In fast moving businesses it is not always easy to communicate internally details of all import and export transactions. An export sale may be negotiated which has ‘hidden’ consequences for the business in meeting trade compliance requirements.
Examples of where internal communication is vital can be seen in the following:
- A UK exporter negotiates an export sale with a country that the European Union maintains a preferential trade agreement with; the sales price is based on zero tariffs under the trade agreement when goods enter the overseas country. What however if the exporting business is unable to meet the origin threshold negotiated in the trade agreement?
- An urgent export order is negotiated for immediate export delivery overseas, for a controlled good. As this is the first time that the company has traded outside of the European Union they are unaware of the need for an Open General Export License, and unaware of the timescales involved.
These are but two examples, there are more. What they do show is the importance of internal communication and the importance of knowledge of trade procedures, ideally throughout the company.
The current impacts from Coronavirus if anything increase the importance of communication, for example in the event of;
|Changing suppliers||Selling to new customer and countries who have an urgent demand for your product||Using different materials and component parts in the production process|
This has many impacts, to mention just a few possibilities
- End use
- Export controls
- Rules of Origin
- Commodity codes
- Tariff rates
- New trade routes to book with the freight forwarder
- Incoterms applicable
As noted above communication is key, internally as well as externally
We would welcome your thoughts on other areas that a business should discuss and agree during internal communications.