D-I-Y: Establishing a Fashion Law & Compliance Program

A basic fashion compliance program is one where there are internal controls and procedures that implement compliance measures for those laws and regulations an entity involved in the fashion industry must abide by in its day-to-day operations. This information needs to be in written form and regularly updated so that management and employees can understand the current protocols that keep the company in compliance with the law.

In addition to lawful operations, a fashion compliance program is also important because in the event a government agency decides to audit your business to ensure compliance with its regulations, the first thing it wants to know about is your compliance program in order to assess your awareness of their rules. In addition, the agency will also evaluate if you have been following your own procedures, identifying errors made and correcting them, or if instead your practices have been sloppy leading to what they view as a violation of their rules.

The best way to maintain information about your fashion compliance program is by creating a written manual. To get started you will want to draft a manual that sets forth your basic standard operations and, if you are also an importer or exporter, include the details around your import or export procedures.

Information contained in your written Fashion Compliance manual should

1. Include a basic description about the business and its product lines,

2. Identify the vendor’s who you buy products from and who service the business,

3. Describe your standard protocols for ordering, invoicing, and shipping, and

4. Have separate sections relating to each federal agency with details about how its laws apply to your products, and how you have implemented procedures to exercise diligence and be compliant with them.

Be sure to put together a compliance program that fits your company. To be an effective compliance program internal controls and procedures need to be actively implemented and revised, with key personnel updated on changes in practices. Having an effective program is further strengthened when there is a culture of accountability in which individuals understand the concept of compliance, and their role and accompanying responsibilities within the compliance chain.

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