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Three Trade Compliance Issues For High Tech Manufacturers

Manufacturers of high tech products often face restrictions and controls if and when they ship goods across regions and countries. In this QAD Precision Report, we look at the three most pressing compliance issues for high tech enterprises.

Innovation, at its core, is spreading new ideas to new people. For high tech manufacturers, this means spreading product across audiences, regions and even countries. Unfortunately, the global trade landscape isn’t especially open to the constant movement of goods and ideas, and many customs regulations make it difficult for manufacturers to transfer goods across borders.

Adhering to customs and trade compliance regulations is crucial for high tech manufacturers, as there are some very real consequences attached to these seemingly innocuous laws. Monetary fines, penalties and shipping issues (read: delays) are a very real possibility, and these outcomes all put the customer experience at severe risk. High tech manufacturers can address many of these issues with better record keeping and documentation, which is one of the biggest pitfalls of the current global trade compliance landscape. Maintaining trade compliance is a great way to take proactive steps towards optimizing customer satisfaction.

Below, we’ll explore three of the top trade compliance issues for high tech manufacturers and tips on how to overcome them.

Restricted Party Screening

For many high-security shipments, only specific entities or individuals are able to receive. If this person isn’t available or is off-site, it’s common to just get sign-off from any warehouse employee who happens to be present. Unfortunately, this practice violates trade compliance laws and can lead to serious fines. Particularly with certain types of technology, licensing restrictions may limit who can handle specific shipments and who cannot.

To make sure denied parties screening doesn’t come between an organization and streamlined shipping, it’s crucial to maintain clear and auditable documentation of all restricted or licensed parties, as well as deliver customs data in a easy-to-manage format. Often, denied parties screening issues arise when one person is out of the office and nobody else knows how to manage the workflow. With a documented process in place, denied parties screenings can run smoothly and efficiently.  

Licensing Control

For high tech manufactures looking to spread their innovations overseas, it’s important to be aware of certain licensing controls and regulations. It’s common that manufacturers that create technology in one country cannot simply ship goods without restriction to another country. For example an item is shipped from a non-US country but contains a substantial amount of US technology or IP. Even though this item is not shipped directly from the US, it is still subject to US export controls. Manufacturers must manage these licensing agreements extremely carefully, as well as monitor and record every interaction and checkpoint in case of audit. 

Leveraging a cloud-based global trade compliance solution can help take the guesswork out of licensing. With licensing requirements and regulations stored for individual manufacturers by critical metrics such as country, item, date or value, these platforms make it easy for logistics managers to ensure no licensing issues slip through the cracks, thus protecting a manufacturing organization from potentially devastating risk.

Sanctions

With today’s ever-changing global economy, it’s important for high tech manufacturers to keep a steady pulse on changing government export controls and sanctions. These sanctions include shipping bans on countries like Iraq and Cuba alongside detailed caveats on transferring high-security technology across borders. The consequences of doing so are monumental. Just ask the companies that ended up on the United States’ “Don’t Let This Happen To You” publication of actual investigations of export control and anti-boycott violations.

For high tech manufacturers to stay completely up-to-date on sanctions, it’s important to have technology in place that is constantly updated and refreshed so that all new regulatory agency data?including the lists of sanctioned countries?are readily available to key stakeholders. This data can be associated to individual shipments to create more accurate records and facilitate more complete follow up.

Think Globally

So how can a high tech manufacturing organization successfully overcome these compliance issues? Implementing a cloud-based solution, such as a global trade compliance management solution, can help streamline the compliance documentation process while opening the door for a more hands-on, custom service approach.

For high tech manufacturers looking to grow across international borders, global trade and export management solutions deliver best-in-class analytics and visibility to international logistics managers as they seek ways to overcome compliance issues. Used in tandem, trade compliance management and global trade and export management solutions deliver a suite of tools designed specifically for addressing global trade issues, overcoming compliance roadblocks and streamlining manual efforts?all with the end goal of providing an amazing customer experience.

As high tech manufacturing organizations look to expand global operations and streamline trade compliance efforts, they must consider how to handle the roadblocks in front of them.

About QAD Precision – Trusted Global Trade and Transportation Execution

QAD Precision (Precision Software), a division of QAD Inc., provides industry-leading global trade management, transportation execution and multi carrier shipping software solutions from a single, integrated platform. Preeminent industry leaders in every region of the world rely on QAD Precision’s global support centers to leverage thousands of carriers and manage millions of shipping transactions every day. Our open architecture easily integrates with Enterprise Resource Planning, Warehouse Management Systems and legacy solutions. An ISO-certified company, QAD Precision assists companies to minimize shipping costs, optimize first mile and last mile deliveries, automate free trade agreement compliance, avoid customs delays and mitigate the risks associated with dynamic trading environments to maximize their competitive advantage. QAD Precision’s customers span multiple industries including banking and finance, life sciences, high technology, retail, industrial, automotive, higher education and public sector as well as logistics providers. For more information about QAD Precision, visit www.qadprecision.com.

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