Reduce Risk when Exporting and ImportingAugust 5, 2015
Risk is a reality in any small business. This is particularly true when it comes to international trade. If you’re importing or exporting goods or components to or from another country, there are a number of things that can open your business up to liability: non-compliant vendors, inaccurate or incomplete documentation, even the unintended end-use of your products.
In addition, poor compliance practices can expose your business to delays, retroactive duty assessments, penalties and reputation damage. And it can all lead to customs audits where something as simple as a recordkeeping error could trigger a $10,000 fine. That’s something no small business wants to face.
The good news is, with preparation and planning, you can reduce your risk and make importing and exporting a source of bottom line savings and increased revenue.
Here are just a few proven business strategies that can protect you:
Develop formal import/export policies and standard operating procedures
This will ensure that no step is overlooked when importing or exporting. A good place to start is creating a customs manual specific to your operation; this document should contain an overview of your business, where you import from and export to, any customs programs you participate in (such as NAFTA) and outlines of your key internal processes (purchasing, receiving).
Establish compliant recordkeeping processes
Keeping your records in order will protect against audits; keep in mind that Customs can review your previous five years’ worth of import transactions, so keeping your records up to date and easily accessible is key. Ensure the location of your records is included in your customs manual.
Maintenance of records can be done in two ways. Electronic recordkeeping through imaging technology is acceptable as an alternative to hard copy files; alternatively, you can outsource your recordkeeping to a trade partner, such as your customs broker.
Regularly review your trade processes to ensure everything is current, including the classification of your goods or parts database, any required customs or government agency documentation, and your NAFTA Certificates of Origin.
This should be done on annual basis, but for small businesses that work with government agencies that have unique requirements (such as the Food and Drug Administration), a mid-year or quarterly review is also a good idea.
Even with these steps in mind, nothing helps to minimize risks like these better than expertise. Finding a customs broker to serve as your trade partner is the best way to mitigate risk and be prepared for any unforeseen event when importing or exporting.
As an NSBA Partner Livingston is here to help. Our educational webinar series is a great place to start; the Importing into the U.S. series is great for new importers looking to learn about the process, or for experienced importers to refresh and catch up on any new customs and trade regulations that may impact their business.
To watch now click here.
To learn more about how we can help you can reach new markets, how to import into the U.S. and export into Canada, and how to mitigate any international trade risks, visit Livingston by clicking here or call our Trade Advisors at: 1-844-655-6411. And remember, NSBA members get access to exclusive rates – as little as $35 per transaction – when partnering with Livingston for customs clearance.
* This article was contributed by Ilsie Berlanga, Director of Marketing, Small Business at Livingston International, an NSBA corporate partner