Cindy Deleon - Trade Compliance Consulting
Cindy Deleon is the principal of Deleon consulting. She started as entry level auditor (requires accounting bachelors degree), then a senior auditor, then an assistant field director of the Chicago office. In 2007, she moved to Texas and started doing consulting work while waiting for government transfer paperwork.
Importers come to Deleon trade because (1) they have received a “request for information” from customs and need to respond to an issue or (2) they are being audited or (3) least commonly, are being proactive.
Two general types of audit (1) single issue audit (classification, value, or FTA eligibility) or (2) focused assessment. There is a misconception that customs isn't doing focused assessment anymore but she can attest that they are. The objective a focused assessment is to determine whether the company has adequate internal control and written procedures to ensure compliance with laws and regulations.
5 components of internal control: Controlled environment Controlled activities (written policy) Risk assessment (to focus limited resources on the greatest risk) Information and communication (within company and with brokers and suppliers) Monitoring (internal audits)
Importance/usefulness of Automation: no matter how good the provider it all comes down to whether it's used properly and what systems the importer/exports has and what data is accessible.
Deciding a career path: don’t worry about deciding your whole career now many different paths auditing, brokerage, importer get a brokerage license
Mentoring: every hurdle can be solved with food be prepared, have questions, truly interested most people want to give back
Professional organizations & Certifications: National customs brokers and freight forwarders association: cert customs specialist and certified export specialist (Federico zunida) - National education institute OWIT - Houston not active but other cities are active and are fantastic License customs broker certification
Do you have to choose a speciality within International trade compliance?(import or export) It takes a certain personality to be a compliance person because there is so much detail start out in brokerage help with paperwork and learn, then move to work for an importer with gradually increasing responsibilities many people start in logistics and move to compliance as responsibilities expand then more formal training should follow
Educational background required for this career path: Many different degrees are relevant: supply chain, accounting, finance, Legal, or no college degree its really a manner of continuing education and making sure your skill set and background is well suited for your responsibilities
Contact us:
Email: womenintradepodcast@gmail.com
Twitter: @TradePodcast
Full Episode Transcript:
Introduction (00:01):
Welcome to Women In Trade, a podcast for up and coming professionals like you in the field of international trade. Kellie Kemock is your guide on this journey, an accomplished lawyer and trade compliance consultant who's passionate about helping young women navigate this complex field, equipping you with the tools and resources you'll need to pursue an exciting and meaningful career. You'll hear candid interviews with other successful female leaders and benefit from their experience. It's time to build the career of your dreams. Here's your host, Kellie Kemock.
Kellie Kemock (00:41):
In today's episode, we'll be talking to Cindy Deleon of Deleon Trade in Houston, Texas, and asking her about the best way to start a career in trade compliance.
Cindy DeLeon (00:52):
There are many different paths that one can go down if it's auditing, if it's the brokerage industry, if it's with an importer as a trade compliance professional, I say, learn, learn, learn, learn. And from there you'll decide where you want to end up.
Kellie Kemock (01:09):
We'll be talking to her about the organizations and certifications to help build a career in trade compliance, and also just a little bit about her work and what trade compliance means to her. So to begin just let us know a little bit more about your background and where you started and how you got to where you are today.
Cindy DeLeon (01:38):
Definitely. Well, thank you for having me, and thank you for taking the time. So a little bit of my background, everything happens for a reason, as they say, but I went to college in Chicago and studied accounting, and during the period of my final year as I was looking for a job, I literally had my resume in the career center database and got a call from the recruiter at US Customs. Back then it was US Custom Service. And when he called me and wanted to interview me for the auditor position, I wasn't interested at the beginning. And I said, You know what? I have my dream job. I had gotten an auditor position at one of the top accounting firms in the country, and I was set to go and he said, Well, why don't you come in and interview Anyway I have a feeling that this might be something of interest to you if you have a family or if you ever end up intending on having the family.
