTS OF THIS APPROACH DEAL WITH THE SPECIFIC PROBLEMS FACED BY BELMONTIA CUSTOMS AND HOW/WHY THEY WOULD BE EFFECTIVE.
YOUR PROPOSAL SHOULD IDENTIFY AND INCORPORATE INTERNATIONAL TRENDS AND STANDARDS RELATING TO COMPLIANCE MANAGEMENT.

PURPOSE OF ASSIGNMENT:
TO ENHANCE YOUR ABILITY TO IDENTIFY APPROPRIATE RISK-BASED STRATEGIES TO EFFECTIVELY MANAGE COMPLIANCE WITH REGULATORY REQUIREMENTS.
MARKING CRITERIA:
THE FOLLOWING CRITERIA AND WEIGHTING WILL BE USED IN MARKING THIS ASSIGNMENT:

• DEMONSTRATION OF YOUR UNDERSTANDING OF THE ELEMENTS OF AN EFFECTIVE REGULATORY COMPLIANCE PROGRAM (0.3)

• THE APPROPRIATENESS AND EFFECTIVENESS OF COMPLIANCE MANAGEMENT STRATEGIES TO AIDRESS PARTICULAR PROBLEMS IN AN OPERATIONAL SETTING (0.3)

• YOUR ABILITY TO IDENTIFY RELEVANT INTERNATIONAL STANDARDS AND TRENDS IN REGULATORY COMPLIANCE MANAGEMENT (0.2)

• THE ACADEMIC QUALITY OF YOUR ESSAY. (0.2)
THE ACADEMIC QUALITY OF YOUR ESSAY WILL BE ASSESSED ON:

• YOUR ABILITY TO DEMONSTRATE RELEVANT RESEARCH INTO THE SUBJECT MATTER.

• THE LOGIC OF YOUR REASONING.

• THE CONSTRUCTION OF YOUR ESSAY INCLUDING GRAMMAR, READABILITY, COMPREHENSION, LENGTH AND DUE AND APPROPRIATE REFERENCING.

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The outline
– Small background about the country
The question mention that its :
developing country
has gone through a difficult time but now looking ahead, prosperity and economic growth it has five international ports and two international airports, what will be the result expected economic growth ?
passengers? Cargo? Port facilities ?

it’s a typical situation of a developing country.
– Why they need those changes ?
– traditional approach ( gatekeeper ) they have to use modern methods.

The solution ,
Ch1, They need to develop a cooperate plan to manage risk, example from Revised Kyoto Convention guide lines.
Ch2,1 probably a legislative review and timeframe for it
To do what? Legislative management
Simplification of process, strengthening enforcement powers, enabling information exchange with industry, improving transparency, meeting international standers (reference and example) RKC Guide lines+ GATT+WTO articles.
You need to refer this to the compliance pyramid.+ self assessment, easy to comply with , cost effective reporting etc.
Ch2.2 electronic lodgment of declaration, digital signature ( RKC standers) electronic payment, exchange of information etc, RKC example. + administrative penalties for non compliance, example.
Ch2.3 reward for compliance ( give an example used internationally ) and how they meet RKC guidelines, one can be used in the case above.
Ch2.4 breaking the link between control and release, here u can give an example from the WTO valuation agreement because physical presence of goods is not required to determine the value of goods.
Ch3 client handling, You can recommend client service strategies in the second tier of the compliance pyramid discuss it with some examples from the real world.
Ch3.1 what we call client service strategies ? informed compliance, RKC
(risk based compliance management pyramid, wiIDowson 2004)
Ch4 compliance assessment/ management, you can use OECD reports and statistics to compare how the current compliance management regime must change.
Ch4.1 post clearance audit, post clearance audit using audit techniques, must be based on proper risk management strategies, proper balance should be maintained between control and facilitation.
Ch4.2 improved risk identification practice, I leave this for you
Ch4.3 pre arrival information
Ch4.4 clearance on arrival

Any international examples and experiences will be an advantage.

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