Selling your goods globally means you must adhere to a number of
rules and regulations. In this 3 Minute Explainer, we look at the
basics of export management.
The trade in physical goods is one of the cornerstones of the global
economy. Everyday countless items travel make their way from Point A
to Point B.
Despite our reliance on global trade, items cannot always travel
freely. There are many laws governing the movement of goods. This is
true for all types of companies and all types of export transactions.
Whether you ship raw materials or finished goods, or to consumers or
businesses, you must comply with foreign trade regulations.
It is illegal to contravene international trade regulations.
Companies that do so can face fines and other penalties. These could
be serious, including loss of export privileges and even jail time.
Let’s take a look at some of the most important export management regulations.
Companies engaged in foreign trade must adhere to sanctions and
embargoes. Nor may companies engage in trade with restricted or denied parties.
Almost every day, countries announce new sanctions against countries
or individuals. These may include total shipping bans on countries
like Iraq. However, there are also more complex sanctions. For
example, hybrid sanctions allow certain commercial activities, but not others.
Furthermore, governments may ban trade with people or groups involved
in organized crime, terrorism and other serious offenses.
Around the world, governments and international organizations compile
'denied party lists" (DPLs). These are groups, entities and
individuals with whom it is illegal to trade.
Depending on what you ship and where you ship to, you must ensure
your trading partners are not on these DPLs. Exporters need to perform
party screening before shipping. That is, check their orders
against DPLs. Restricted party screening is also known as denied party
screening; or sanctioned party screening.
Manually screening against all necessary DPLs takes time. For high
volume exporters this becomes almost impossible to manage. However,
despite these challenges, global trade law requires shippers to do so.
For manufacturers of controlled goods, this is even more crucial.
Failure to do so can result in fines, loss of export privileges or
Governments around the world require licenses and permits to legally
export certain goods. These include dual use items. Dual use items are
goods that have a potential military application as well as a
commercial one. These licensing controls can apply to goods that may
seem innocuous, such as a life jacket.
Exporters need to manage licenses by date, quantity and/or value.
They need to know how many licenses they have used and where, as well
as how many are available.
Export licensing restrictions may also apply to technology developed
in another country.
Consider a manufacturer in Germany. This manufacturer uses US
technology or intellectual property in a finished product. As a
result, the manufacturer must also abide by US export control laws
when shipping to a third country.
Certain licenses have recipient restrictions. This means you may only
ship them to specific named individuals. So, it is illegal to hand
over the delivery to another person if the recipient is not available.
If goods get “stuck in Customs” chances are, this is because some
crucial paperwork is missing.
Along with the necessary transportation paperwork, internationally
shipped goods require export documentation. This could include:
Certificates of origin
Dangerous goods notices
Bills of lading
A cloud-based export
management solution can streamline all aspects of exporting your
goods. This includes trading partner screening, licence management,
international, regulatory and multilingual export documentation.
Automated solutions can connect with government systems. This allows
companies to electronically file documentation.
This offers companies several advantages. By leveraging
automated export compliance software solutions, enterprises can:
Automate manual processes
Track critical export processes to ensure all necessary steps are taken
Mitigate the risk of an export compliance misstep
Create audit ready reports
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MANAGEMENT AND AES FILING FOR US EXPORTERS
INTEGRATE EXPORT MANAGEMENT AND TRANSPORTATION
MINUTE EXPLAINER: WHY YOU SHOULD AUTOMATE TRADE COMPLIANCE