Disregarding Trade Compliance is Risky Business
By Business Wire News
By Business Wire News
EAST RUTHERFORD, N.J.
Multinational companies are not investing in their employees’ trade compliance training, even though organizations and individuals that fail to comply with trade regulations face substantial penalties, according to survey results released today from leading global trade management solutions provider Amber Road (NYSE:AMBR) and its Global Trade Academy.
The survey of 300 U.S.-based global companies across a range of revenues and industries found that 56 percent of executives at the companies surveyed are not investing in trade compliance training, even though 28 percent of those companies had already been fined or warned by government agencies for noncompliance.
And while the vast majority (73 percent) have a stated trade compliance plan, 46 percent of surveyed companies didn’t require any training for employees and 28 percent require less than 11 hours of training – leaving a gap between having a plan and the ability to act on it. Furthermore, 55 percent had not standardized their global compliance training and 33 percent do not have a budget for trade compliance training, which opens the door to noncompliance risks as a result of untrained staff.
These risks can be significant. For example, violations of the Export Administration Regulations (EAR) can reach 20 years imprisonment and $1 million per violation. Administrative monetary penalties can reach $11,000 per violation, and $120,000 per violation in cases involving items controlled for national security reasons.
Conversely, the companies that are aware of the need for trade compliance training and understand its value to their organizations are reaping significant returns.
“Our company has always focused on continuing education opportunities related to trade as we recognize the rapidly changing trade environment,” said Joan Kelly, export compliance manager, Curt Manufacturing. “As a direct result of my training at Amber Road’s Global Trade Academy, we have been able to review differences in classification for our imports and exports resulting in risk mitigation, less internal contention, and the ability to speak with confidence with our vendors and customers. The return on investment far exceeds the cost of these courses.”
Lack of awareness about the benefits of trade compliance is causing many companies to leave money on the table. Many organizations are not taking advantage of preferential trade programs, including duty drawback, free trade agreements (FTAs), and free trade zones, yet companies with trained staff that can take advantage of these programs can save millions of dollars. Currently, the United States has 14 FTAs in force with 20 countries, not including the newly signed Trans-Pacific Partnership Act.
“The benefits of globalization can only be achieved by complying with trade regulations and fully understanding how available trade programs can be implemented. Providing trade compliance training to employees is key to an international company’s success, and that starts with raising awareness in the boardroom,” said Suzanne Richer, trade advisory practice director at Amber Road’s Global Trade Academy.
To download a complimentary copy of the ‘2016 Trade Compliance Training Survey’ report published by Amber Road’s Global Trade Academy, click here.
About Amber Road
Amber Road’s (NYSE:AMBR) mission is to improve the way companies manage their international supply chains and conduct global trade. As a leading provider of cloud based global trade management (GTM) solutions, we automate the global supply chain across sourcing, logistics, cross-border trade, and regulatory compliance activities to dramatically improve operating efficiencies and financial performance. This includes collaborating with suppliers on development, sourcing and quality assurance; executing import and export compliance checks and generating international shipping documentation; booking international carriers and tracking goods as they move around the world; and minimizing the associated duties through preferential trade agreements and foreign trade zones. Our solution combines enterprise-class software, trade content sourced from government agencies and transportation providers in 145 countries, and a global supply chain network connecting our customers with their trading partners, including suppliers, testing/auditing firms, freight forwarders, customs brokers and transportation carriers. We deliver our GTM solution using a Software-as-a-Service (SaaS) model and leverage a highly flexible technology framework to quickly and efficiently meet our customers’ unique requirements around the world.
Annika Helmrich (US & Canada)
Martijn van Gils (Europe & Asia)