As Payara supplies our support both domestically and internationally, I thought it prudent to attend a recent course hosted by the local Chamber of Commerce regarding International Trade Compliance to understand better the requirements of export …..especially in light of the eventual UK exit from Europe!
Unfortunately, the course covered the exporting of goods, not services, to Europe – but it still explained the legalities and requirements of UK HMRC even if not relevant to us. As the effect on the export of services is still not known, and until it is, Payara is doing all it can to mitigate any risks by building resilience into strategy. Therefore, as Finance Manager, I am working hard to understand all implications for service businesses by training, reading, and using professional support and Government websites.
What is Trade Compliance?
Trade compliance is the ability for all businesses to work closely and collaboratively in the complex world of International Trade and ensure all the laws and regulations are complied with from the country of export through to the country of import.
The whole business, led by management statements and awareness, must buy-in to the fact that compliance is not the role of an individual but of the whole team because it affects everyone.
International trade involves a complex web of suppliers, shippers, finance, freight forwarders, and customs authorities, but at the end of the day, it is our business, our reputation and our relationship with customers, suppliers and the authorities that is at stake.
Compliance is about:
- Day to day activities
- Understanding the rules
- Working to the rules
- Documenting the activities
- Proving, measuring, improving, and reporting
What Happens to Businesses That Are Not in Compliance?
Penalties for non-compliance range from unhappy customers, to delayed shipments and missed deadlines. Commercial penalties can come in the form of official fines and financial penalties, loss of reputation or imprisonment for individuals or their management (who should have known better).
If and when our exit from Europe is finalised, what will be affected? The UK will be a third country- with or without a trade deal. Practically, the exit from Europe means:
- Customs declarations
- Security checks at borders for goods
- Evidence that goods, and possible services, meet EU standards prior to access Paperwork – especially origin statements
- Customs duties and taxes
- Potential loss of freedom of transport
- Trade tariff measures will apply, e.g., licences, quotas, ceilings to avoid increased costs use preference and duty reliefs
- EU external customs laws apply to us, e.g. definition of exporter Acceptance of UK standards or still use EU standards
This will be a total minefield for exporting goods and possibly services to Europe and the rest of the world. More information can be found on the UK Government website: https://www.gov.uk/government/organisations/department-for-international-trade