Why It's Not Wise to Go It Alone When It Comes to International Business

Today's business world is increasingly more global. The laws and regulations involved with doing business on an international level are more complex than ever. Good trade compliance involves dealing with various government agencies and bureaus, including the U.S. Department of State, the U.S. Department of the Treasury, U.S. Customs and border protection, and even the U.S. Census Bureau. Rules, regulations, and procedures are often changed or altered with little notice. 

Failure to comply with trade laws can result in stiff fines, civil and criminal penalties, and even jail time. Failure to classify export products or properly train employees in trade compliance procedures doesn't only cause legal headaches, but it can damage a company's reputation and become a PR nightmare. Having someone with experience in international trade laws and regulations on board can be a valuable asset for any company doing business on any level outside the United States.

Depending on what products a company exports, additional compliance may be required. Even incorrect Export Control Classification Numbers (ECCN) or Harmonized Tariff Schedule (HTS) numbers, whether intentional or not, can cause problems such as fines and costly product delivery delays. Even if a company is usually very diligent when it comes to compliance with international trade laws and regulations, changes to existing regulations or new regulations can crop up with little advance notice. Therefore, it's just as important to make sure all employees are familiar with trade regulations.

Ignorance of the law is rarely a valid defense when it comes to imposing fines for non-compliance. The International Trade Compliance Institute, however, reports that many exporters and importers fail to comply with international trade regulations out of ignorance. This isn't restricted to only U.S. companies, but U.S companies are held accountable by U.S. agencies for failure to comply with trade regulations. Conversely, additional penalties may be imposed by similar trade regulators in other countries. Failure to comply with trade regulations doesn't just impact a business; it can also negatively affect job growth and even impact international relations.

Basic compliance usually includes having documented import and export compliance on file and verifying that all international parties such as banks and transportation providers aren't on any U.S. government checklists. Such lists are meant as a guide, but dealing with unverified international parties can contribute to legal issues later. It is also recommended that all employees receive training or refresher training to remain current on trade regulations at least every six months.

International trade isn't only vital to the U.S. economy, but it is often directly linked to the success of an individual business. Both small businesses and large corporations must adhere to the same regulations. According to the World Trade Institute, more than half of all U.S. businesses do some level of business overseas. Yet, some U.S. businesses don't have a compliance department or anybody specifically in charge of compliance. It may be cost-effective to streamline operations these days, but fines for non-compliance aren't really worth such a risk.

Companies that cannot realistically afford to have a compliance department should consider hiring a firm specializing in international law to ensure full compliance in all overseas business dealings. This is a cost-effective solution that doesn't leave a business vulnerable to fines for not adhering to international trade regulations. Clearly, there are markets beyond the U.S. border that cannot be ignored. Even smaller businesses can benefit from doing some business on an international level. Selecting a firm experienced with international trade law offers businesses one very important asset: peace of mind.