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  • 17 Feb 2020
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Trade Compliance

Table of Contents:

Why Trade Compliance is Important

Trade Compliance Key Areas

Customs Compliance and Paperwork

GeTS Trade Compliance Solutions

Trade compliance is critical to any global business. Compliance to international trade regulations means faster cargo clearance, more predictable costs, savings on duties, taxes and other fees, lower risk of inspections and delays, reduced oversight and increased competitiveness.


Regulations are constantly changing around the world, and organizations are expected not only to keep abreast with the changes but ensure compliance each time a new rule is introduced. This means updating processes, investing in new technology or upgrading legacy systems, buying new equipment, and training or re-training employees.


Keeping up to date with trade regulations can be very expensive especially for small and midsize businesses. Even multinationals and established businesses look outside the organization to close trade compliance gaps and access resources. Service providers like Global eTrade Services (GeTS) offer many solutions to help the trading community meet customs compliance requirements.



Why Trade Compliance is Important

Why Trade Compliance is Important

Importers and exporters must understand rules governing trade in areas where they operate or do business. The United States and Canada have laws and compliance regulations that extend beyond their nations’ borders. These far-reaching laws impact every other country engaged in trade with the U.S. and Canada. Conversely, North American companies must ensure compliance with regional and local rules elsewhere in the world.


Trade compliance refers to the process of satisfying official requirements of various customs agencies in order to facilitate the movement of goods across borders. Providing evidence and supporting documents to verify the accuracy of submitted information and formal examination of records and documents are also extensions of trade compliance.


Compliance, verification and audits support efforts to secure a nation’s interests while keeping trade flowing smoothly. These processes can be complicated and expensive, but successful businesses understand the need and implement appropriate controls in their operations.



Trade Compliance Key Areas


Goods Classification

Every product that enters or exits a country must be classified with the correct tariff classification code. The tariff classification must be accurate because it is used to calculate duties, taxes and other fees. Incorrect HS classification is an expensive error as it leads to other errors in the cargo clearance processing chain. It affects import and export controls and can lead to heavy fines and delays at the border.


The Harmonized System of Tariff Classification was created by the World Customs Organization to serve as a multipurpose classification system used as the basis for customs tariffs and trade statistics. The system is regularly updated to incorporate new products and clarify existing definitions and wording.


Air Waybill

Trade Compliance: Air Waybill

The electronic air waybill (e-AWB) is a digital version of a paper air waybill, one of the most critical documents in the air cargo industry. The e-AWB serves as the contract of carriage between the shipper or freight forwarder and the carrier or airline. Replacing paper with electronic air waybills greatly streamlines the air cargo process for industry participants.


Developed in 2008, the eAWB initiative was adopted by the IATA Cargo Services Conference in 2009 as a recommended practice and endorsed by the International Federation of Freight Forwarders Associations (FIATA). The e-AWB initiative is part of the larger e-Freight program that aims to build an end-to-end paperless transportation process for air cargo through regulatory frameworks, modern electronic messages and high-quality data.


Many carriers, forwarders and governments around the world have implemented the e-AWB initiative, but there’s still a long way to go before full adoption. As of October 2018, e-AWB penetration is at 54.2 percent. Slow adoption among forwarders is mainly due to technical constraints. Businesses need EDI systems to transmit data to airlines and they need to update legacy systems.


Despite slow adoption, the e-AWB is now mandatory for most carriers, with some airlines imposing fees for the use of paper instead of electronic air waybills. Many forwarders and air cargo participants are looking to third party providers to meet requirements comply with e-AWB and e-freight initiatives.



Rules of Origin and Trade Agreements

Certificates of origin and applicable trade agreements must accompany certain goods for import or export. Free trade agreements like the North American free Trade Agreement (NAFTA) allow some goods to enter a country free of duty. This requires specific rules of origin to determine whether the goods meet the requirements.


For businesses, trade agreements can mean significant savings through reduced duty or duty-free entry. Importers or their customs brokers must understand the specific rules of origin for each agreement and comply with rules to take full advantage of these benefits.



