Software benefits
The ROI of export controls and compliance software
Business leaders typically focus on increasing productivity, lowering costs, and winning clients. So what is the benefit and ROI of export controls compliance software?
20.01.2021
Export controls and ICP: Why it's worth it
To many, it seems like export controls and trade compliance do not inherently add value to a service or product – and they therefore regard it as a burden. After all, compliance can’t really be considered a revenue-generating portion of the company.
Those that fail to implement effective export controls and compliance programs, though, risk jeopardizing their business operations and reputations. Based on this alone, investing in compliance with export controls already makes good business sense. But there is even greater potential to be tapped: Companies that additionally introduce software into their internal compliance programs (ICP) also benefit from greater efficiency, reduced costs, and – importantly – increased regulatory compliance.
Any internal compliance program (ICP) today must be configured to cater for changing policies, legislation, technologies, and so on. It must be robust and adaptable enough to deal with uncertainty and unpredictability. You can read more about what constitutes an effective ICP in this article.
Export control software: Benefits of compliance automation
Considering
the volume, complexity, and frequent changes of regulations in export controls across the globe, it’s virtually impossible to establish successful compliance programs
without IT support. Software solutions reduce reliance on manual processes and
therefore support companies to:
- Decrease costs
- Increase efficiency
- Minimize errors
- Standardize procedures
- Increase regulatory compliance
- Improve recordkeeping and the level
of information available to auditors
The best systems enable you to comply with all relevant regulations, mitigate supply chain risks, increase efficiency, and demonstrate due diligence to regulatory authorities. The next section details some of the key aspects that you should be looking for in an effective trade compliance solution.
What export control and compliance software must have
Integration with ERP systems
Export control compliance should be part of standard business processes and not a separate activity. Software can support real-time, automated checks for export license requirements, restricted-parties, and more, directly in your ERP.
Restricted-party screening
Screening all your business partner names and addresses against the sanctions lists of the UN, EU, US, and other authorities is simply not practical as a manual activity. Software can fully automate the process in real-time or as a batch run.
Product classification
The kind of automation commonplace for many other aspects of global trade and logistics is now also available to support the product classification process. Software can support correct identification of the customs commodity codes and/or dual-use codes.
License determination
Software can help you answer key questions about your shipment: Are there any embargoes in place for the country I want to ship to? Do I require a license to ship my goods? It should also block goods shipment if a license hasn’t been obtained yet.
Data update service
Automated data updates ensure that you are always checking against the most up-to-date version of the sanctions lists and export control regulations.
License management
Automatically identify which license might be applicable for the shipment; and, produce a full audit trail of which licenses have been used for which shipment including decrements on value and quantity.
Compliance software return on investment (ROI)
Implementing
an effective export control compliance program that is robust enough to cope
with current challenges and is flexible enough to facilitate future
requirements is of utmost importance in protecting your business operations and
reputation. This requires investment. And to get investment, business leaders typically need to present the ROI.
But a return on this type of investment is hard to measure. A robust compliance program is perhaps more comparable to having a good insurance policy in place. No reputable business would trade without insurance for professional liability, property, and vehicles. Similarly, no reputable business should trade without taking measures to ensure efficient export controls and overall regulatory compliance. Here are four good reasons why that can support your software business case:
1. Protecting brand image
Companies often spend significant amounts of money, time, and resources to develop their brand image. Integrity, trustworthiness, reliability, and transparency often form key elements of this. Unfortunately, however, it’s easy to lose a good brand image in a very short time if the right protective measures are not taken.2. Avoiding penalties
Prevention is better than cure, as they say. Criminal fines, administrative penalties, and costs associated with defending against enforcement actions can impose a massive burden on a company’s finances. Effective export control compliance programs are the best way to avoid such penalties in your company.3. Penalty mitigation
It’s far better to detect potential problems and violations before the enforcement authorities do so. If things do go wrong, your company can make a voluntary self-disclosure (VSD) of any issues. Typically, this will lead to a government warning letter or significantly reduced penalties.4. Shareholder value
Damage to brand image and significant financial penalties can have a very direct impact on the shareholder value of the company. It is extremely important, therefore, to ensure that an effective export control compliance program is in place to avoid such financial impacts.End-to-end trade compliance with AEB
AEB's export control solutions deliver comprehensive security for your business with always available and up-to-date software for Compliance Screening, License Management, Export Controls, and Risk Assessment. In the cloud and integrated in systems such as SAP®, Salesforce, or Microsoft Dynamics 365.Similar content
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