(02:45):
The hours and the government are much more amenable for working women than a big public accounting firm hours are. Yeah. So I was intrigued at that point. So I went in for the interview and they were interested in me because I took an entrepreneurial policy course at DePaul University in Chicago, and that Entrepreneurial Policy course had an import export focus, and the rest is history, as they say. I was very fascinated with the customs position and decided to take that job over the big four job. I did have small children at the time, and it was the right decision for my family as well. And here I am 24 years later.
Kellie Kemock (03:37):
Great. And so you started as an auditor, or in what role did you start?
Cindy DeLeon (03:47):
So when the government, they have the general schedule and entry levels for different positions. I started an entry level auditor, which requires an accounting bachelor's degree and worked my way up to a senior auditor and then became the assistant field director of the Chicago office, one of the assistant field directors. I did many special projects in Washington for assistant, various assistant commissioners and executive directors, and did my time in Washington, as they say. And then in 2007, I wanted to move south to Texas from Chicago and was going to transfer from the Chicago Customs Audit Office to the Houston Customs Audit Office. But as you can well imagine, everything in the government takes so much time to process the red tape of paperwork. And so I had decided one summer I was going to move. It was the right time for my family to move.
(04:54):
And again, constantly trying to put family ahead of career and said, Nope, I'm gonna move. I'm making this right decision for my family. And started consulting and said, I'll do some consulting work while I wait for my transfer paperwork to come through <affirmative>. And gosh, the rest is history, as they say. I never really intended fully on leaving the government. I thought about it. I had a mentor along the way that put some ideas in my head about consulting. And when customs called me to come back to customs, I just really enjoyed the ability to take all that I learned and knew and help importers just achieve higher levels of compliance in a much more efficient manner without the red tape of customs telling me what I could or could not say to an importer or how I could or could not help an importer. Now I really had my hands untied and could really dig in there and assist, and I really enjoyed it, and I've been doing that for 12 years now.
Kellie Kemock (06:03):
Great. So as an auditor, you wouldn't be able to provide any sort of constructive criticism or here's what you can do better, or things like that?
Cindy DeLeon (06:14):
Not with any level of specificity. So you could tell an importer, Look, you need written procedures or you need to build a process around this problem, but you couldn't give them the constructive and detailed assistance in telling them, Here's some ideas, explore these avenues, or here's an example, or here's the people that you need to speak to in procurement or accounting, or these are the systems that you could employ that could help manage this issue <affirmative> and connect them with other service providers and other amazing professionals that have expertise in the areas that they require expertise in. Now, I can recommend and I can explore and I can become a moderator, if you will, between various disciplines within an importing structure and be able to develop creative solutions to things.
Kellie Kemock (07:10):
Great. And so that's your primary task then as a consultant. You started your own consulting firm and as a consultant is it just focused on audits is it that your clients are just focused on auditing?
Cindy DeLeon (07:28):
Not necessarily. Not necessarily. Funny. Importers typically come to Deleon trade because either 1) they've received a request for information from customs and need to respond and realize they have an issue and need to get their arms around it and need help, 2) being audited and need to get their arms around that, or 3) they're just proactive, which is probably the least common most of the time it's a fire drill. So we help importers with represent representing them during audits, with developing written procedures, with developing systemic controls with all types. We do a lot of advanced evaluation because a lot of the service providers out there don't have the accounting background my team has. We do a lot of advanced evaluation for that reason because of our financial backgrounds.
Kellie Kemock (08:26):
If a client is under audit, I mean, you said typically it's evaluation, like evaluation answers that you're providing, but what are some other typical audits that you see? I mean, I know, sure, there are a verification for free trade agreements. What is it that you see most often?
