4 International Trade Compliance Issues You Need To Consider

Posted on: 5 March 2020

With the arrival of a highly globalized economy, international trade compliance is a challenge that many companies are facing. Whether this is your first time confronting these concerns or you have plenty of experience, it's wise to talk with an international trade compliance services firm to get a sense of the issues you'll face. Let's look at four such topics you may need to address.

Setting Up Contracts

One of the oldest and most basic challenges in international trade is putting together a contract. Many little issues will come up along the way, and buyers and sellers often struggle to figure out who'll handle them. For example, who pays the customs duties when a shipment arrives at its destination? A good contract should be designed to answer these questions and streamline processes before predictable problems are encountered.

Controls

A number of regulatory controls exist to prevent the transfer of different technologies, chemicals, and products. In the most extreme form, you might be dealing with questions about arms control regulations. It's easy to look at what a company sells and assume it's innocuous, but regulators may see certain products as potentially dangerous tools that could be used by terrorists, authoritarian regimes, organized crime syndicates, or other parties.

Quarantines

One big downside to globalization is that nations are afraid of lots of different diseases, insects, and other types of bugs potentially coming into their countries. In terms of trade compliance, these issues influence the products that are shipped, how they're handled, and even the packaging. If you send a palette of fruit to another country, for example, there's a good chance it needs to comply with regulations aimed at preventing wood-borne insects from invading.

Circumvention

Regulators have become especially suspicious of circumvention measures. For example, the U.S. has anti-dumping rules that are aimed at preventing Chinese manufacturers from offloading cheap steel into American markets.

Where things get tricky, though, is that use of the global supply chain can look like circumvention of these rules. Suppose a car company imports steel from China to make components, but it then ships the components to plants in the U.S. for assembly. The nature of the finished product that is shipped, in this case, the component coming to the U.S., is usually what determines whether the action is a form of circumvention.

An international trade compliance consulting team can keep you on the right side of these rules. Talk to one to learn more. 

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