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Startup Businesses and Trade Compliance

New Startup Businesses should start looking into developing a trade compliance processes early on. A small business may not be a major concern for the government, but it is important to monitor and keep an eye on all imports and exports. Developing sound trade compliance processes early on can reduce the risk of breaking compliance laws and falling victims to fines and penalties, while also making sure that any sensitive materials or technologies do not end up stolen, missing or misplaced.

It is especially important for startup businesses to be conscientious towards compliance if they plan to operate internationally. While startups may not be importing and exporting items on a large scale, it is still important for them to be aware of certain rules, regulations, and documents related to imports and exports. Exports for instance, require that certain licenses, classification, and documentation be completed and submitted in the appropriate manner based on what is being sent, if it is for civilian or military use, the destination, importer or recipient, and the intended use of the item. Items related to defense and space under the International Traffic in Arms Regulations (ITAR) may be subject to additional classification codes and information required in the shipping documentation that is submitted to the government.

Conducting international trade, or business with embargoed or sanctioned countries can put businesses at risk for significant legal penalties and fines, and an overall loss of trust within the industry. There are several lists available of denied parties, or countries with which one should not conduct business, maintained by the US, European Union, and United Nations. Startups share the same responsibility in adhering to bans and sanctions as the most experienced companies do, especially if they want to maintain and develop a good standing with the customs agencies in the countries they are dealing with.

Addressing trade compliance concerns early on, while a business is still in the startup stage, is important because of the sensitive and detail-oriented nature of international trade. Regulations and legal agreements can be difficult to follow if one does not have knowledge of forms, documents, codes, fines, duties, etc. Any violation of these regulations can be subject to fines, legal action, or seizure of the merchandise, depending on the violation. A history of violations can result in the loss of import privileges and the revocation of relevant licenses.

In closing, it would be beneficial for a startup business to incorporate trade compliance, processes or include trade compliance personnel early on in their business journey to avoid costly mistakes once the business is ready to expand internationally. Violations and issues with documentation can be avoided if there is a trade compliance specialist on hand. Developing a good standing and positive relationship with customs early on is important to maintain a positive role in the industry of global trade.

Contributor: Angelique Jones


About Allyn International

Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance. Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North and South America, Europe and Asia. Allyn’s regional headquarters are strategically located in Fort Myers, Florida, U.S.A., Shanghai, P.R. China, Prague, Czech Republic, and Dubai, U.A.E. For more information, visit www.allynintl.com.


Reference Article Used: (2022, April 20). International Trade and Export Compliance 101: Descartes Visual Compliance. Export Compliance Journal. Retrieved September 23, 2022, from https://www.visualcompliance.com/blog/?p=2359

 

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