The importance of effective trade compliance software
Ensuring that you are always adhering to trade regulations and best practices is vital for the success of your business. But with so much national and international legislation to keep on top of, this can prove a highly challenging operation.
However, the penalties for meeting legal requirements can be high. Therefore, it pays to have effective trade compliance software to take much of the effort out of these activities and ensure you're always up to date with the latest regulation changes.
Why does trade compliance matter?
Trade compliance is essential in keeping your business running smoothly and in line with tax requirements and international standards, as well as securing your firm's reputation and keeping the movement of goods around the world on track.
If you don't pay close attention to this area, you could find yourself making incorrect claims on customs forms. In the best case scenario, this could prove costly if you end up paying the wrong amount of tax, leave you with unexpected extra bills or result in delays as your shipments are denied clearance at customs.
However, if you violate legislation related to export bans, such as shipments of controlled items or doing business with denied parties, you could face having licenses withdrawn or expose your business to heavy fines and other criminal penalties - even up to prison sentences for severe breaches of compliance rules.
Therefore, it's essential that you have the right technology tools in place to make complying with the wide range of international trade regulations as easy as possible.
What does trade compliance software include?
An effective trade compliance software platform greatly streamlines many of the activities associated with importing and exporting resp. import compliance and export compliance. With the right all-in-one solution, you can manage a wide range of vital processes, safe in the knowledge that the information you're using is accurate and every aspect of your operation is covered.
Key components of these systems include:
These tools ensure that you are using the correct customs tariff classifications for all your goods. With each country having its own rules regarding this, and many goods having a large number of components that may fit into different categories, being able to automate these processes ensures your reporting is accurate and greatly speeds up the process.
The ability to automate customs filing processes across various countries takes much of the manual, error-prone work out of the hands of your business, ensuring accuracy and completeness.
Failing to comply with export control laws can have serious consequences both for your finances and your reputation. Systems that include a clear, easy way of checking your goods against lists of restricted or prohibited items, including requirements for special licenses, sanctions, dual-use lists, embargoes and other rules, are an essential part of trade compliance software.
Rules of origin
Failing to fully understand rules of origin requirements can leave you facing unnecessary tariffs. With the right tools you can easily determine what the requirements are across multiple countries and quickly calculate whether you stand to benefit from free trade agreements.
If you're moving goods from one EU member state to another EU member state, Intrastat reporting is another essential regulation. However, with each of the 27 member nations of the bloc having its own system for making Intrastat departure declarations and Intrastat arrival declarations, this can quickly become overwhelming. Therefore, a single solution that can cover each nation under one platform makes complying with these rules much easier.