How to ensure international trade and export compliance – 2020
As a logistics or shipping company, the rules of international trade compliance are an important part of doing business in other countries.
But making sense out of the many different demands and rules can be troublesome. Especially if you make business across many different borders. In this text we will help you to a greater understanding of what trade and export compliance are – and what consequences they have for your company in 2020. We also work you through how we at Clearview Trade can help you ensure trade compliance at your company.
What is trade compliance?
Trade compliance is a part of every shipping agreement – both import and export – between two given countries. Though a lot of trading happens internationally, there are no ultimate set of international shipping compliance rules.
Instead, trade compliance varies for each individual agreement between two countries. The two parties agree on the compliance rules internally. This can make figuring out the conditions and agreements when exporting to another country rather time-consuming.
Difference between trade compliance and export compliance
In short, trade compliances are the overall term describing the rules governing import and export between two countries. When your company is exporting goods, you need to look to the trade compliances for the specific rule set.
Are you required to comply?
Yes. Even though the many different rule sets may seem extraordinarily complex, every company – especially those concerned with logistics and shipping – are obligated to comply with them.
The rules are legally binding. This means that your company can be punished if you ignore certain rules. Normally the penalty will be a fine, but the penalty will vary according to the type and severity of the rule breaking.
Rules for global trade compliance
As we already stated, trade compliance varies between countries. This, however, doesn’t mean that there is no global structure to the different rules and elements.
WTO (World Trade Organisation) works to keep track of the different global and local systems of trade. This organization is governed by the membering countries. Therefore it both legislates, discusses and keeps trade laws in claim.
Therefore it is the biggest and most reliable source when it comes to rules about global trade and global export. You can read much more about the organization on their web page.
Need to know elements
When investigating or trying to comply with the different rules of trade, there are certain key elements that you can focus on.
- Are you exporting or importing?
- What country is your company situated in – and what country do you corporate with?
- What kinds of goods are you transporting?
Based on these different basics, you will be able to research your trade compliance rules more targeted.
Why is trade compliance important?
The rules governing trade and shipping locally and globally are extremely important. They are our only way to regulate the market and keep competition fair. International trade compliance for example helps expose and punish bribery.
But trade compliance is also important for your company specifically. Mostly in the sense that it can be very bad for you if you don’t comply. A fine for ignoring the rules can result in different bad situations for your business.
As we stated earlier, failing to comply with trade rules usually results in a fine. And for companies that trade and ship a lot of goods, this can be very expensive. Often the fine can end up bigger than the total gain of the trade agreement.
For a lot of companies such an expense can destroy their whole economy. So even though the rule breach was not necessarily made with bad intentions, it is extremely important to be aware that you are not doing anything illegal.
Reputation is important in every aspect of business. Failing to pay attention to rules of export and shipping have a big potential of hurting your company’s reputation.
Again, your company may not have meant to ignore the existing trade compliances. But if you get a sentence based on a mistake – intentional or not – it does not look well in the eyes of your customers or business partners.
How export compliance affects your business
Every company that exports goods as a part of their business strategy is affected by the compliance rules. Before you can make private contracts with your partners, you need to look into the structures and limitations of the governing compliances for your country and the country of the other company.
This means that trade and export compliance will – and have to – take up some of your time and man-power. Some companies even have a special unit that only works with this subject.
How Clearview Trade ensures trade compliance
At Clearview Trade we help you save time and money while making sure that you comply with the latest national and international standards for trade.
We do this through our Export Portal. Here we offer you standard documents of trade and export, made to fit the trade rules of your company and your partners’. We validate data and minimize manual date entry by automization and using one set of original and validated data. The only thing you and your company have to do is sign up in order to access the Export Portal and order the necessary services you will need. .
Because rules of trade compliance changes so much and so often, The Export Portal helps you ensure that you are always up to date – in fact you don’t have to be, because we are.