Customs Compliance 2024: Mitigating risk irrespective of how the world is changing

Compliance with unfamiliar legislation, new tariffs and regulatory changes is complex, time-consuming and fraught with risk. Take a few minutes to evaluate your business’s current compliance process against the following model of good, better, best and get a sense of how resilient your business is.

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With pivotal events on the horizon and the ever-present chance of the unexpected, here's how businesses can guard against financial and reputation loss.

Events influencing customs compliance in 2024

Canada's Anti-Forced Labor Legislation (psst ... it's not just for Canadians)

Penalties of $250,000 per offence

Reputation damage

Customs audits on the rise

Audits can result in:

Time-consuming preparation

Financial penalties

Duty adjustments

Process inefficiency

External factors can disrupt your business and your bottom line. To offset this, you’re reducing headcount, cutting corners and looking for ways to save cash. Sound familiar?

Efficient customs compliance processes increase an importer’s visibility into what’s happening around them. This impacts the agility of strategic decision making, and can mitigate risk and retain valuable cash for other things.

Critical consideration

Failure to file by May 31 could result in:

Optimizing customs compliance

Good

Canadian businesses should be preparing now for the May 31 deadline and should consider consulting with trade advisors to ensure they’ve properly complied with the new legislation.

Critical consideration

Business decision makers often overlook changes in trade policies, processes and practices. It makes sense. You’ve got a lot going on. But those small and usually unexpected shifts can cause massive disruption to your operations and P&L. Knowing what’s on the horizon lets you put the unexpected on your radar. So what’s in the cards for the coming months, and what does it mean for you?

Business should strive to be prepared for customs audit with strong data hygiene and record keeping that fosters consistent customs compliance. This dramatically reduces administrative burden in the event of an audit and leave a business well-prepared for the unexpected.

Critical consideration

Basic compliance:

Adhering to the fundamental rules and regulations governing international trade, and basic compliance with trade sanctions. Why it matters: Getting the basics right means no surprises, no delays at the border, no unnecessary duty spend, and happy customers.

Accurate documents:

Ensuring that all required documentation, such as invoices, packing lists, and certificates of origin, is accurate and complete. Why it matters: Unforeseen issues with incorrect paperwork can result in costly penalties for you and delays for your customers.

Awareness:

Making efforts to stay informed about key regulations, changes in laws and trade agreements. Why it matters: Knowing what’s up ahead means you can plan and adapt your business to take account of external changes.

Better

Risk management:

Conducting risk assessments, identifying potential compliance risks, and implementing measures to mitigate those risks. Why it matters: Legal issues can arise from violating regulations or laws, resulting in fines, legal action, or reputational damage.

Technology integration:

Using technology solutions, such as trade compliance software and automation tools, to enhance accuracy, efficiency, and visibility. Why it matters: Technology can help you avoid human error, comply with regulations, minimize risks and be agile enough to adapt to market changes more rapidly than your competitors.

Employee training:

Investing in staff training programs to ensure a good understanding of relevant regulations and compliance procedures. Why it matters: Investing in staff training programs is an investment in the company's stability, growth, and long-term success.

Best

Strategic compliance management:

Knowing how to align your compliance efforts with overall business strategies, integrating compliance considerations into supply chain and logistics decisions. Why it matters: It’s not just about avoiding penalties. It’s also ensuring your business is operating ethically, protecting your reputation and brand, and reducing risk.

Continuous monitoring and auditing:

Continually monitoring trade activities and regular internal audits to identify and address compliance gaps and provide insights for continuous improvement. Why it matters: Stay up to date with changing compliance rules and how your business is adhering to them. You’ll minimize risks, enhance operational efficiency, and maintain a positive reputation in an increasingly regulated business environment.

Global trade expertise:

Partnering with international trade experts to navigate global trade complexity and seize opportunities while mitigating risks. Why it matters: Expert partners are valuable allies to help minimize risks and maximize opportunities. Demonstrating your commitment to compliance helps build trust among stakeholders and investors.

Loss of customers

Companies listed on a Canadian stock exchange.

$20M

in assets

250

employees

Be audit-ready with:

That’s how much annual revenue you could be losing through inefficient processes. Or put another way. That’s how much annual revenue you stand to keep, if you make your processes as efficient as possible.

Canada's anti-forced labor legislation (psst ... it's not just for Canadians)

Canadian businesses should be preparing now for the May 31 deadline and should consider consulting with trade advisors to ensure they’ve properly complied with the new legislation.

Critical consideration

Canada’s new anti-forced labour legislation (aka Bill S-211) requires businesses to file an annual public report on how they identify and prevent forced and child labour in their supply chains.

Jan. 1., 2024 Bill S-211 comes into effect.

May 31, 2024 Mandatory report deadline.

Who's Impacted?

Canadian business meeting two of these three criteria?

$40M

in revenue

Supply chain disruptions

$77.7M

collected by U.S. customs from importer audits in 2022.

85%

in fines over the last five years.

Anticipated increase in Canada customs audits following passing of Bill S-211.

27%

YOY increase in fines due to 21,000 more audits in Q4 2023 by Mexican customs.

How prepared will you be when Customs comes knocking?

As an importer, you’re ultimately responsible for any gaps or errors in your customs compliance process.

Diligent record keeping and up-to-date documentation

The right support team in place

Robust compliance processes

Rising inflation

Operational disruption due to geopolitical turmoil

Increasing trade regulation

Simple improvements to your supply chain processes could have double the impact.

By optimizing your internal processes and documentation you not only enhance efficiency, but also mitigate risks and create additional savings by avoiding fines and penalties, and recouping all possible duties and taxes. It's a win-win.

25%

Events influencing customs compliance in 2024

Canada’s new anti-forced labour legislation (aka Bill S-211) requires businesses to file an annual public report on how they identify and prevent forced and child labour in their supply chains.

Customs audits on the rise

$77.7M

collected by U.S. customs from importer audits in 2022.

85%

increase in fines over last five years.

Anticipated increase in Canada customs audits following passing of Bill S-211.

27%

YOY increase in fines due to 21,000 more audits in Q4 2023 by Mexican customs.

External factors can disrupt your business and your bottom line. To offset this, you’re reducing headcount, cutting corners and looking for ways to save cash. Sound familiar?

25%

Simple improvements to your supply chain processes could have double the impact.