In today’s intricate international trade environment, managing customs data is no longer just a necessity but a strategic imperative. From ensuring compliance to driving cost-saving initiatives and streamlining supply chain operations, customs data serves as the cornerstone of successful international trade ventures.
From my perspective, the significance of customs data has never been greater, yet it often remains an overlooked aspect in international trade. Allow me to delve into the factors contributing to this and offer some suggestions on how to change it.
Why is the importance of customs data growing? Let’s look at some factors
The Brexit aftermath, coupled with heightened environmental consciousness, the introduction of CBAM (Carbon Border Adjustment Mechanisms), prevailing global uncertainties and the following imposition of sanctions, there exists a multitude of factors demanding a reassessment of the significance of customs data.
When paired with shortages in customs knowledge and staffing, alongside the continuously evolving and intricate regulatory landscape, it becomes evident that staying on top of the businesses’ customs data and ensuring compliance has never been more imperative.
Importers and exporters must take the driving seat
As an importer or exporter, the responsibility of the businesses’ declarations and customs data rests on your shoulders, irrespective of whether you enlist the services of a customs broker or freight forwarder agent.
This may come as a surprise to some traders; I’ve often heard statements like “My broker takes care of that” multiple times over the years. While understandable given the complexity of customs procedures, it is not an excuse when customs authorities come knocking.
Beyond preparing for customs audits, reporting on CBAM, or complying with regulations, taking control of a company’s customs data yields several significant benefits. This includes avoiding overpayment of duties and VAT, rectifying human errors to uncover savings, and assessing customs broker performance to ensure smooth operations.
Customs compliance is no longer just about ticking boxes or keeping up with regulations; it can be a strategic advantage for businesses. Companies that demonstrate a commitment to compliance not only mitigate risks but also enhance their reputation as reliable trade partners.
In a time where supply chain resilience is paramount, leveraging customs data to bolster compliance can be a game-changer. For compliance, company revenue and customer satisfaction.
Importers and exporters need to take a driving role in this. The successful traders of tomorrow know this and are already taking the steps needed to meet the coming demands.
Traders growing need for Customs Broker Management
When businesses engage in cross-border trade and encounter customs procedures, they have three choices: handle all declarations in-house using their own staff and a customs declaration system, outsource the entire process to customs brokers or freight forwarders, or adopt a hybrid approach combining both strategies.
The decision on which option to choose depends on various factors:
Firstly, the complexity of your products – do you require in-house customs expertise to manage them effectively? Secondly, is it the most financially viable solution based on your company’s declaration volume, ensuring minimised costs? Lastly, from a strategic standpoint, does your company prioritise focusing on its core competencies (such as production and sales), while entrusting customs-related tasks to specialised brokers who excel in this domain?
If you opt for a customs broker strategy, it’s imperative to possess the capability and tools to to follow up on what they are doing. In almost every initial meeting with a new client, they express surprise at the number of brokers or freight forwarders handling declarations in their company’s name, often exceeding their expectations. Inco terms play a significant role here; to maintain control, companies should specify their preferred customs brokers to the sellers and may even provide explicit broker instructions. Regardless of the Inco term used, the legal responsibility for the accuracy of import declarations ultimately rests with the buyer.
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Unlocking insight through customs data analysis
Customs data holds the key to effectively monitoring the flow of your goods, enabling you to make informed decisions and ensure compliance in an increasingly digitized, complex, and regulated trading landscape.
By analysing customs data, companies can identify disparities, explore ways to reduce costs, implement operational improvements, and ensure effective oversight of supply chain activities.
Take, for example, the many businesses I’ve met that work with a whopping 70 to 80 different brokers and forwarders. Using customs data analysis lets them see how well these partners are doing, helping them make smarter choices and optimise operations.
How can Emma Systems help?
At Emma Systems, we’ve assisted over 4000 companies in optimising their access to customs data, archiving, analysis, and self-audit processes. Our solution, Emma E-Doc, is a digital customs archive and compliance platform equipped with advanced features for management, compliance, and analysis.
Our solution is customs broker-neutral, centralising all customs data under one umbrella, regardless of whether you utilise 10 brokers or 150. With advanced features, such as Dashboards & Alerts, you can easily streamline the analysis of data, enabling efficient monitoring and management of customs-related information.
Returning to CBAM as an example, Emma E-Doc Alerts are meticulously crafted to pinpoint irregularities, such as unauthorised brokers, unapproved countries, or missing declarations. This empowers you to tackle compliance issues proactively. With its adaptable alert system, Emma E-Doc Alerts provide an indispensable tool for efficiently navigating CBAM and associated compliance hurdles.
Get in touch to learn more about our offerings!
This article was first published in Fright Business Journal on June 12. 2024
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