Cindy DeLeon (08:48):
Over the years that pendulum shifts and swings. I would say right now we're seeing a lot of audits in the area of anti-dumping duties with respect to section duties. So China, section 3 0 1 duties. We're seeing a lot of audits on valuation. So typically there's two general types of audits. There's either a quick response or a single issue or specific issue that customs is coming in to look at. They have a concern, they have a question, they want it answered, Are these misclassified, yes or no? Are these being properly valued? Yes or no? Is this free trade agreement supported? Yes or no, So there's that, right? But then there's the focused assessment and the focused assessment is the larger type of audit that customs does. And there's a lot of misconception out there that customs isn't doing this or aren't doing many of these anymore. And I will tell you what experience they are and it's 2019, it's June, 2019, and they are doing these. And the objective of the focus assessment is based on does the company have adequate internal control?
(10:00):
So it's not just, is classification right or wrong, or is the value or wrong or was anti-dumping and counter railing duties paid correctly? It is “does the company have adequate internal controls, written procedures in the five components of internal control to ensure compliance with loss and regulations”? And that often is where the importer struggles because a lot of importers can't like wrap their head around the internal control piece. They are so worried about we have everything correctly classified, but you have to be able to show customs that you have written procedures that cover all five components of internal control and that they're all implemented and that they're strong enough to be considered effective.
Kellie Kemock (10:47):
And so internal control would be things like making sure your shipping department isn't trying to do things contrary to regulations or your accounting department transfer pricing follows customs rules and all of that, all these other departments,
Cindy DeLeon (11:05):
I'm a practical example type of person. So, let me give you an example of where an internal control can go or go wrong, in the area of tariff classification. So oftentimes a company will have a classification database. So they'll have a list of all the part numbers that they import, and they'll have a wonderful expert just analyze, get product specifications, drawings, all kinds of things, really research, conduct the ruling analysis, everything. And they put together this database with the correct tariff classification. So then they provide that database to their customs broker and they say, Broker, when you import any of this product for us, we want you to use these tariff classifications. So a lot of companies stop there. Where they fall short is oftentimes there's turnover at a brokerage firm or someone dropped the ball and that classification database wasn't used.
(12:01):
And let's say the supplier put another tariff classification on their invoice that was vetted, that was incorrect, contrary to what the database had, and the broker used that. So then you have an internal control, which the internal control, my example here is the database, but it's not truly implemented or effective because the broker's not using it and no one's doing audits on the back end to make sure the broker's using it. So you have to have controls that are effective that maybe the classifications that someone put in the database was done by someone that the employer thought was an expert, but lo and behold, they really weren't. And the data and the classifications are wrong. So their internal control is really about making sure that you have a process and that process is indeed followed and that process is strong enough to ensure compliance. Does that make sense?
Kellie Kemock (12:55):
Yeah, yeah. I think I've been struggling a little bit defining what trade compliance is, and I think you kind of described it really well in that you need to have procedures in place to follow the directives given by customs and other regulatory bodies. But then also the second part is you have to make sure that those procedures are followed and that's where those internal control tests come in and “self auditing” comes in and all of that comes in as well. So is that how you would describe international trade or trade compliance as a whole is have procedures and make sure that they're followed?
Cindy DeLeon (13:38):
Well, I think in a nutshell, I think making sure that the internal controls have all five components, and the five components are a control environment, which means do you have the support of upper management? Do you have the right staffing? Is that staff properly trained? Those are things that really affect control environment where executive management sets the tone and mandates that all those within the organization and not just the people in the trade compliance department, but every department and the company comply with custom and regulations. So there's that first component control activities are, like you mentioned, the written procedures that we'll do this weekly or this monthly or this quarterly, the written policies and procedures. Then risk assessment. Risk assessment is one of the components of internal patrol that often missed every trade compliance professional out there is stretched, stretched, thin you can't chase everything all the time.
(14:37):
No one is a hundred percent compliant. And so if you don't have a risk assessment to where you can focus your very limited resources on the areas of greatest risk, you're really doing yourself a disservice. Fourth is information and communication, and that's not only within the company, but with their service providers, with their brokers, with their suppliers, with their other service providers, making sure that the information communication is flowing freely and well. And then the last is monitoring. Without monitoring and audits and the checks and balances you really don't know whether your system of internal control is working effectively. And so to me, trade compliance is making sure that internal control process covers all five components of control and that all five components are adhered to, if that makes sense.
