Trade Compliance: Indispensable for international companies.

Trade Compliance: Indispensable for international companies.

For most internationally active companies, the topic of trade compliance has become indispensable. The export and import of goods and any services abroad may be subject to various government restrictions. Many companies face difficulty in behaving and acting by the law in foreign trade.

Current status of trade compliance

According to surveys and studies, the industries of our country are well-positioned compared to other countries. India is not only well positioned in terms of exports but also has a high level of legal and safety awareness. Most companies have a compliance organization and automated trade compliance management. Many companies are also planning to invest in trade compliance to fix weaknesses and automate other areas.

Compliance with trade compliance is essential for foreign business. Violations can result in not only fines and criminal penalties but also damage the company’s reputation and make future business impossible.

Nowadays, companies have the opportunity to introduce technical measures in the field of IT. These measures can simplify and standardize processes in foreign trade. This allows violations to be avoided and prevented. The programs should cover the following aspects:

  • Excise export control and
  • Classification in the import/export/sales tax customs tariff

Trade compliance is recognized as a management task in most international companies. The trigger for this is that foreign business often entails more risks for companies than domestic business.

Companies are often unsure which department of the company should deal with the topic of trade compliance. It is important that the Trade Compliance Team deals with the issue in detail and introduces a structured organization in the company.

Employees should be kept up to date and regularly informed about current events. In addition, a detailed error analysis should be prepared so that future violations can be prevented.

Trade Compliance Audit

A compliance audit is a comprehensive review to determine whether a company complies with specific legal requirements.

A trade compliance audit checks a company’s compliance with applicable trade control regulations. Various of the company’s export transactions are checked to determine whether all regulations have been complied with and whether each export has proceeded properly.

If the check reveals discrepancies, the affected processes can be checked. The results of all checks are then evaluated.

Internal Compliance Program– ICP

To be able to comply with the numerous legal requirements in foreign trade, operational export controls are essential. Companies should therefore set up a monitoring system to be able to comply with legal requirements. Those affected should ask themselves four key questions:


  • Where do we deliver?
  • To Whom do we deliver?
  • What do we deliver?
  • Why do we deliver?

An ICP must therefore be well organized: Competent employees should be hired who have the necessary specialist knowledge. In addition, a regular further training obligation, as well as a monitoring obligation of the company management, should be established.

This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.

Leave a Reply

Your email address will not be published. Required fields are marked *