It is understood that a global supply chain is complicated and at the same time vulnerable as it doesn’t take too much to disrupt it. Disruption of the supply chain can have a global impact and countries can face a severe shortage of essentials if it breaks due to any reason. One of the crucial components in a robust supply chain is to have an effective Customs Risk and Compliance system that will allow all goods to seamlessly move through the global network and point of entries without facing delays.
Why customs risk and compliance are important
Most countries across the world have created a robust, stout, and strict customs clearance system. This is required to ensure that all imports and export happen within the limits of the law. Customs risk and compliance are especially important to the transportation and logistics companies so that they can ensure their shipments reach their destination on time. Compliance management is also important because goods can be subjected to certain prohibitions, product requirements, and restrictions in various countries depending upon their laws. If these regulations are not adhered to, companies can face serious consequences. To avoid delays, shipments waiting at international borders awaiting clearance, waste of time, energy, money, the goods, etc can be saved if customs risk and compliance management are in place.
Since it involves a lot of paperwork, knowledge of international law, and laws about different countries, companies often appoint and customs risk and compliance manager or hire agents who will set it all clear for them. This is a specialized field and requires specialized knowledge, which is why it is important to hire the right talent if you wish to go in that direction. But it can surely make your work a lot easy as these people know what it takes to custom risk manage and be compliant with the laws.
Customs risk and compliance essentials
While hiring a customs risk and compliance manager can make a huge difference in the way your shipments move across the globe, having the right knowledge is also important. Here are a few things you must know to develop a customs compliant work model:
Get the classification code right
Every product that travels in international waters requires a classification code. This code determines how it will be taxed. And if you get this code wrong, it can shoot up your payment. Incorrectly classified products might also face delays and difficulty in getting customs clearance. If you hire a customs broker, they can help you get that code right. Different countries have different classification assertion rules and getting it right as per the country you are shipping your products to can become overwhelmingly difficult. This is why make sure you have the right classification done.
Make sure you get the valuation of the goods right
This is where most companies falter. Valuating your goods is essential as it is this value on which the customs duty will depend. Miscalculating the right value of your goods can have a drastic impact on the amount of customs duty you pay at international borders.
Keep all your documents in place
Correct documentation is one of the most essential aspects of adhering to customs and the easiest ways to get your shipments across. International logistics requires a lot of paperwork and a customs agent can get it all done. As they have the right knowledge, they can double-check if all the documents are in place. Some of the must-have documents include an invoice, packing list, insurance papers, terms of sale, bill of lading, import permits, etc.
Keep track of customs compliance of your destination
Different countries have their own customs rules and regulations. And no matter where you are coming from, you need to comply with their laws to be able to enter their country. Having the right knowledge of these laws can make things easier for you.
Keeping up with the customs is one of the most essential parts of the transport and logistics companies. For any logistics company to excel, it must have a proper customs risk and compliance management system in place so that the supply chain is not impacted due to one bad freight. This is the reason why several countries across the globe are making humungous efforts to ensure all their major players in the logistics sector are customs compliant.
Not just that, various countries are also making sure that their customs clearance is efficient so that incoming shipments don’t waste time and money waiting at the international border. Most countries in the GCC area are promoting logistics companies that provide customs clearance services so that this sector can continue to remain the strongest pillar of their diversifying economy.