Trade Compliance

Introductory Guide to Trade Compliance

ICS Global Services offers advisory services to the international trade and global supply chain communities. Adhering to the numerous international regulations governing trade, as well as the import and export of goods, services, finance, and technology, is known as trade compliance. Tax authorities are enforcing regulations more strictly, and companies must now comply with additional trade compliance directives in the countries where they conduct business. We provide a range of tailored solutions to increase the effectiveness of your trade compliance process and guarantee best-practice compliance with international regulations.

What is trade compliance?

Trade compliance refers to a company’s policies and practices that guarantee conformity with national and international laws, rules, and regulations pertaining to trade. Trade compliance encompasses a wide range of international trade-related topics, all of which call for specialised knowledge and comprehension, such as import and export controls, import and export regulations, and customs rules.

It's critical to recognise that trade regulations and other specifications can vary from country to country and between different categories of goods. Companies must abide by the regulations that each country has for economic, ethical, quality, supplier, and consumer protection.

Many variables affect the import and export process, such as the country of origin and the country to which the items are being delivered, the importer and exporter's identities, and the customs laws and regulations of the importing and exporting countries. The import and export procedure is incredibly complex, even in situations where the countries involved are parties to a free trade agreement. To make sure that all national and international trade laws are followed, an import and export compliance system needs to be established.

Trade compliance encompasses the terms and conditions of doing international business between two or more countries, including contracts, payments, classification of goods, documentation, trade risk assessment, shipping, duty and tax payments, and business practice reviews.

Why is trade compliance important?

It is important that companies and individuals remain compliant with the laws and regulations of the countries they are trading with in order to avoid the consequences of non-compliance. These consequences can include monetary fines, penalties, and the seizure of goods arriving at the port, while the worst-case scenario can result in prison time for individuals.

In the end, non-compliance will undoubtedly have an impact on the company's profitability and capacity to conduct business and trade internationally.

The most successful companies understand that a well-thought-out trade compliance strategy gives them a considerable competitive supply chain edge. Trade compliance means ensuring that commodities cross borders quickly, rather than getting stopped and questioned by customs.

Having an efficient trade compliance plan is the only method for any company, regardless of size, to manage the risk associated with trade compliance.

HM Revenue and Customs

HM Revenue and Customs state that through a compliance check, they can verify that all customs and international trade-related information is accurate, including the amount of tax being paid. They will assist businesses in making amends if they have paid too little or too much,, and they will help businesses get money back if they have paid too much.

These compliance checks may include visiting the business premises to:

Inspect goods and documents relating to customs and international trade.
Ask for information about goods or services in the international supply chain that were provided or will be provided.
Verify that the company is adhering to any customs-related authorization, registration, licence, or approval that it possesses or has applied for. Occasionally, these visits are conducted on behalf of another government agency when the licence concerns the import or export of commodities.

UK Trade Compliance Penalties

HM Revenue and Customs state that a business may have to pay a penalty if they are found to have broken UK customs law on the import, export, and holding or processing of goods under customs supervision. This includes, but is not limited to:

infringements of customs regulations
failure to comply with any customs-related approval, authorisation, registration or licence
misdeclarations
failure to comply with a customs procedure
failure to produce information
failure to keep records
inaccurate returns or documents
unauthorised removal of goods from customs supervision

Compliance Audits and Risk Reports

A risk report goes in-depth into the compliance processes and procedures involved in your handling of imports, exports, movement, and storage. This kind of check is designed to identify areas of risk that may result in government intervention. A risk report forms a crucial part of your overall compliance outlook. Companies are required to be proactive when it concerns compliance, and as such, a compliance audit questionnaire that looks at your international supply chain is usually the best way to determine any issues that might generate unwanted scrutiny. I am able to help you create and complete audits and risk reports.

Trade Compliance Program

A trade compliance programme defines your company’s policies and procedures regarding import and export compliance. As an import and export specialist, I am able to help create a compliance programme for your business to ensure you are following legislation. The programme can provide a systematic report for employees of your business to follow, therefore ensuring they remain compliant. When you work with me, you’ll receive a programme tailored to meet your precise, unique business needs.

A compliance programme should also consider anti-corruption actions. Many countries have recently created complex anti-corruption laws, which cover acts and practices closely linked to foreign trade, such as bribing public agents. These anti-corruption laws frequently require companies to implement strong compliance programmes.

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Customs Compliance Recognition Programmes

Participating in customs compliance programmes and obtaining certification can result in a measurable increase in the speed of freight, fast lane customs clearance, and a reduction of import and export costs. I can assist you with your application for these customs trade compliance programmes and ensure that your record-keeping, activities, and procedures are acceptable to the customs authorities. Many countries around the world now have mutual recognition arrangements concerning each other’s supply chain security programmes.

USA

Customs-Trade Partnership Against Terrorism (C-TPAT) is a voluntary government-business initiative to build cooperative relationships that strengthen and improve the overall international supply chain and U.S. border security. U.S. Customs considers C-TPAT members to be of low risk and therefore less likely to be targeted for customs examinations at a U.S. port of entry.

The Importer Self-Assessment (ISA) programme was introduced in 2002 as an optional means of achieving trade compliance. The programme's underlying assumption was that importers would need less oversight and enforcement assessments if they had robust internal controls in place to guarantee high compliance.

UK and European Union

The Authorised Economic Operator (AEO) for imports and exports is an internationally recognised trade compliance programme that shows your international supply chain to be secure and that your customs procedures are efficient enough to meet EU regulations. The AEO model is based on the Customs and Business Partnership introduced by the World Customs Organisation (WCO). Traders voluntarily work in close cooperation with customs authorities to meet the common objective of supply chain security.

AEO-certified companies are entitled to enjoy benefits throughout the EU, which include a reduction in the number of customs import and export examinations.

Other Countries

Most developed countries now have a voluntary government-business initiative to build cooperative relationships that strengthen and improve overall international supply chain security. For example, Australia has a trade compliance programme called Trusted Trader, Canada has Partners in Protection (PIP), and countries like Taiwan have their own version of AEO.

The internal control procedures needed to ensure that export control laws are being followed are outlined in the Internal Trade Compliance Programme. Acting as an internal handbook, it covers topics like the internal policies and processes established to address any export control-related risk.

How I Can Help

Trade compliance is also a process of understanding and adhering to the laws and regulations controlling the export and import of goods, products, information, and technology between two or more countries. In addition, trade compliance covers many different trade agreements between countries, which can reduce import or export costs. I can implement proactive customs planning strategies that will potentially reduce duty payments and possibly enable duty drawbacks or refunds.

When you work with me, I’m able to assist your business in a number of ways. Firstly, I can audit your international processes and procedures to ensure they are fully compliant while identifying any business risks to you. Secondly, I can document a full end-to-end compliance programme for your business. Once you have compliance audits and compliance programmes in place, I can assist your company in obtaining customs recognition, thereby avoiding the normal customs delays within your international supply chain.