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Trade Secrets

Jim Walsh has seen the best and the worst of doing business at the border

by Virginia Lindauer Simmon

James Walsh, vice president for regulatory affairs at Affiliated Customs Brokers USA, works from the company’s U.S. headquarters in Champlain, N.Y. Part of his job is overseeing regulatory issues at the company’s two Vermont offices — at Highgate Springs and Derby Line.

Jim Walsh is a song-and-dance man — in the best possible context of that phrase. Walsh sings with the barbershoppers in the Green Mountain Chorus; dances and sings a couple of solos in Cardiac Capers, the Northwestern Medical Center’s semi-annual variety show; and is known as the “Vice President of Youth and Harmony” for his work with youth groups and schools encouraging young people to sing.

When he’s not singing and dancing (or driving one of those funny Shriner cars in parades), he’s doing what might be considered another kind of fancy stepping as vice president of regulatory affairs for Affiliated Customs Brokers USA.

Affiliated is a family-owned Canadian company based in Montreal, with about 530 offices in Canada and 11 along the Canadian border in the United States. The U.S. headquarters is in Champlain, N.Y., about a 30-mile drive — “a slow and painful, 45-minute ride from St. Albans, over Route 78,” says Walsh with a grimace.

A large part of Walsh’s day is spent interpreting and advising on legal issues that companies might have in bringing products into the United States. “Customs deals with products rather than people,” he says, “and there’s a rule for just about every product, and restrictions on certain products. People call for advice on bringing something in — ‘What do I have to do? This thing is stuck.’” In a nutshell, he says, it’s his job to make sure clients’ goods aren’t seized. “We’re like the tax accountant or tax lawyer who interprets IRS law,” he explains. “Well, we interpret the customs laws.”

Affiliated has two offices in Vermont — one at the Highgate Springs Customs Complex and one in Derby Line. “Sometimes I hang out in Vermont, because I oversee Vermont as far as regulatory issues,” he says.

St. Albans is Walsh’s home territory, and has been for five generations of Walshes. His father worked for Union Carbide there as a plant accountant. “It’s the old adage,” he says, laughing. “Here’s the son, who might have gone through — I think I’m on my eighth customs brokerage job — and my dad worked for 35 years for the same company.”

Walsh does seem to have been fated to work in the industry. “It’s sort of in my blood,” he says, referring to a great uncle, Jack Hurley, “who founded one of the area brokerage firms.” 

After graduating from Bellows Free Academy in 1976, Walsh went to Castleton State, but being a bit at loose ends, he left before graduating to take a job as a night watchman at A.N. Deringer. He studied for his federal license while working nights.

He eventually left Deringer and went to work for another broker, F.H. Fenderson, in sales, then launched his own, ill-fated firm, U.S. Brokers, in Champlain. “That was a bunch of New York City big talkers who promised me the world but delivered nothing,” he says, “and I believed them.”

He was hired by Emery Worldwide to run its hub in Chicopee, Mass. When Emery closed that operation, Walsh was given a choice of places to work, and he opted to run the company’s facility in Miami. 

“Then Hurricane Andrew hit in ’92,” he says, and Walsh decided he had had enough of Florida. “My oldest son was growing up up here without me. He was 10, and his mother and I had been apart for many years.

“I came home without a job, but I was fortunate.” His friend Bob Perkins hired him in A.N. Deringer’s compliance department, and by 2000, Walsh was the company’s director of compliance.

Stacey ChoiniereAffiliated is a family-owned Canadian company based in Montreal with about 530 offices in Canada and 11 along the border in the United States. Stacey Choiniere, the supervisor at the Highgate Springs office, has been with the company almost 14 years.

“Tragedy hit in about 2005,” Walsh continues, “when they restructured.” His entire department was eliminated, he says, adding, “Even the treasurer went!”

That was just the spur he needed to return to college and finish his degree. He matriculated at Johnson State. “I was let go on Thursday and was in school on Monday,” he says. He graduated that spring with a degree in business management.

