International trade is often described as a complex web of regulations, taxes, and tariffs imposed by different countries. Despite the complexity, global customs legislation remains a vitally important part of conducting cross-border commercial activities. Negotiating the complexities of the international trade field is necessary to ensure that both countries comply with their existing trade rules while also ensuring a fair outcome that advantages both parties involved.
It’s no surprise then that businesses today often find themselves facing the challenges of navigating this intricate web of cross-border customs laws. As an importer or exporter, firms must be aware of the impact of taxes, tariffs, and other regulatory requirements that can have a significant cost to their operations or overall strategy.
Reform to Meet Current Trade Challenges
To meet current trade challenges, transformational reform is needed in order to protect American workers and businesses, ensure fair competition, increase transparency and accountability in the supply chain, and enable the swift and secure movement of legitimate goods across the U.S. border. The 21st Century Customs Framework is a strategic step towards improving this situation. The Framework outlines a set of principles for a modernized customs system that focuses on data-driven decision making, adaptability to changing market dynamics, and modern technology to improve risk-based operations.
While reform is underway, businesses must also be mindful of new and constantly changing international trade regulations. The raft of new legislation in response to the global COVID-19 pandemic has made cross-border trade difficult and confusing to navigate. In order to remain compliant with international laws, companies must be able to understand the implications of emerging policies, as well as the long-term implications of these laws on their operations and finances.
Develop Policies and Procedures for Customs
For companies engaged in global trade, the task of navigating the laws of multiple jurisdictions to maintain compliance, qualify for benefits, and keep costs low may be overwhelming. It’s important to develop comprehensive policies and procedures to manage customs operations, including the implementation of adequate controls and processes to ensure regulatory compliance.
The common globally accepted mission of Customs is to develop and implement an integrated set of policies and procedures that ensure increased safety and security, as well as effective trade facilitation and revenue collection. Responsible for examining and regulating the import, export, and transport of goods across international borders, Customs plays an important role in protecting the economy, security, and integrity of countries.
Understanding the Complexities of Customs
Obtaining full insight into the global customs profile of a multinational is often difficult, if not impossible. The complexities of customs laws in different countries and regions make it difficult for companies to understand their obligations and liabilities. The risk of not being compliant with international customs laws can be significant, with stiff penalties, fines, or even criminal charges being applied.
Staying on the right side of U.S. customs law is notoriously difficult, thanks to myriad ever-evolving regulations, and penalties for non-compliance can be steep. In 2016 alone, U.S. Customs and Border Protection collected $57 million in fines and penalties.
Navigating International Customs with Ease
Fortunately, there are companies that offer services focused on global customs legislation compliance and logistics that can help businesses easily and compliantly navigate the different regulations and processes involved in international trade. By partnering with global customs and trade specialists, businesses can be sure that their international trade is compliant and legal. This partnership can also help businesses access potential savings in costs and maximize their benefits from international trade.
For example, the U.S. Innovation and Competition Act (USICA) is pending legislation in Congress today that would address current duty exclusions. As it stands, the USICA would reinstate tariff exclusions on a go-forward basis and retroactively reinstate a considerable number of exclusions back to January of last year. Companies that partner with global customs and trade specialists can take advantage of this legislation and understand the implications for their businesses.
At the same time, businesses must remain conscious of the potential risks and liabilities associated with operating in the global supply trade system. Managing global supply chains requires navigating the laws of multiple jurisdictions to maintain compliance, qualify for benefits, and keep costs low. Compliance can also be a challenge for companies, who need to stay up to date with ever-changing trade rules and restrictions in order to keep up with the competitions.
Conclusion
Navigating the complexities of global customs legislation is difficult for companies that are engaged in international trade. Reform is ongoing, but businesses must also remain informed of new and changing regulations, and must be aware of the potential risks and liabilities they may face with operating in the global supply trade system. By partnering with global customs and trade specialists, businesses can easily and compliantly navigate the different regulations and processes involved in international trade. In doing so, they have the ability to take advantage of cost savings opportunities and manage operational and resource efficiencies.