Integrated Trade Compliance Strategies: Seven Best Practices of Leading Traders
Best Practice #4
It should come as no surprise that compared to businesses still largely reliant on manual recordkeeping and paper-based systems, organizations that are effectively utilizing the latest generation of automated trade solutions are far more likely to be in compliance with all applicable regulations, thereby avoiding costly government fines and penalties. With this in mind, automated tools, centralized electronic recordkeeping and, most critically, the visible audit trail they facilitate, are now generally recognized as being absolutely necessary elements of a best practice approach to trade compliance.
A variety of different software solutions are presently being used by companies to manage their trade compliance functions — internally, through a third-party, via a portal, or with a trading partner. Additionally, an increasing number of supply chain software providers are teaming up with global trade management service providers to develop joint solutions that integrate and automate import, export, and trade agreement activities with logistics applications designed to track shipments, provide landed-cost assessment, ensure accurate data management, avoid fines, and leverage trade agreements favourably.
“Systems have been put in place to track and measure trade compliance variables in supply chains and sales channels”
Of the various solutions available, nearly half of companies we surveyed still prefer to utilize the system capability provided by their ERP vendors for global trade compliance. Toshiba Canada, for example, recently integrated their import database into the company’s ERP program so that now whenever a purchase order is generated (domestic or international) it is first automatically “scrubbed” through a “compliance aware” product matrix in the database to identify potentially controlled goods for final review and approval by the export compliance department.
Regardless of the particular technology utilized, the compliance systems of best-in-class companies tend to share the following features: online access to trade-related content (e.g., HS classifications); import/export document generation capabilities; automated commodity screening (e.g., for denied, restricted, sanctioned goods before and at transaction); electronic document exchange with service providers; updates and validations to/from HS classifications and product matrix database; and compliance-to-cargo security programs such as C-TPAT.
Also in this series:
• 7 Best Practices of Leading Traders
• Corporate Leadership is Essential to Effective Trade Compliance
• Trade Compliance Needs to be Owned by a “Champion” or Team Within the Organization
• Successful Trade Compliance Depends on Benchmarking
• Effective Communications Protocols are Vital
• Integrate Trade Compliance Into Plans For Growth & Expansion Into New Markets
• Team up with Professional Service Providers for Compliance Success
• Putting Best Trade Compliance Practices Into Action
• Best Practice Compliance: Benchmarking Questions