Understanding the complexities of international trade demands a thorough grasp of compliance, which has become increasingly urgent due to recent global developments. The year 2023 witnessed a significant escalation in sanctions, mainly targeting Russia, which dominated US headlines. This period saw the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) amassing over $1.5 billion in penalties, marking the largest haul in a single calendar year.

This surge in enforcement and the proliferation of novel sanctions complicated the efforts of Western businesses exiting the Russian market and potentially set the stage for a new generation of “smart” sanctions. These developments underscore the critical importance of sanctioned party list screening for businesses engaged in cross-border transactions.

Sanctioned party lists, maintained by government agencies and international organizations, are more crucial than ever. They identify individuals, companies, and entities restricted or prohibited from certain transactions due to security concerns or legal violations. In this era of heightened enforcement and complex sanctions, overlooking these lists can result in severe legal consequences and substantial business risks, including hefty fines and reputational damage.

Against this backdrop, OFAC’s escalating compliance expectations for multinational firms translate into increased enforcement risk and compliance costs, making integrating sanctioned party list screening into business processes a legal imperative and a strategic necessity for global trade.

Integrating Screening into Business Workflows

Effectively integrating sanctioned party list screening into business processes is not just a matter of regulatory adherence; it’s a strategic imperative that demands a seamless and dynamic approach. This integration goes beyond the traditional box-checking exercise many firms mistakenly equate with compliance. Instead, it requires robust systems capable of continuous monitoring and timely updating to reflect the latest changes in sanctioned party lists. Every transaction must be subjected to meticulous screening, ensuring no detail is overlooked, whether with a vendor, customer, or partner.

However, the challenge for many businesses is moving past superficial compliance measures, where employees are trained and made to attest to their understanding of the rules. The crux of the issue is the effectiveness of these compliance programs, which are often not assessed accurately or are evaluated using inadequate metrics.

The solution to this challenge is rooted in better measurement. Practical measurement tools are essential for companies to design and implement compliance programs that are compliant, efficient, and effective.

SAP Watch List Screening: Enhancing Compliance in International Trade

The SAP Watch List Screening application is a robust cloud-based solution that streamlines the compliance process in international trade. It facilitates rapid deployment and integrates seamlessly with SAP S/4HANA, automating critical compliance tasks and allowing businesses to focus on high-risk areas.

Best Practices for Effective Screening

Effective use of the SAP Watch List Screening application involves adhering to best practices:

  • Regular Updates: Keep screening data current with the latest sanctioned party lists.

  • Comprehensive Screenings: Thoroughly screen all business partners, including vendors and contractors.

  • Proactive Checks: Implement checks throughout sales and procurement to prevent delays and maintain compliance.

The Ropaar Advantage

Ropaar enhances the effectiveness of the SAP Watch List Screening application by offering a tailored, cloud-based solution that automates the entire screening process. This approach ensures up-to-date information, reducing supply chain disruptions and due diligence costs. Ropaar’s integration capabilities with SAP S/4HANA and other systems and commitment to providing customized support and training make them a valuable partner for businesses navigating the complexities of international trade compliance.

Take the Next Step in Compliance Excellence

Don’t let compliance complexities slow down your business. Partner with Ropaar for a tailored solution that fits your unique needs, backed by robust support and training.

Contact us today to learn more about the SAP Watch List Screening application and discover how Ropaar can help your business navigate the intricacies of international trade with confidence and compliance.

Forced labor in supply chains is not just a grave ethical issue; it’s a critical risk for your business. Are you fully equipped to identify and mitigate these risks in your operations?

This article explains how the Sanctioned Party List and Import Compliance functionalities of SAP Global Trade Services (GTS) can be your strategic tool in combating forced labor, ensuring compliance, and safeguarding your company’s integrity.

The Legislative Landscape and Its Implications

Recent changes in laws and regulations have significantly impacted global supply chains, placing a sharp focus on human rights and labor practices. The Uyghur Forced Labor Prevention Act (UFLPA) and the Countering America’s Adversaries Through Sanctions Act (CAATSA) are at the forefront. These directives target forced labor issues in international trade.

The UFLPA specifically addresses goods from the Xinjiang Uyghur Autonomous Region (XUAR) of China, known for forced labor concerns. This act prohibits the import of any goods from this region into the United States if they are suspected of being produced with forced labor.

CAATSA, on the other hand, is broader. It targets countries like Russia, Iran, and North Korea. It imposes sanctions for various reasons, including labor practices.

US Customs and Border Protection (CBP) manages the enforcement of these laws through Withhold Release Orders (WROs) and other actions. This means that businesses found to be violating these laws face serious consequences. These include the possibility of their goods being seized or excluded from the US market.

According to CBP statistics, 1,529 shipments were halted under the UFLPA in Fiscal Year (FY) 2022. Of these, 896 shipments, valued at more than $230 million, were rejected, and 53 still need to be solved or on hold. In FY 2023, the number of incidents increased, with 4,033 shipments stopped for UFLPA reasons. Out of these, 1,687 shipments, valued at more than $320 million, were denied entry, and 544 are pending resolution.

