What is Global Trade Compliance ?

Global Trade Compliance

Global trade compliance (GTC) is an aspect of corporate compliance which ensures that all import and export transactions are in conformance with the laws and regulations of the countries involved. Adherence to trade compliance best practices is also important for in-country transfers of goods manufactured aboard.  For companies with any complexity or scale surrounding imports and exports, the safest choice is often an internal trade compliance program that leverages GTC technology. Some solutions continually update the trade classification content. GTC software, in turn, enforces processes that help companies reliably comply with trade laws. Better compliance will result if oversight of the compliance function is centralized, even if some trade compliance officers continue to work in different regions of the world.

For each of the risk/benefit areas – improved compliance, protecting the brand, logistics efficiency, improved sourcing, and freeing up cash flow – there is specific functionality in the GTC solution. Companies need both trade content and an application that enforces the compliance process. Companies should ask themselves if they prefer to get the trade content from the same company that provides the GTC application. Or is it all right if the GTC solution provider has an alliance to get that data from a content vendor?   

Compliance functionality should be based upon the ability of a system to provide an audit trail that shows how goods were classified with a logic tree that explains why the goods were classified that way.  In many jurisdictions, this audit trail demonstrates “good faith” and means even if a declared good was misclassified, the company would be given credit for exercising diligence and would likely avoid the most severe penalties (if they received any at all).  Many shippers, if audited, have no ability to explain why they classified goods as they did.

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