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Companies looking to comply with new rules on global trade have a lot on their plate. Leto says regulators are stepping up their audits, even as tariff barriers are falling. "Governments are coming up with non-duty-based ways to stop goods from coming in," he adds.
Ironically, governments are using the same tools for this purpose that have been deployed by business - including sophisticated business-intelligence and data-mining software - to keep track of imports. These days, a single change in the value of a part can create a "flag" that triggers an audit.
The upside is that government won't bother companies if they are consistently conforming to the rules. But that goal is becoming ever more difficult to achieve, given the growing complexity of global supply chains and the sourcing of products in multiple countries. "Every single one of those transactions is an auditable event," says Leto.
The stricter regulatory regime extends beyond the U.S., where the top 5,000 importers are audited every few years. The European Union, China, Taiwan and the rest of the Asia-Pacific region have all embraced state-of-the-art tracking systems to ensure importer compliance.
Companies must take special care in the shipment of miscellaneous items that fall outside their normal business operations - items such as engineering samples, returned materials and promotional goods. Governments increasingly are tagging such transactions for special audit. Leto advises importers to keep all documents, as well as refer to denied-party lists. Enterprise resource planning systems tend to have the built-in capability to accomplish that task. He estimates that the top 3,000 companies are spending around $5bn a year on trade compliance and automation software.
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Keywords: supply chain, supply chain management, supply chain risk management, international trade, trade compliance, supply chain systems, inventory control, logistics services, supply chain planning, retail supply chain, sourcing solutions
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