Trade compliance involves laws and regulations that govern the export and import process, which can vary between countries and goods. Failure to comply can result in negative consequences, but there are resources available to help businesses become compliant.
Products are commonly shipped from one country to another. This type of trade is generally essential to a nation’s economy and well-being. How this happens, however, is usually not left to the whims of shippers and consignees. Instead, there are laws and regulations that govern the export and import process. These guidelines are known as trade compliance.
International trade can be very complicated. One reason is that there is no single set of rules for global trade. In many cases, there is no single set of rules within a nation.
The same item may be subject to different trade regulations depending on which other country is involved in the deal. Trade agreements are contracts entered into by two or more countries. These often determine which actions constitute compliance and non-compliance.
To be compliant, importers are generally required to provide information on the goods they receive. This information may vary from one country to another and according to the goods handled. At a minimum, an importer or exporter is usually required to declare what a shipment consists of and its value. Each of these parties may also be required to indicate the purpose of the transferred assets.
Trade compliance doesn’t just dictate the steps you take when engaging in international trade. Laws and regulations also dictate what the parties are not allowed to do. For example, some countries prohibit certain items from being sent to or received from certain other countries.
Trade compliance is often taken very seriously. Failure to comply with these laws and regulations can result in a variety of negative consequences. In some cases, materials may be confiscated and destroyed or returned to sender. In some cases, the recipient may be sentenced to fines or imprisoned. There is also the possibility that the trade could be blocked by certain entities or countries.
Because trading can be such a serious matter, there are often many sources that individuals or businesses can turn to for assistance. Some may be governmental. In the United States, for example, the Department of Commerce has a Trade Compliance Center that can help with foreign trade matters. There are also private companies that specialize in helping businesses become compliant, whether importing or exporting. Using available resources can be a wise decision because ignorance of commercial requirements is often not accepted as a defense for violations.
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