Post by Ismail AbdulAzeez on Oct 19, 2019 20:19:13 GMT 1
Export compliance is defined as a multidisciplinary and specialized framework, which supports enterprises in compliance risk management, like the risk of reputation deterioration administrative or administrative sanctions or financial losses for non-compliance with rules, regulations, laws, and legislation, codes of conduct and good practice .
It includes all international activities of organizations including export and import of any kind of commodities and/ or services, whether tangible or intangible assets (also the money transfer or payment) which somehow are subject to restrictive regulations (Dual-Use, Sanctions and restrictive measures etc.) enforceable to arrangement between two different jurisdictions/ states/ entities.
Effect of Export Compliance
One of the challenges of export is export compliance. In this article, we will discuss the nature of export compliance and its effect on entrepreneurship.
At one time or the other during export process, investors may face the potential compliance barriers, which may jeopardize their activities and sales in the global markets.
Export compliance emerges as a very important factor in the world of export business. It mostly determines the success of your investment as an exporter. Non compliance with export regulations may result in goods rejection or waste on the long run, which in turns result to a regrettable loss.
Recently, one of the accelerating challenges for the firms intending to expand their market abroad is the conflict they experience in global markets.
More precisely, companies need to be compliant with the international regulations, laws, and rules and avoid falling into the violation of non-compliance, which make the world unsafe.
Compliance in different regions
The United States is the leading government that initiated to monitor suspicious trades and transactions in cross borders and regulates legislations for the international transactions and trades. The European Union and United Nations joined the U.S. to manage global markets in export compliance problems by regulating restrictions on the parties who do not respect the regulations.
However, depending on the size and the nature of the firm, compliance programs might vary. For instance, some firms decide to appoint a single expert responsible for compliance endeavors as well as administration, performance, and coordination of export. Other kinds of organizations prefer to decentralize these authorities to a number of employees throughout the organization and supervise these responsibilities to make sure if essential compliance standards are maintained. To avoid of failing to comply with export regulations the size and organizational structure, and production/ distribution network of an organization act as the crucial determinants of where personnel and compliance functions should reside. Many enterprises amalgamate the administration of recordkeeping, training, dissemination of regulatory material, the alarm of failure to comply, and audits. However, wherever firsthand knowledge and information of customers is available, the actual screening efforts against different governmental restrictions of foreign individuals that ought to be avoided, known and tracked end-use and end-user activities, and violation risk may be carried out by personnel throughout the organization like in sales and marketing, order entry, or shipping
Non Compliance effect
However, export compliance is an issue that may be a small segment of overall organization’s compliance program, nevertheless, if not properly addressed could create major challenges (BIS 2017 ).
However, failure to comply with international regulation about the export compliance will lead to consequences, including sanctions, blacklists, fines, and punishments.
In further articles, we shall be concluding on the topic. We also expect feed backs from you.