Trade compliance is often perceived as something bogged with rules, regulations and restrictions. But in today’s global landscape, that perception is evolving. With ever-changing regulations and supply chains under constant pressure, trade compliance has become a critical lever for business resilience and competitive advantage. Written in collaboration with our team of Trade and Customs experts at KPMG in Singapore, this article unpacks the frequently asked questions and misconceptions of trade compliance, and how organisations can shift both their mindsets and operational structures to stay ahead.
Compliance is essential to stay competitive.
Q: Isn’t trade compliance just paperwork that can be addressed later or handled only as required?
Trade compliance isn’t just paperwork; it’s the invisible scaffolding of international trade. Like a GPS, it guides businesses through the complex terrain of regulations, ensuring every shipment, customs declaration, and trade agreement arrives correctly and in a timely manner. Without it, companies are navigating blind, risking costly delays, fines, and even reputational damage. Getting compliance right isn’t optional; it’s essential for staying above board and competitive in the global trade arena.
Risk, strategy, and missed opportunities
Q: What happens when trade compliance is ignored?
Penalties, shipment delays, reputational damage are some of the key risks. But beyond these, there’s a missed opportunity. Done right, trade compliance can unlock duty savings, streamline operations, and even influence strategic decisions like supplier selection or market entry. It’s not just about avoiding trouble – it’s about gaining competitive advantage, staying relevant and keeping abreast within a fast-paced environment.
Complexity in every corner
Q: Regulations differ from country to country, and even within Asia Pacific, trade regulations and norms can vary to a degree. How does that affect businesses?
Imagine trying to play a board game where every country has its own rulebook. That’s trade in Asia Pacific. Singapore, for example, plays a unique role due to a combination of geographic, economic and policy-driven factors – it’s like the referee and coach rolled into one. It connects diverse economies and sets a gold standard with systems like Tradenet, which digitised customs processes way back in 1998.
The view from Singapore
Q: Singapore is often seen as a hub offering a panoramic perspective on global trade. What’s the benefit?
For many organisations, Singapore’s position as a trade hub grants a unique vantage point, offering a front row seat to global shifts affecting the business landscape. The concentration of global players in Singapore contributes to the vibrant ecosystem for market intelligence, enabling businesses to anticipate these trends, manage risks and seize opportunities in the region. However, it can be a double-edged sword. These changes often come fast, and smaller enterprises may find cross border trade compliance complex, or experience resource constraints when it comes to navigating these trade compliance issues and regulations.
The human factor
Q: So, who is responsible for making sure that all this works?
Ideally, a team of specialists working in tandem with all functions within an organisation. It takes a village to make this work. Chemists for chemical goods, engineers for electronics, R&D to provide product specifications, supply chain to align demand and planning, logistics to ensure all licenses and permits are in place, and so forth. However, in practice, many companies rely on one lone individual for trade compliance – and that individual often juggles multiple hats. In addition, trade compliance is typically tucked under logistics or finance, where its strategic value gets lost in the shuffle.
The education gap
Q: Why isn’t trade compliance taught more widely?
Unlike law or accounting, trade compliance lacks a universally recognised certification or accreditation framework. Designations such as “Certified Trade Compliance Professional” do not exist yet, and that’s a gap we need to close. As regulations evolve rapidly, the need to build capabilities and expertise in trade compliance becomes more apparent and will go a long way to help organisations of all stripes to not only ensure business continuity and manage risk, but to safeguard and build upon their economic competitiveness.
Building a better future
Q: What’s the way forward?
Businesses must reframe trade compliance as a strategic imperative, not a peripheral obligation. Whether through dedicated teams or external advisors, the goal is the same: to build resilient, agile operations that can weather regulatory storms. A mindset shift is key – trade compliance should be seen as a competitive edge, not a burden or mere red tape.
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