Regulated Goods and Permits

Trade Compliance: Regulated Goods and Permits

A necessary part of the trade compliance process is the application for a customs permit for regulated or restricted goods. The importer or their broker are usually responsible for filing the paperwork with the controlling agency. Permit application is now electronic in many countries, simplifying the submission of information and increasing processing speed.


In Singapore, for example, importers use TradeNet (Single Window for trade declaration) for e-permit application. In the U.S., food and feed imports require an advance prior notice sent to the Food & Drug Administration (FDA) under the U.S. Food Safety Modernization Act (FSMA). The FSMA aims to improve America’s food supply while increasing safety by requiring importers to submit advanced documentation and prior notices. This allows the FDA to assume a proactive rather than reactive role in preventing food safety issues.



Customs Compliance and Paperwork

Trade compliance involves a ton of paperwork, but digitization has greatly improved processing time and speed and allowed trade participants to clear their cargo more efficiently. Each supply chain participant has a role to play in compliance, but the main actors are importers/exporters, their representatives (customs brokers), transport carriers, and freight forwarders.


Cargo data accumulates and changes as the shipment travels from the origin to the destination. Customs agencies require the latest cargo data from importers, carriers and forwarders so authorities can determine admissibility and assess duties and other fees. In many cases, cargo data must be submitted to customs authorities and relevant agencies in advance of the actual arrival of the goods. Advance submission of cargo data leads to better risk assessment and faster processing.


Importers or their brokers are required to submit entry (cargo data, including classification codes, prior notices and applicable permits and certificates) and entry summary (accounting) documentation, while carriers and freight forwarders are required to submit advance electronic manifests, stowage plans and supplementary cargo reports. This applies to all modes of transport, although specific data requirements may differ.


GeTS Trade Compliance Solutions

GeTS Trade Compliance Solutions

Global eTrade Services (GeTS) is your partner in trade compliance. GeTS is a leading provider of trade facilitation solutions that aim to make cross-border trade more accessible, predictable and easier to fulfill.


GeTS offers trade compliance services for:

  • USA (eManifest, Automated Broker Interface, ACE In-Bond, Automated Export System, FDA Prior Notice, Importer Security Filing, eCommerce Managed Services)
  • Canada (IID/CADEX, eManifest, Release Notification System, eHBL)
  • Mexico (eManifest)
  • Panama (eDeclaration)
  • Japan (Advanced Filing Rules)
  • Singapore (Electronic Certificate of Origin, Trade Permit Preparation, Customs Lot Movement, Brokerage Control Tower, TradeWeb Live)


GeTS also provides e-AWB and HS code classification solutions based on the software-as-a-service model, as well as direct filing of trade declaration in behalf of clients. GeTS software can be used as a standalone program or integrated into existing systems.


To learn more, visit our trade compliance page or contact us today!



Related Pages:

Cross Border Compliance Services

Customs Compliance

Cross Border Services

Streamline Your FDA Compliance with GeTS

GeTS FDA Prior Notice

FDA Prior Notice

eCommerce Compliance

The Future of e-Commerce: Global e-Commerce Trends in 2019 and Beyond

What Is Section 321(CBP Shipment Type)?

ACE (Automated Commercial Environment)

Benefits that Enterprises Gain from Automated Commercial Environment US

Benefits of Using ACE US

What is SW - Single Window US?

Benefits of Using USA Single Window

ACE Highway



ACE Ocean

ISF “10+2”

Truck Section 321 eManifest Requirements from U.S. CBP






Contact GeTS today for more information on trade compliance solutions!



GeTS eTrade (Canada) Inc.

100 York Boulevard Suite 260
Richmond Hill
Ontario, Canada L4B 1J8

North America toll-free
+ 1-877-763-6887
Local North America
+ 1-905-763-6887
Fax: 1-905-763-2321




Global eTrade Services, Inc.(U.S.)

19800 MacArthur Blvd. Suite 300
Irvine, California, U.S.A.

North America toll-free
+ 1-877-763-6887, (Sales, Support, Billing)
Local North America
+ 1-905-763-6887 (Sales, Support, Billing)
Fax: 1-905-763-2321