Kellie Kemock (15:30):
Great. What is your opinion on automation of any of these processes or where can automation fit in any of these five aspects?
Cindy DeLeon (15:43):
I think automation is fabulous, and as people come to me all the time, do you recommend any service provider? And I really don't because no matter how good the service provider, it really depends on the importer or exporter and what systems they have and what data they have. I think there are many things that can be auto automated. There are a lot of great service providers out there, but I've seen instances where a company will come in saying, we're doing a hundred percent audit and we're doing it in automated fashion, we're using the service provider. And it gives us exception reports. And what I have found is that it leaves a lot to be desired because maybe it doesn't give you a full picture. I'll give you an example. I had a one client come to me and say, We're doing a hundred percent audit of valuation.
(16:33):
I said, Great. Explain to me the process. And they said, the system and the tool matches the purchase order price to the invoice price, to the receiving information. And I said, Great. Well, is anyone matching it to payment the actual wire that goes to the supplier? Well, that piece was missed. Was anybody asking the question about transfer pricing, true up adjustments or any type of transfer pricing adjustments that piece was missed? Is anyone asking about assists? Are any assists being provided? Are there any tooling payments being made? And there were so many pieces of people kind of almost falsely had this reliance on a system, a tool that was taking care of value for them, when so many other aspects of value were being missed. And so I think a system and tools can be used, but we have to be careful to make sure that we only rely on it to the degree we can and we should.
Kellie Kemock (17:36):
So for people who might be interested in trade compliance or complete beginners, what recommendations might you have for getting up to speed learning and even choosing which piece of trade compliance to go after? I mean, there's so many aspects of a potential career in trade compliance. You can go into the government as you did, or industry and consulting, all of that.
Cindy DeLeon (18:07):
I love that question because in my 12 year career with customs, I won one commissioner's award and it was on recruiting and mentoring. And so I truly enjoy it. And I used to actually attend trade fairs and I got the Chicago office to develop a booth for customs for audit positions. So it's a topic near and dear to my heart. I tell people, Don't worry about deciding your whole career. Now, there are many different paths that one can go down if it's auditing, if it's in the brokerage industry, if it's with an importer as a trade compliance professional, I say learn, learn, learn, learn. And from there you'll decide where you want to end up. A lot of different places to learn is one, studying and getting a brokerage license is always a great thing to do. The National Customs Broker Association, Brokers and Freight Forwards Association, they have a lot of training.
(19:06):
The National Education Institute, which I'm very involved in and has a lot of training out there Delon Trade does an annual conference, if I can plug that in February, we do it here in Houston. It's called an Advanced Topics in Customs Compliance Conference, but we also have a basic track. So that's a great place to learn. And there are a lot of free webinars out there. Be mindful of who your speaker is and make sure, Cause I've gone, I've attended webinars and I've attended training where misinformation is being provided. So it's very important to know who your speaker is, to make sure that the information that you're getting is accurate. And no matter how many years you have in the industry, you should always be learning. I've been doing this for 24 years and I'm constantly attending training, constantly attending conferences, constantly educating myself. And so it's always important to be learning no matter how experienced you are.
Kellie Kemock (20:12):
Absolutely. That's why I like my career so much is that I'm constantly learning. There's always something new that I didn't know, and it never gets boring for sure. <laugh>
Cindy DeLeon (20:24):
Definitely.
Kellie Kemock (20:25):
Great. And you mentioned mentoring. Now it's a tough topic to talk about just because it, It's something I feel like it can't be forced. You just have to have network and have those relationships in order to be a mentor, to have a mentor. What suggestions would you have in that regard?
Cindy DeLeon (20:48):
<laugh> I have a funny one, which I truly believe is one of the keys to what success I've had over the last 24 years. And that is food. Almost every hurdle can be solved with food. I tell people all the time, I used to mentor people in at customs and I would start bridging those connections over a meal. And so if you're in a position where you really need a mentor, and even if you can't afford a fancy meal, invite someone to a cup of coffee, invite someone to a pastry. It doesn't have to be expensive, but the gesture means so much. And I can't see how many people I've learned I've met over the years over a cup of coffee or a glass of wine or what have you. But there's something about having that face to face connection and that moment that helps you start beginning forming relationships.
