Today's business world is increasingly more global. The laws and
regulations involved with doing business on an international level are more
complex than ever. Good trade compliance involves dealing with various
government agencies and bureaus, including the U.S. Department of State, the
U.S. Department of the Treasury, U.S. Customs and border protection, and even
the U.S. Census Bureau. Rules, regulations, and procedures are often changed or
altered with little notice.
Failure to comply with trade laws can result in stiff fines, civil and criminal
penalties, and even jail time. Failure to classify export products or properly
train employees in trade compliance procedures doesn't only cause legal
headaches, but it can damage a company's reputation and become a PR nightmare.
Having someone with experience in international trade laws and regulations on
board can be a valuable asset for any company doing business on any level
outside the United States.
Depending on what products a company exports, additional compliance may be
required. Even incorrect Export Control Classification Numbers (ECCN) or
Harmonized Tariff Schedule (HTS) numbers, whether intentional or not, can cause
problems such as fines and costly product delivery delays. Even if a company is
usually very diligent when it comes to compliance with international trade laws
and regulations, changes to existing regulations or new regulations can crop up
with little advance notice. Therefore, it's just as important to make sure all
employees are familiar with trade regulations.
Ignorance of the law is rarely a valid defense when it comes to imposing fines
for non-compliance. The International Trade Compliance Institute, however,
reports that many exporters and importers fail to comply with international
trade regulations out of ignorance. This isn't restricted to only U.S.
companies, but U.S companies are held accountable by U.S. agencies for failure
to comply with trade regulations. Conversely, additional penalties may be
imposed by similar trade regulators in other countries. Failure to comply with
trade regulations doesn't just impact a business; it can also negatively affect
job growth and even impact international relations.
Basic compliance usually includes having documented import and export
compliance on file and verifying that all international parties such as banks
and transportation providers aren't on any U.S. government checklists. Such
lists are meant as a guide, but dealing with unverified international parties
can contribute to legal issues later. It is also recommended that all employees
receive training or refresher training to remain current on trade regulations
at least every six months.
International trade isn't only vital to the U.S. economy, but it is often
directly linked to the success of an individual business. Both small businesses
and large corporations must adhere to the same regulations. According to the
World Trade Institute, more than half of all U.S. businesses do some level of
business overseas. Yet, some U.S. businesses don't have a compliance department
or anybody specifically in charge of compliance. It may be cost-effective to
streamline operations these days, but fines for non-compliance aren't really
worth such a risk.
Companies that cannot realistically afford to have a compliance department
should consider hiring a firm specializing in international law to ensure full
compliance in all overseas business dealings. This is a cost-effective solution
that doesn't leave a business vulnerable to fines for not adhering to
international trade regulations. Clearly, there are markets beyond the U.S.
border that cannot be ignored. Even smaller businesses can benefit from doing
some business on an international level. Selecting a firm experienced with
international trade law offers businesses one very important asset: peace of