The whole system is costly, inefficient and unnecessarily bureaucratic, and needs to be fundamentally changed. Traders who can be trusted should be given the right to control their own trade compliance. So says a group of representatives from private, internationally trading companies and public stakeholders in the UK, known collectively as SAGE.
Chairman of SAGE, Mark Corby, said 'There is a growing number of trade compliance and facilitation managers from companies engaged in large scale international trade who are frustrated by the increasing costs and complexity of trade compliance requirements. The nature of our businesses and the world trading environment requires a totally new approach. That's what our group is all about ' opening up the debate to some radical new thinking that fundamentally changes the way we look at controlling international trade.'
The group believes it has struck on the solution: self regulation by those that can demonstrate rigorous monitoring, policing and control management systems; this combined with an emphasis on control data being sourced and accessible further upstream in the supply chain, before the goods are even loaded for export.
'The days of defining freight as either an import or an export are numbered' continued Mr Corby. 'An import should merely be seen as the end result of a prior export. We should instead be thinking more in terms of the start and end of a supply chain, and recognising that all the data about the freight and the parties involved in the supply chain is available somewhere in the system before anything gets shipped. If we can work out how to capture it, present it in the right format and provide the means of giving timely and authorised access to the different information and data on the freight, we might one day be able to completely discard all import and export declarations altogether.
'There is a whole raft of related 'issues that need to be addressed: simplifying VAT; pushing ahead with centralised clearance; incorporating trade compliance terms and conditions into contracts; simplifying the harmonised classification system of goods. But we must engage with government authorities and industry alike to change their mindset in order to move them away from the notion that international trade needs to be controlled like it was in the 18th and 19th centuries and still is today. Traders must gain the trust of authorities that they have the processes, the measures, the systems and rigorous auditing processes by independent and government authorised inspectors.' These inspectors should not only know about trade compliance but understand business and commercial processes too. The financial gains from such an approach would be massive for many companies and governments too that are already struggling to resource the control of international trade and the increased demands placed on them in the fight against organised crime and terrorism.
'Our paper 'International Trade Facilitation Proposals ' sage Vision Document 2011' explains further the basis of our proposals. We are not na've; we recognise we cannot simply remove over-night what we have today and start afresh with a new system. But we can make changes and we should begin with industry leaders, prepared to open their systems and processes to intimate scrutiny by the authorities in return for their total trust. Make no mistake, the commercial and legal consequences for breaking that trust will be severe. Give industry that trust, and the commercial rewards will be far too important for them to risk losing by cutting corners on compliance. But we must change this archaic system we have today in order to make the profound difference which is needed.'