(21:47):
And so I think that's really important. And then being prepared. If you're going to ask someone who's been in the business for a long time to mentor you and to provide advice, pay attention when you're there with them, have your questions when you come to a table and that other person can see that you are prepared and that you are truly interested. They want to give back. Most people who have been in the business, as long as I have want to give back, but when you sit them down and you're on your phone and you're not really paying attention or you seem bored or you're yawning or you're not prepared with questions, then it really is a waste of mentor's time. And so I think it's so important to be ready and to be respectful and not reschedule and be respectful of that mentor's time.
Kellie Kemock (22:38):
So you mentioned some of these organizations the Freight Forward Association and the
Cindy DeLeon (22:46):
National Customs Brokers and Freight Forwarders Association. Yes.
Kellie Kemock (22:50):
<affirmative> and I am trying to start up a St. Louis chapter of the Organization of Women in International Trade (OWIT), but I think you have a local one as well. Is that something you would recommend?
Cindy DeLeon (23:05):
The OWIT chapter in Houston is not active, at least not that I'm aware of at this point in time. I used to attend events here in Houston and it's not active. I know of other OWIT organizations around the country that are active, and I think they're fantastic. I've actually gone to a couple of events and heard about other events and they're fantastic. So I think that's a great thing to do and I really commend you for it. If I can help you in any way, let me know and I'd be happy to help. I speak at a lot of different conferences and places and try to give back as much as I possibly can. So I think that's a great place to learn and meet other professionals and identify mentors for sure.
Kellie Kemock (23:47):
And the other thing you mentioned was certifications, getting a brokerage license for importing. Are there any other certifications that you would recommend?
Cindy DeLeon (23:58):
Yeah, going back to the National Customs Brokers and Freight Forward Association, they have certification programs, They have a certified custom specialist, they have a certified export specialist. And I'm going to give you a name. Federico Zuniga. Federico. We call him Kiko but you can email me offline and I can give you a contact if you'd like to. But he'd be a great person for you to interview to get more information about training and about education and of the different programs that are very well priced through his organization. Cause he is the director of the National Education Institute of the National Customs Brokers and Freight Forward Association.
Kellie Kemock (24:44):
Great. And so as someone who obviously has hired a few people in your career are those [certificates] something you look for in potential employees? Are they a benefit or is it something that's required?
Cindy DeLeon (25:02):
So the people who work in Deleon Trade, there's 10 of us now employees, all of the people are either former customs officers like myself, former customs auditors, assistant field directors, and the people who are not they absolutely have a license broker their licensed brokers. So they have their customs brokers license and have been in the business for a long, long time. And so I definitely recommend, and they're also certified custom specialists. And what that means is you get your brokers license, but right now there is no continuing professional education requirement, which is crazy in my mind. There should be one. But the National Brokers Association offers this CCS program certified custom specialist, and that's kind of like a continuing professional education. There are continuing professional requirements to maintain that certification. And so that's something that our licensed custom broker maintains every year.
Kellie Kemock (26:02):
I have a law degree and I have to do continuing education but there's not education under customs or import export or anything to that matter. It's hard to find. A lot of it's around FCPA and legal aspects. But I'm really looking for some continuing education opportunities
Cindy DeLeon (26:24):
Well, you should come to our conference because we actually do all the paperwork for CLE credit and we even try to get the ethics credit, the two hours of ethics credit in there as much as we possibly can for you all. So we do a lot of that paperwork to be able to get the CLE in the different states for our February conference.
Kellie Kemock (26:47):
So advanced topics in customs compliance in Houston, in February, next year, 2020
Cindy DeLeon (26:55):
In Houston. Yep.
