The International Trade Blog Export Compliance
5 Excuses Exporters Should Avoid
On: May 1, 2023 | By: David Noah | 5 min. read
If the last few years have taught us anything, it has taught us that even when our lives and our businesses appear to be running smoothly, they can be dramatically disrupted.
While we can probably be forgiven for not anticipating a black swan event like a global pandemic, organizations that have a business disruption or disaster recovery plan in place are often better prepared to respond to heretofore unthinkable problems like implementing new safety protocols, managing supply chain disruptions, monitoring and complying with ever-changing import and export compliance restrictions.
On the opposite end of the preparedness spectrum are organizations that choose to ignore potential problems that they should be aware of. Instead their leaders make excuses why the challenges that negatively impact other businesses in their industry won't be a problem for their own company.
I hear this all the time from companies that export. They have a million excuses why the challenges that must be faced by other exporters won't negatively impact them. Instead they're caught dangerously off guard when the "impossible" comes true.
So when it comes time to review and address potential export-related issues, please make sure to avoid these five excuses at all costs:
1. “My business is too small to matter.”
Whether you’re a first-time exporter, a single-person shop, or a multinational corporation, it’s your responsibility to keep your company compliant with export and trade laws. A word to the wise: enforcement agencies won’t give you a break on misclassification because you’re not a major exporting company.
What’s the risk of believing your business is too small to be noticed for violations? Customs authorities will question certification by employees who are neither knowledgeable nor authorized to represent the exporter. The person signing the certificate risks both civil and criminal penalties for any misclassifications or errors.
2. “It’s close enough.”
Whether you’re referring to Schedule B codes, Export Commodity Control Number (ECCN) classifications, international product cost structures, or export documents that require precision, there’s no such thing as close enough. Either you’re doing it the right way, or you’re doing it the wrong way.
The idea of close-enough classification is just one symptom of unhealthy business practices. While doing a job half-heartedly in this area is most often due to the belief that mediocrity is OK (laziness), sometimes a lack of product knowledge can have you muttering “it’s close enough.”
Failing to dig deep enough won’t just cost you in terms of your reputation. You could face fines and penalties from the government; storage fees at the ports where your (incorrectly classified) goods sit; and, most importantly, you won’t get paid for an undelivered shipment!
Monitoring and updating your goods as necessary takes an effort, but resources abound that make it easier than ever before to accurately and precisely classify items.
- The Census Bureau website includes a great Schedule B code search tool.
- Limited ECCN classification information is available on the BIS website. Shipping Solutions also offers a Product Classification Wizard that you can use to identify the correct ECCN or U.S. Munitions List (USML) classification.
- The Department of Commerce has Commercial Services offices through the United States that can provide assistance with regulations, markets, and Schedule B, and ECCN classifications.
- Countless webinars and seminars are available that explain the processes for compliance. Many of these are free, and the rest are offered at nominal cost; a fraction of what your penalties could be.
3. “My freight forwarder will take care of all of that for me.”
Your partnership with your freight forwarder is an important relationship that you should use to your benefit. But don’t let your forwarder’s expertise make you fall into the trap of using them as a crutch. Your forwarder could have thousands of customers, and they don’t know your business the way you do.
Relying on your freight forwarder to take care of all of your documentation and paperwork instead of partnering with them to provide the information in a clean, streamlined form is a disservice to both of you. Remember, “You can outsource responsibility, but you can’t outsource liability.”
4. “I don't need any help.”
Conversely, don’t fall into the trap of thinking you can do everything from soup to nuts by yourself. Not only will you waste a significant amount of time trying to reinvent the wheel, you could make costly mistakes that you may not catch until it’s too late—and your shipment is delayed in customs.
If you want control over the process but don’t want to risk accuracy, Shipping Solutions software can help. Instead of copying the same information over and over again on every document, you only need to enter information once and the software inserts it in the proper place and with the proper format on each export form. That makes you less likely to make costly mistakes and helps to ensure you get paid quickly, so you can continue doing the work you’re great at. Interested in finding out more?
5. “That’s the way we’ve always done it.”
Perhaps one of the most detrimental phrases companies use—and believe—is this one. International shipping is a constantly changing landscape, where regulations, customs, Schedule B, and harmonized tariff information (to name only a few) change regularly. Just because a business has always done something a certain way doesn’t mean it’s the most effective or easiest method today.
We see this frequently with new users to our software who are alarmed when they don’t find a form they’ve been habitually filling out. They nervously come to us, believing they’re missing something, and we’re happy to explain to them that the form they believed they needed was actually just unnecessary extra work.
Our experts continually monitor changes in international trade law and legislation to ensure our more than 3,000 customers have all of the paperwork they need (and none they don’t), so they can save time and money.
Don’t limit your capacity by falling into the commonly believed misperception that the way you’ve always done it is the best way—especially when it comes to exporting.
This article was first published in June 2014 and has been updated to include current information, links and formatting.
About the Author: David Noah
David Noah is the founder and president of Shipping Solutions, a software company that develops and sells export documentation and compliance software targeted at U.S. companies that export. David is a frequent speaker on export documentation and compliance issues and has published several articles on the topic.