21 September, 2024
The importance of foreign trade in today's economies is undeniable. Export and import processes directly impact not only a company's operational scale but also its competitive strength and profitability. The effective management of these processes largely depends on mastery of customs regulations. But to what extent is such mastery necessary? How knowledgeable should foreign trade departments be in this area?
Nowadays, most companies would respond to this question with, "Yes, foreign trade departments need to be very well-versed in customs regulations." This would, of course, be the ideal scenario. However, when we look at the reality, customs regulations are highly complex and subject to rapid change. There are numerous details, from the amount of tax levied on each product to issues like various exemptions and special statuses. Moreover, when considering the unique regulatory structures of each country, this complexity grows exponentially for companies engaged in global trade.
The limited number of specialists: A realistic approach
While it may indeed be possible for foreign trade departments to grasp this complex structure in depth, the number of employees specializing in customs regulations is undeniably limited. Establishing this level of expertise in every company doesn’t seem feasible in the short term. So, what should we expect from foreign trade departments?
At this point, we need to adopt a realistic perspective. It’s not expected that foreign trade teams master all the details of the regulations but rather that they manage risks effectively. The biggest risk in customs processes stems from costs due to non-compliance with regulations or incorrect procedures. Incorrect or incomplete information can lead to delays, penalties, and consequently, increased operational costs for the company. Proper risk management minimizes these errors and protects the company from such negative outcomes.
Tracking opportunities in customs regulations
Another key expectation is that foreign trade departments should be able to identify opportunities within customs regulations. Special statuses, incentives, and exemptions that accelerate customs procedures and reduce costs can often be turned into an advantage with the right knowledge and strategy. For example, benefiting from free zones, temporary import practices, or deferred customs duties are regulatory opportunities that both speed up processes and provide significant cost advantages.
Identifying and implementing these opportunities correctly requires not only knowledge of regulations but also strategic thinking. Foreign trade teams should always have the infrastructure to capitalize on such opportunities. Because it’s not just about fulfilling the obligations of the regulations; making use of the opportunities they present is one of the most critical factors in increasing a company’s competitiveness.
Conclusion: A risk and opportunity-focused approach
It may not be feasible for every company to have customs regulation experts in their foreign trade departments in the short term. However, this doesn’t mean that companies should be weak in the area of regulations. Developing an informed approach to customs risk management and opportunity tracking should be the primary goal of foreign trade departments. These two areas ensure both security and efficiency in the company’s operational processes.
In short, while having a foreign trade team fully knowledgeable in customs regulations is ideal, even in cases where this ideal is not met, it is still possible to adopt a strategic approach. Achieving a competitive advantage by minimizing risks in customs processes and fully leveraging the advantages provided by regulations can be a goal attainable by any company.