Walsh’s parting agreement with Deringer — what he calls his “get-out-of-jail-free card” — required that he not work in the brokerage business for a year, so he parlayed his reputation as a turnaround specialist into a job for a local transit company. 

“They were almost down the tubes,” he says, “and they hired me to come in and turn it around. I did for about a year, then latched onto this opportunity with Affiliated about a year and a half ago.”

Having worked in the industry for so long, Walsh has seen it evolve. The push, he says, since the mid-1980s, has been to automate and computerize the advance notification process to enable small and large companies to move goods more easily.

“After 9/11, though, the focus went immediately to security, which may or may not have affected trade in general. Security, security, security,” he says. “Now six years later, they’re getting things tightened, and we’re getting back to the enforcement part of it.” Consulting on enforcement is a big part of Walsh’s job.

HighateHere along the Quebec border, language creates a challenge in working with French Canadians. “We’re not thinking in the same terms, because of the language difference, and if interpretations aren’t clear, we need to make sure they are compliant, because consequences can be large. People in Michigan and Buffalo don’t deal with any of that stuff, and it can be frustrating for us, because sometimes it doesn’t sink in.”

The majority of the shipments Affiliated handles are from Canadian companies, says Walsh, so a lot of the focus is on making sure documentation is correct. “You hear people say, ‘Well, NAFTA, it’s duty-free!’”

Yes and no, says Walsh. He gives an example of a company making a NAFTA claim. “Let’s say they import a piece of copper from another country — from Europe, say — and they bring it in to Canada and they cut it. That act of cutting might have turned it into a Canadian product, but it didn’t, so not only did they not claim it as European goods, which would be dutiful, but the claim itself is deemed fraudulent.” 

Companies are responsible for knowing or obtaining information about the proper rules, and in the above case, not only will duties be due, but fraud penalties will also be imposed.

Fines and penalties, not duties, produce the bulk of customs revenues for the federal government, he says. “Although they can be very pleasant and easy to deal with, they also can be very stringent in protecting the revenue.

A fun part of his job is seeing the products that come through, Walsh says. “We clear for different concerts, for example. With so many different types of goods, we all become experts. I think people would be staggered about the amount of trade just through our little quarter.”

A tremendous number of products come in through the seaport of Montreal. “Those container trucks you see heading down to Massachusetts — it’s far easier to go up through Montreal and back down, even with the exchange, than to bring it through New York City or Boston, where rates are nearly three times as much, and it takes you three days to get through. Here, it’s instant.” 

Celeste VansletteA large part of the shipments Affiliated handles are from Canadian companies.  Celeste Vanslette, supervisor of release, works in the Highgate Springs office.

Walsh mentions Velan Valve in Williston and Burton Snowboards, both of which bring parts in through Montreal. He worries that the weakening of the U.S. dollar has meant less sourcing of products from Canada, spurring layoffs and plant closings there. “The industry in general has been a little slow lately,” he says.

The company has branched out into security consulting through a program called CTPAT (“Acronyms — it’s a laundry list!” he exclaims). CTPAT stands for customs and trade partnership against terrorism. “It’s accreditation from Customs that really means your supply chain is secure and you’re dealing with other companies that are certified.”

In the event of a border shut-down — “a terrorism event, as we call it,” he says — only CTPAT-certified material will come through.

Customs is developing a fully automated, integrated computer system called automated commercial environment (ACE) that will act as a clearinghouse for information for all parties. “Right now,” says Walsh, “Customs at another district has a hard time accessing information from all districts.” That has led to what brokers call “port shopping,” where companies, for example, “know Detroit can be nasty and avoid it like the plague, so they’ll go to friendly Highgate Springs. Highgate is probably one of the best in the country,” he continues. “They adhere to the rules, but they’re also friendly and use common sense.”

As for his own future, Walsh says, “I’m just trudging along happy as hell. I’ve got a job and can provide for my family (he remarried a few years ago — a woman he met doing the polka at Cardiac Capers — and they have two boys). “Life is good. I guess I’ll trudge along and hope everything goes well.” •

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