Compliance is the act of doing what you are supposed to do. It’s a simple concept, but many complexities go with it.
Compliance is important for all businesses, large and small, but it can be particularly critical for companies trading globally from Britain. That’s why I am here, as a compliance strategist, to help you understand the importance of customs and global trade compliance and plan the right compliance strategy for your business.
By guest writer, Arne Mielken
Failure to comply is costly
Failure to satisfy official requirements can result in costly and time-consuming penalties for your business. For example, the consequences of non-compliance with customs requirements could mean that the importation or exportation of goods is delayed, or seized by the local authorities. This can significantly impact your business operations and cash flow as you may be required to take action on an urgent basis, incurring additional costs such as extra freight charges and storage fees while waiting for clearance. That’s not all, your company’s reputation is damaged when customers are not satisfied with the service they receive or if there are delays in delivery of goods due to non-compliant documentation or failure of inspection by Customs officials (e.g., lack of proof that products were made sustainably).
Do you know that they are looking at your goods?
It is generally difficult to know if HMRC or other authorities are looking closer at your business. As part of a risk-based approach, authorities (like customs) may conduct a compliance review for any imported or exported goods that do not meet the regulatory requirements. For example, HMRC may perform a proactive audit when goods are imported into the United Kingdom. There is actually no specific reason for the examination other than the goods being at risk for non-compliance. In other words, the goods were selected based on their high potential for non-compliance without any indication of wrongdoing by their importer or consignee (the party responsible for importing them).
The goal of proactive audits by HMRC is not necessarily to collect revenue but rather to ensure that UK consumers receive products that comply with our laws and regulations.
In search of the correct compliance strategy
With the right strategy, however, you gain control of compliance and, thus, the opportunity to keep the authorities off your back, maximise profits, reduce delays, cut costs and minimise fines. There are many examples of a compliance strategy across multiple sectors. But all requirements have at least one point in common: To keep your business up-to-date on the latest regulatory necessities and mitigate any risks concerning breaking various laws or regulations.
To ensure that you are following all local laws and regulations relating to international trade, we recommend that we design a compliance strategy for you – bespoke and directly relevant to your business.
Why the right compliance strategy is an engine of growth for your business
By implementing the right compliance strategy for your business, you’re taking measures to make sure that your goods are compliant with all regulations of the importing or exporting country – before they even reach the border! You can now confidently import or export in the knowledge that the data you submit to the authorities, the authorisations, licences and permits you hold and the marking on the products is correct – every time. For market entry and exit, a compliance strategy is a must.
Of course, you may already be aware of some of the specific regulatory requirements that apply to your business but there may also be additional regulations that apply across all businesses operating internationally. Sitting together with us to design your compliance strategy may also provide you with an overview of the key areas where compliance issues can arise and how they can be avoided, helping you to avoid costly fines and penalties for non-compliance with local laws.
What will a compliance strategy meeting look like?
Our compliance strategy is part of your overall efforts to divide the right strategy for your international market expansion. They rarely operate in isolation. They enable us to identify areas where there is a potential risk as well as opportunities for improved efficiency and overall cost reduction.
At the outset, it is important to understand that compliance strategy should not be considered a separate entity from the supply chain process itself. A robust compliance strategy should be developed throughout each step of the supply chain process, beginning with sourcing and procurement through to export and delivery of goods.
The following are some key considerations of what a compliance strategy consultancy with us looks like:
- Risk Assessment
A risk assessment is an essential part of any compliance strategy; it enables companies to identify their potential exposure in an increasingly complicated regulatory environment. Companies need to understand what can go wrong before they can develop effective controls against risk, which will help them remain compliant with all applicable laws and regulations within their supply chains at all times.
- Regulatory Environment
We work through each step of this process from sourcing and procurement through export delivery so you can remain informed about how goods travel from the purchase destination.
Companies need to assess how much money they’re spending on elements like compliance training, audits and other requirements for staying compliant for them not only to stay afloat but also to thrive as businesses across different industries continue adjusting their strategies due to globalization trends (such as cross-border trade).
With global trade comes global risk. Global trade is more complex than ever before, with a multitude of agencies, laws and regulations to consider. As such, it’s important for businesses operating in this environment to understand the risks associated with importing and exporting goods and how they can mitigate them.
At the end of the day, compliance is an essential part of running a successful supply chain. If you want to ensure your business can continue to operate successfully in today’s global market, then it is vital that you have a comprehensive and up-to-date understanding of regulations and requirements. The best way to do this is by designing a compliance strategy which will identify any potential risks and give you the power to mitigate them before they become an issue.
Get in touch and schedule a call with me today!