Kellie Kemock (26:57):
Great. And CLE credit in some states, definitely looking into that. Thank you
Cindy DeLeon (27:03):
Absolutely.
Kellie Kemock (27:05):
So you touched a little bit on my next question was to whether people needed to choose a specialty or am I going into import? Am I going into export? How do I, I have to know both or do I just learn on the job? You kind of touched on it go where your career takes you and you learn what you can, where you can. Is that kind of your take on that?
Cindy DeLeon (27:27):
Well, I think it really depends on where you start. Most people do one or the other, not both. There are people who do both and wow, they're incredible people because to be both to me is being both a heart surgeon and a brain surgeon all at the same time, which it's rare, you know what I mean? <affirmative>, I think that you need to decide which you like. It takes a certain personality to be a compliance professional because if there's so much detail, and if you're not a detailed and meticulous detail oriented person, you're probably not the type of person who would enjoy a career in compliance.
(28:08):
But I think that a lot of the people that I know start out in a brokerage firm just helping with the paperwork for import transactions and writing entries and move up from there into working for an importer, an exporter, just helping process transactions. A lot of people start in logistics and move into compliance and learn, but I think the learning should be a little bit more structured I think is as people move into greater areas of responsibility, they should look for formal training in different areas to help them not struggle so much. So if they're now responsibility over tariff classification, then they should learn about tariff classification in the structured fashion. If they're asked difficult questions on related party valuation, then they should take courses, unrelated party evaluation, read the regulations, read customs informed compliance publications and like, and not just learn. One of the things I caution people is, so this is what we've always done. That's one of the things, it just drives me nuts. Well, this is the way we've always done things
Kellie Kemock (29:24):
<affirmative>.
Cindy DeLeon (29:24):
And that's something that I always recommend that people push back on that. have people explaining why, What is the legal basis for doing things this way? And if you are working for someone that doesn't give you a reason why, then that's probably your first indicator that the longevity of that position is probably not the best thing for you.
Kellie Kemock (29:50):
So you mentioned that you have an accounting background and you say that people in logistics or those interested in supply chain, could also look into a career of trade compliance as well. And I have a legal background, so it seems like there's a lot of different backgrounds that can jump into this career field.
Cindy DeLeon (30:10):
Absolutely. And the legal background is fabulous. I know a lot of people who are in director type positions or chief compliance officers that have the legal background and are fully immersed in all things trade. And so I think I see a lot of people with supply chain degrees with accounting degrees or finance degrees or law degrees in trade compliance. And then there are people in trade compliance that don't have a college four year degree that've really just learned the school of hard knocks and coming up and having experience in the industry. And that's fine too. So I think it's really just a matter of continuing education and making sure that your skillset and your background is well suited for your responsibilities.
Kellie Kemock (31:09):
Great. That was all the questions that I had. Was there anything else? any suggestions or advice you might have for our listeners, OWIT members who currently practice in trade and then possibly people interested in international trade as well?
Cindy DeLeon (31:26):
I guess the only advice or thoughts I have is I think of being a woman in business, being a woman either in trade, I'm also small business owner and I'm also in Houston, which is a big oil and gas city. It's very well known for being a good old boy type of club. And I think how have I navigated those complexities or those challenges? And I think that one of the pieces of advice I try to give my group is to be true to yourself and to be mindful of your tone and of building a relationship and building a rapport that getting upset or getting aggressive never solves anything. And that it's about establishing respect and making sure people understand how hardworking you are and how prepared you are and how informed you are. And that's how you win people over not through any type of adversity, <affirmative>. And so I think as women believe in yourself and all things are possible, absolutely all things are possible.
Kellie Kemock (32:48):
Well, we can end on that. A really great note there. I appreciate your time and your advice and your openness to help up and coming people in the trade field.
Cindy DeLeon (33:01):
My pleasure. Thank you so much for the invitation.
Kellie Kemock (33:05):
Thanks for listening to today's episode. You can always find us on Twitter at trade podcast, also on LinkedIn, Women in Trade podcast.