Three big changes in the logistics and supply chain industry have raised the regulatory bar: the electronic logging device (ELD), the Food Safety Modernization Act (FSMA) sanitary transportation rule, and implementation of the Automated Commercial Environment (ACE).
“Weave them together and you’ll see that there is a bottom-line cost and time investment that’s imposed on this industry,” commented Michael Burke, a partner in the Washington office of Arnall Golden Gregory LLP who moderated the panel discussion “Keep it Legal – Review of the Upcoming Regulatory Tidal Wave” at the Georgia Logistics Summit in Atlanta.“Our Congress, our regulatory system in Washington may not be able to agree on much, but they can agree on how to regulate this industry to the nth degree,” he said.
Mr. Burke is a corporate attorney who advises clients on cross-border M&A deals, export controls, the Foreign Corrupt Practices Act and U.S. anti-boycott regulations.
He was joined on the dais at the Georgia World Congress Center by Jason Craig, director of government affairs at C.H. Robinson, Jaymie Forrest, chief supply chain and commercial officer at ScanTech Sciences, and Rhett Willis, president and CEO at DJ Powers.
Mr. Craig described the controversial ELD mandate. The day after the Federal Motor Carrier Safety Administration(FMCSA) announced the final rule in December, the Owner-Operator Independent Drivers Association filed suit, saying the ELD impinges on drivers’ rights. As it stands now, commercial truckers will be required to use the devices by December 2017.
Mr. Craig also discussed the new coercion rule that describes how drivers can report coercion to the FMCSA. The rule allows FMCSA to take action against motor carriers, shippers, receivers and transportation intermediaries.
Mr. Willis discussed ACE, the single portal for the paperless collection of data for Customs. He cautioned that with ACE all information is visible to the government, increasing the potential for inspections that delay shipments and financial penalties for inconsistent or late data entries. Implementing a rigorous compliance program is essential to avoiding trouble.
Ms. Forrest addressed the FSMA and treatment of perishable food to make it safe over a lengthy period. Under the FSMA, FDA has the power to establish new standards for preventing adulteration and stop trade if it suspects there is a safety issue. Training and record-keeping are more important than ever. She said understanding all the implications of this law requires a team approach at each company.
One of the questions Mr. Burke fielded from the audience concerned how ACE might make importers more vulnerable to False Claims Act penalties. Accurate recording keeping by the importer, correct communications with the broker, and validating the broker’s entries, will lessen the risk of a False Claims Act violation, Mr. Willis answered. He added it’s important to respond quickly to Customs with proof of good-faith compliance efforts.
About Arnall Golden Gregory LLP
Arnall Golden Gregory, with approximately 160 attorneys in Atlanta and Washington, DC, employs a “business sensibility” approach, developing a deep understanding of each client’s situation in order to find a customized, cost-sensitive solution. A past honoree on The National Law Journal’s prestigious Midsize Hot List of forward-thinking law firms, AGG advises on corporate, litigation and regulatory matters for numerous industries, including business services, healthcare, life sciences, logistics and transportation, real estate, franchising, information services, energy, and manufacturing. AGG is a solutions partner that subscribes to the belief “not if, but how.”
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