Asking The Right Question: Are You Trade Compliant?
Very often, we talk with individuals who are focused on specific needs. They have questions like: “How do I get an ITAR license?” or “What is the ECCN for my product?”
Although these questions are valid and essential, sometimes companies need to step back and look at the bigger picture.
The United States takes a strong stance on global trade, and each company must have a trade compliance program that meets the trade rules of all relevant government agencies.
This means that your company must clearly understand the rules and all aspects of trade compliance to meet international law and pass external audits. All employees must do their due diligence to ensure all transactions comply with U.S. export and import regulations.
Instead of focusing on one aspect of import/export regulations, the question they should be asking is: “Are we trade compliant?”
What Is Trade Compliance?
In today’s global marketplace, companies do business both within and outside the United States. Your supply chain depends on following various free trade agreements, international trade regulations, and tariff classification.
Large companies often have a trade compliance team or trade compliance manager. Yet, even with these specialties, many companies unintentionally receive import and export violations. These violations lead to hefty penalties and fines for failure to comply trade regulations.
International business is more complex than ever before. This is why you need a clear, up-to-date understanding of the rules about export control, customs officials, and export laws.
As a result, exporting and importing have become an essential part of day-to-day operations. Since your business relies on global trade, your company needs to ensure that your operations have substantial global trade compliance.
To remain competitive, companies must have a comprehensive understanding of the laws and regulations which govern their imports and exports. Very simply, that’s what trade compliance is all about!
Companies are responsible for trade compliance. Do you know what to expect if you receive a trade compliance audit? Save time and money today and let our trade experts help you with all of your trade compliance needs!
Trade compliance is the process and system of understanding and adhering to the laws and regulations controlling the export and import of goods, products, information, and technology between the United States and other countries.
Why Is Trade Compliance Important?
When your company relies on the profits from importing and exporting goods, services, and other items, a trade violation could send your business processes into a tailspin.
Establishing a trade compliance program is essential to keeping your company running and avoiding costly errors.
Here are some reasons why you need to get serious about your trade compliance program.
1. International Trade Compliance Protects National Security
It’s essential because countries have the right and need to protect critical products, technology, and information from falling into the wrong hands.
For example, the United States must protect certain items from other countries and individuals who wish to harm us. It’s also essential to safeguard our competitive advantages in a global marketplace.
2. Trade Compliance Protects Your Business From Costly Violations
Companies and individuals must remain compliant with the laws and regulations to avoid the negative consequences of non-compliance. Those consequences can include hefty monetary fines, civil penalties, and seized shipments.
There can also be jail time for individuals, and the U.S. government can even debar a company from exporting anything to anyone.
Effective trade compliance ensures that goods are classified correctly, and the origin and valuation of goods are accurately declared according to the laws, sanctions, and regulations.
You must also ensure that the appropriate duties and taxes are paid. However, this is only a tiny part of the bigger picture.
The next time you ask yourself how vital trade compliance is, think about what would happen if your company could not ship any product to any foreign destination!
3. Trade Compliance Protects Countries & Companies
An effective trade compliance program protects the company and country from potential danger by:
- Screening new vendors, customers, and visitors and ensuring that all requirements and certifications are met regarding exports and imports.
- Making sure that your trade compliance program is aware of new and changing regulations.
- Ensuring that suitable recordkeeping protocols are maintained for all export and import transactions.
Wouldn’t it be great to have a team of trade compliance experts working on your team? The risks of violating regulations can cripple your business, erode your earnings, and even lead to jail time.
You don’t have to put yourself and your business at risk- talk to our trade experts to understand your needs.
How To Organize An Export Compliance Program
Whether you are setting up export compliance for the first time or looking to improve your existing plan, you’ll need to take an all-hands-on-deck approach to ensure you establish more efficient business processes.
Here are some things you can do to start streamlining your company’s import and export operations.
|Steps For Improving Trade Operations||How It Helps|
|1. Get Management To Support Your Trade Compliance Program||● Your entire team needs to be on board, from top to bottom, to ensure proper compliance.|
|2. Conduct An Audit On Existing Trade Processes||● To know where you’re going, you need to know where your trade processes stand. |
● Use detailed recordkeeping to track current practices.
|3. Identify Reliable Trade Partners||● Select freight forwarders, customs brokers, and others who will support your compliance. |
● Maintain strong, positive relationships with reliable logistics partners.
|4. Establish And Stick To A Formal Compliance Training Program||● Create and offer consistent training to all team members. |
● Ensure everyone is aware of changes to export compliance.
|5. Stay Up-To-Date On Policy And Regulatory Changes||● Review and update your trade compliance plan often to reflect changes in international trade law and procedures. |
● Implement a process to review your plan regularly.
|6. Always Screen Vendors And Customers||● You’re responsible for ensuring all parties involved in your transaction are compliant. |
● Screen new vendors and customers for previous infractions.
As you can see, trade compliance is a vital component of any global business.
It’s everyone’s responsibility and in all our interests to comply with these requirements.
So, the next time you hear a specific question or need, take some time to step back and “see the forest through the trees.”
Even better, enlist the professionals to ensure you don’t miss a beat regarding trade compliance.
Global Trade Compliance Helps Your Business Succeed!
Having an expert help you work through trade compliance matters will help your company identify missing or potential issues that will cause massive headaches.
Ready for help with improving your trade compliance? Export Solutions has worked with hundreds of organizations to do just that! We can offer in-person training sessions or create a webinar series to help your team understand the importance of export compliance.
Let’s schedule a no-charge consultation to begin the discussion today.
Trade Compliance FAQ
Tom Reynolds is the President of Export Solutions, a consultancy firm which specializes in helping companies with import/export compliance.