WHY ‘TRADE COMPLIANCE’ GOES BEYOND JUST DOING AS YOU’RE TOLD?

Defining Compliance

“Compliance” is “the action or fact of complying with a wish or command”.

In the trade environment, there’s a world of difference between ‘complying’ to the wishes or commands of officials and ‘compliance’ to the actual law.

The lack of understanding the difference between ‘complying’ and ‘compliance’ is a phenomenon that I have frequently observed. The fact that this difference is not always clarified and addressed, increases complexity in the trade environment.

Here’s why:

Let’s say that you take special care, in your trade engagements, to do whatever a specific government demands of you. You do as you’re told. Can you consider yourself as being compliant?

What if the government’s instructions, run counter to the legislation? What if the situation ‘on the ground’ requires different things; things that may diverge from the letter of the law? By doing what the government instructs you to do, are you then being compliant or are you complying?

Letter of the Law

I believe that, as an importer, a business or an economic operator, your obligation is to follow the letter of that country’s law.

What I’m saying, then, is that complying with what you are told is all very well and good in some situations, but it’s not enough.

True Trade Compliance, is not complying to what any official or government tells you to do. But, it is ensuring that you are at all time in compliance with all the laws and regulations of the countries involved in your trade transaction.

To trade, you need to be trade compliant.

Trade Compliance

How?

When trading in a specific market it is important that you consider all laws and regulations that apply to your trade transaction, i.e. local legislation, international legislation, trade agreements as well as the guidelines provided by the WCO and WTO.

Once you have considered all these elements, you then need to ensure that you are in compliance with them, when you engage.

But,

What if the local legislation is not easily accessible? Or, what if there are conflicts between the local legislation and the international guidelines?

In a future piece, I will unpack questions like these in more detail.