Ways to Achieve Compliance with Trade Agreements and Regulations in European Logistics
April 20, 2023
With multiple laws, regulations, and international trade agreements, the European logistics industry is highly regulated, meaning that certain certifications, insurance coverage, and shipping documents are required to move goods across borders. Compliance is key to avoiding reputational risks, delivery delays, and penalties. At the same time, compliance can help freight forwarders gain a competitive edge and enhance customer satisfaction. Understandably, IFA members are increasingly leveraging trade agreements by staying updated, implementing robust programs, building relationships with customs authorities, and using automation.
Staying up-to-date with changes in regulations involves monitoring trade restrictions, sanctions, export controls, and customs laws. European logistics companies must stay updated with such changes at the national, regional, and global levels by collecting and analyzing relevant information and disseminating it to stakeholders and partners. There are different ways for freight forwarders to ensure they stay updated, like engaging with customs officials for guidance, joining industry associations, and subscribing for regulatory updates.
Implement Compliance Programs
Logistics businesses must develop compliance programs, including written guidelines, procedures, and policies that ensure adherence to trade regulations. Having a comprehensive compliance program in place means covering aspects like reporting, screening of transactions and parties, record-keeping, and documentation. Additionally, freight forwarders must conduct regular risk assessments and audits to ensure compliance.
Build Relationships with Customs Authorities
Building relationships with the customs authorities is about establishing open lines of communication to ensure smooth clearance. This can include seminars, workshops, or meetings organized by the customs authorities to become familiar with changes in procedures and regulations and best practices. Joining events allows freight forwarders to seek guidance and clarification on regulatory requirements.
Also, to establish a reputation of being law-abiding and reliable logistics companies must ensure timely submission of forms and declarations, proper valuation and classification of cargo, and adherence to export and import regulations and restrictions. Compliance with customs laws helps build trust and strong relationships.
Invest in Automation and Technology
Investing in automation can help improve document management, which is key to complying with trade regulations. Automated systems can create standardized, accurate documents such as packing lists, commercial invoices, and bills of lading. Also, technology can help forwarders to maintain proper audit trails, document retention, and record-keeping, all of which ensure compliance with custom investigations and audits.
Additionally, automated systems can help freight forwarders to streamline monitoring and reporting, which are crucial for complying with restricted party lists, embargoes, and sanctions. Technology can be used to screen vendors, customers, and cargo against various sources, including internal watchlists, denied party screening lists, trade compliance lists, and government databases. Screening against authoritative sources enables logistics companies to identify potential compliance risks. Lastly, technology can generate real-time alerts and reports to help forwarders mitigate risks. For instance, automated systems can send alerts when shipments involve partners, vendors, or customers included in an internal list due to non-compliance with the company’s policies. Alerts can also be triggered in case of changes in regulations such as updates to embargoed countries or sanctioned parties.