Over the past few decades, rapid globalisation has meant that traders all around the world are highly connected. It has become much easier to export and import products to different parts of the world. This has provided them with access to new markets, smoothened out the supply chains, and ensured that pricing differentials could be exploited. However, there are also certain drawbacks of such globalisation. Importers and exporters need to be extremely careful regarding the rules and regulations in different parts of the world. This blog will help traders in understanding the challenges of multi-national laws, as well as informing them about how to overcome key hurdles.
One of the most important considerations for traders is to minimise the risks associated with exports and imports. This can only be achieved if they are fully compliant with the regulations. Consider the example of a European trader seeking to export products to the US. In this case, the trader must ensure that both the local export control laws and the US export laws are met. Products need to be classified and mapped according to both jurisdictions. In addition to this, the quantity and control requirements also need to be met. There may be instances where the trader can only comply with one set of laws.
In such a case, the traders can face a complex situation. They must balance out the compliance requirements in such a manner that their risks are minimised. Another major challenge that could be faced by traders could be in terms of the pricing and cost calculation. Each country specifies different rules in terms of expenses and final mark-up prices of products. Therefore, traders must make sure that they are fully aware of the legal requirements, and they comply with these before executing the trade. A similar strategy needs to be followed in terms of international tax compliance.
There are two major ways to deal with such challenges. One method is to communicate with the authorities and find the best way forward. This technique helps traders because they are proactively highlighting a potential problem to the authorities. However, this strategy is not always successful because the authorities may not be able to provide the traders with a viable solution. Another alternative is to seek advice from industry experts. In this case, the traders could avail the help of specialised software or trade wizards who are familiar with the nuances of these laws. Such industry experts can help traders in resolving compliance issues, classifying products under the appropriate categories, and ensuring that the risks of fines and penalties are minimised.
In order to make sure that they are fully compliant with the regulations of different jurisdictions, traders can avail the services of trade management solution providers such as OCR. We provide customised solutions pertaining to regulatory compliance. OCR’s trade management software helps traders in classifying the different types of imports and exports so that full compliance with the regulations can be ensured. Please contact us to find out more about how we can help you with our trade management offerings.