Managing the Global Supply Chain: The Role of Global Trade Management (GTM) Solutions
If there's one thing that companies have learned from operating in an increasingly global business world, it's that centrally managing exports on an international basis is no easy task. Throw in the fact that the U.S. Department of Commerce develops, publishes, and regularly updates its restricted party lists - entities that are either denied export privileges or "unverifiable" - and the management task becomes even more daunting.
Ignoring these regulations can not only result in transportation delays as officials try to determine whether the shipments are indeed illegal, but they can also lead to governmental fines and penalties. Under the International Emergency Economic Powers (IEEPA) Enhancement Act, for example, civil penalties amounting to the greater of $250,000 (or twice the value of the transaction) may be imposed for each violation of IEEPA. For criminal violations, violators may be fined up to $1 million and face two years of imprisonment.
Managing Global Risk
To avoid export compliance issues and better manage their global operations, some companies have turned to Global Trade Management (GTM) solutions. Such systems go beyond manual and/or automated customs information databases and handle all the business processes associated with import, export, global logistics, and trade agreements. They also automate a variety of trade activities such as denied party screenings and embargo checks; assigning export and import licenses; creating and filing trade documents; and communicating electronically with customs authorities.
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