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NDTO News Article

Moving Parts: Trade Compliance Experts

Legal obstacles, contractual obligations, restrictive terms and conditions… Exporting is not without its complications. When it comes to trade, there’s no easy way through the mountain of requirements upheld by the world’s governments and agencies. Though these rules are in place for a reason, they can make the exporting process agonizingly slow, bleak, and confusing, until you feel stranded in a wasteland of international law and indices.

However, you don’t have to suffer the tedious work of market compliance all on your own. Trade Compliance Experts are trained to make sure your business adheres to all proper trade standards so you never run into trouble.

Welcome to “Moving Parts,” a new series from the NDTO where we will discuss the many individuals and organizations that make international trade possible.

 

Trade Compliance Experts: What They Do

Trade Compliance Experts may operate under several titles: Compliance managers, compliance officers, international business specialists, legal advisors, customs brokers, logistics personnel, etc.. The point is, they all deal with at least one aspect of trade compliance, and they are a necessary weapon for all exporters to have in their arsenal.

Much of what they do relies on making sure your goods and/or services get from point A to point B without being delayed by anything from accidental illegal practices to shipping errors. According to Reidel Law Firm based out of Galveston, Texas, their work may include:1

  • Protecting the integrity of an organization’s trade compliance initiatives
  • Confirming alignment between business operations and applicable legal requirements
  • Overseeing audits and investigations to maintain adherence to compliance standards
  • Performing risk evaluations
  • Keeping abreast with current industry movements and upcoming regulatory changes
  • Ensuring products are classified correctly according to regulatory guidelines—a fundamental step for conformity with trade legislations.
  • Acting as the main liaison within their organization for any issues or questions related to trade compliance.

So much of your export success will hinge on how your business remains calm and organized in the face of the many expectations that will be thrown at you from every corner of the market. Leave it to your designated Trade Compliance Experts to shield you from the occasional shortcoming or oversight.

 

Common Mistakes

Now that you know what Trade Compliance Experts do, let’s discuss some of the errors we make that they work to prevent.2

The Incorrect Classification of Goods

When it comes to customs fraud, incorrect classification is the number one cause of trade disruptions.3 The customs authorities need precise and accurate records, so they know what duties to charge you for. Your Schedule B classification acts as an outline for obligations on both sides.

There are plenty of online resources that allow you to classify your goods accordingly. For instance, the U.S. Census Bureau’s Schedule B search engine. Still, it is paramount to have a Trade Compliance Expert on board who can verify your classification and ensure it won’t get caught up in customs.

Improper Licenses or Permits

According to the International Trade Administration, “95 percent of all items exported from the United States don’t require an export license.”4 Still, it’s important to do your research—every time. Because if a new product or service happens to fall into that five percent that do require licenses, and you move forward with exporting without doing the proper checks, you could be in for a whole host of issues.

Not to mention, even if a license isn’t required for your product, that still doesn’t mean you have the right to sell it anywhere you please. Trade Compliance Experts can ensure that the countries you wish to do business with don’t have license requirements of their own, that your product doesn’t fall in that five percent, and that your unlicensed transactions abide by U.S. law.

Non-compliance With Trade Embargoes and Sanctions

Remember how I mentioned the tedious side of trade compliance? Here’s one such example.

Embargoes and sanctions are as much a political statement as they are a security measure. When the U.S. sanctions trade, it’s often motivated by foreign policy objectives—we are reiterating our power by withholding economically beneficial transactions from adversaries and high-risk partners. Nonetheless, these sanctions do a great deal to protect business owners from devastating financial losses and targeted fraud. The Office of Foreign Assets Control has a list of active sanctions by country for public use.

If you overlook these sanctions and even so much as attempt to do business with an embargoed country, you could be hit with a storm of consequences: legal repercussions, fines, export license revocation, criminal prosecution, etc.5 Not to mention, your reputation will take a hit.

Trade Compliance Experts are crucial to making sure you’re doing business with the right people, and staying far away from the wrong ones.

Inadequate Due Diligence

Checks and balances, checks and balances, checks and balances! Just like with any business transaction, you should never let major details slip through the cracks when trading.

Due diligence heavily relies upon communication: Do the buyer and seller know all the facts? Do they agree upon the terms? Does the buyer know their role and their seller’s reputation? The seller theirs? And on and on. Trade Compliance Experts are the perfect middleman when it comes to clarifying these details and outlining expectations.

 

North Dakota Resources

Not to state the obvious, but the North Dakota Trade Office knows a thing or two about trade compliance. Our export planning resources are available to all members. Contact us to learn more.

Another great organization is the Rural Export Center, their national office based in Fargo. If you’re a rural business seeking international trade compliance expertise and help with your overall operation, REC is a great choice. You can start by applying for a free research consultation here.

Otherwise, you can discover countless law agencies that deal with international law and trade all across the state. You can learn the details of their trade compliance expertise by contacting them individually.

 

Trade compliance is a tricky practice, but it doesn’t have to cause any headaches. By working with well-equipped, knowledgeable, and experienced Trade Compliance Experts, you could be saving your trade operations from premature failure. Trying to do everything yourself, especially if you aren’t trained to the best of your abilities, is never a good idea. Leave it to the pros, and just remember to appreciate the “Moving Parts” of exporting.

 

Please reach out if you have questions or would like more information at info@ndto.com.

 

1Trade Compliance Roles and Responsibilities Cheatsheet – Reidel Law Firm – Texas Based, Global Reach

2Trade Compliance Penalties and Fines Cheatsheet – Reidel Law Firm – Texas Based, Global Reach

3Customs Fraud by Misclassification of Goods | The Geography of Transport Systems (transportgeography.org)

4U.S. Export Licenses: Navigating Issues and Resources  (trade.gov)

5Export Sanctions & Embargoes: Risk Management – Star USA, Inc.