LIVING LOGISTICS BLOG

    Trade Compliance: Key factor of the cross-border e-commerce

    Jul 10, 2020 9:00:00 AM / by Jessica Zhu

    In recent days, cross-border e-commerce has become the new hot-spot of the Asia-Pacific economic growth.  In my experience with the business development process in China, the trade compliance of cross-border e-commerce is quickly becoming essential, but it has also become more difficult to develop.

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    International import and export trade compliance management is different from general trade operations. Its purpose is to establish a set of trade compliance mechanisms and processes for which is required not only knowing our internal procedures in the company but also, comprehensively grasping the import and export regulatory policies of China and overseas countries.

    For this, it is recommended to know and understand the trade compliance scope.

    Trade compliance key scope:

    1. Customs tariff management and quarantine supervision in different oversea countries
    2. International intellectual property protection
    3. Tax payment adjusted to the laws in place, this may include tariffs, value-added and consumption taxes to name a few
    4. The compliance of International Trade capital settlement

    With a wider idea of trade compliance and cross-border e-commerce, we can identify and set mechanisms and processes to facilitate the execution in our enterprises.

    We could list at least 5 key points to help the enterprises to set up their trade compliance mechanisms in cross-border e-commerce:

    • Establish the principle of Trade compliance in the enterprise Compliance will gradually become the first principle of cross-border e-commerce 
    • Design compliance mechanisms based on cross-border e-commerce trade businesses

    The cross-border e-commerce enterprises should analyze the characteristics of cross-border e-commerce trade and summarize the risk categories to formulate the compliance mechanisms in order to prevent and minimize the risks.

    • Establish a cross-border e-commerce platform or compliance organization structure

    Trade Compliance involves many complex activities which are close related to other areas in the company, such as customs, logistics, legal affairs, finances, procurement, sales or even the warehouse, making necessary to combine the operational process, professional knowhow and the access to the information, to create a solid compliance structure in the company.

    • Set up logical trade compliance documents

    Keep the content of compliance documents updated according to the changes of the Customs and tax policies.

    • Record and trainings

    Keep a clean and organized trade compliance document management and stay updated by taking trainings trade compliance related.

     It is highly recommended to pay special attention to custom compliance, as it works as an "umbrella"for enterprises engaged in cross-border e-commerce business,

    Only with good management and control of trade compliance, the companies can go further and faster in the cross-border e-commerce trade.

    GEODIS SCO has years of experience leading trade compliance projects for clients from various industries. This is just one of the several Strategic Outsourcing services that the company has to offer.

     

    If you need any advisory, contact us. We will help you to KEEP RISING.

     

    This blog post was edited by Ana Rosa Arana - anarosa.arana@geodis.com

    Topics: Trade Compliance, APAC, e-commerce

    Jessica Zhu

    Written by Jessica Zhu

    Jessica Zhu is the AP Business Development Focal and GCG Business Development Manager at GEODIS for the Supply Chain Optimization line of business. Before joining GEODIS in 2015, she worked in logistics & marketing for different manufacturing, Global logistics, and e-commerce companies. She has a very comprehensive understanding of supply chain, logistics, local markets and project management in international transportation, DG cargo transportation and end-to-end logistics fulfillment projects. With the understanding of the Asia logistics market and experience in supply chain in the High-Tech, Industrial and e-commerce industries Jessica specializes in logistics advisory, solution design, project management, supply chain optimization and the 4PL/LLP model to deliver positive outcomes to customers.