(Note: These figures represent current data and are subject to revision, as the status of ongoing or pending shipments could alter these totals in subsequent updates.)

Screening Parties: The Solution and the Dilemma

The challenge of preventing forced labor in supply chains, especially for companies with large or multi-layered networks, remains a daunting yet crucial task.

A 2021 Indago survey of supply chain executives underscored this difficulty. It revealed that 38% of respondents considered it “very/extremely difficult” to comply with regulations aimed at eliminating forced labor.

Such complexities arise not only from the vast number of parties involved. It also stems from how complex and opaque global supply chains are. Because of their intricacy, goods and services’ real source may be concealed. So, while effective screening is critical, implementing comprehensive and practical solutions remains a significant challenge.

SAP GTS: A Strategic Compliance Ally

SAP GTS is a practical solution for these challenges. Its Sanctioned Party List and Import Compliance functionalities are specifically designed to assist businesses in adhering to global trade laws, including regulations related to forced labor.

GTS Sanctioned Party List

SAP GTS’s Sanctioned Party List functionality screens and monitors the entities involved in a company’s supply chain against a comprehensive database of restricted or denied parties.

GTS data providers like Descartes provide databases that encompass critical sanctions compliance lists. These lists include the Uyghur Forced Labor Entity List from the Department of Homeland Security (DHS) and the End-User Requiring License – Entity List from the Bureau of Industry and Security (BIS). These denied party screening lists are regularly updated to reflect the latest regulations and sanctions, ensuring that businesses always comply with current laws.

SAP GTS Sanctioned Party List screens not only suppliers but also customers, freight forwarders, and other partners involved in the supply chain. This thorough screening ensures that your company does not inadvertently engage with entities that are associated with unethical practices such as forced labor. By automating this screening process, SAP GTS significantly reduces the risk of non-compliance and the associated legal repercussions.

GTS Import Compliance

One of the most challenging aspects of maintaining an ethical supply chain is identifying and mitigating risks in regions known for labor violations. GTS Import Compliance can play an important role here.

The GTS Import Compliance module is instrumental in managing and screening suppliers from regions with heightened concerns about forced labor, such as the XUAR. It allows for the incorporation of regional alerts into the compliance process, ensuring that any suppliers located in these high-risk areas are subject to extra scrutiny. This is particularly relevant for industries where supply chains are extensive and multi-layered, making it difficult to track the origin of all components or raw materials.

Forced Labor Questionnaires and GTS Import Compliance: A Robust Duo

GTS Import Compliance enhances how forced labor questionnaires are used, helping to prevent violations. If your company collects these questionnaires from suppliers, this system can automate information gathering and analysis. This is especially useful for managing intricate, multi-tiered supply chains.

The integration of questionnaires into the GTS system transforms a traditionally labor-intensive process into a streamlined, efficient operation. By automating these tasks, GTS Import Compliance not only ensures thorough screening in regions that CBP flagged for labor concerns but also significantly reduces the time and effort involved.

Take Action Today

Taking a stand against forced labor in supply chains is a critical move for any responsible business. Ropaar is here to assist you in this journey.

As experts in SAP GTS, we offer consultations and demos to showcase how our approach can empower your organization in the fight against forced labor. Partner with Ropaar and join us at the forefront of ethical global trade practices.

Contact us today to take a proactive step toward a more transparent and responsible supply chain.

In the midst of rapidly evolving Foreign Trade Zones (FTZs), businesses face a unique set of challenges. From new bilateral agreements to the dynamic e-commerce environment and the wavering landscape of U.S. trade agreements, the need for a focus on your trade processes is a must. After making a business case to move operations into a FTZ and selecting the SAP GTS solution, the next step of selecting a proficient SAP GTS implementation partner to operationalize your FTZ plans is even more critical.

Whether you are a current FTZ operator or considering developing a business case, imagine actively transforming these trade challenges into opportunities with the right SAP Global Trade Services (GTS) implementation partner. Explore how the ideal partnership can unlock unprecedented potential, streamline your processes, and propel your business to new heights.

Understanding SAP Global Trade Services (GTS)

SAP GTS is a comprehensive suite of solutions designed to streamline international trade compliance, facilitating smoother and faster global transactions.

With SAP GTS, businesses can adapt to region-specific customs requirements, increase visibility into global transactions, standardize and automate processes, and contain costs. The US FTZ management module within SAP GTS offers a complete solution to manage and monitor all FTZ activities, ensuring compliance with regulations, and providing visibility into operations.

Why the Right SAP GTS Implementation Partner Matters

Successful SAP GTS FTZ implementation hinges on your choice of implementation partner. A partner with not only technical expertise in SAP GTS but also a deep understanding of US FTZ regulations, US ACE Import and Export self-filing requirements and your unique supply chain network can tailor the right SAP GTS project approach, empowering your business to maximize the benefits of operating within an FTZ while staying compliant.

A well-implemented SAP GTS FTZ solution can streamline FTZ operations while meeting stringent filing deadlines, inventory controls and US CBP and FTZ board reporting requirements.

Five Top Tips for Choosing Your SAP GTS Implementation Partner

The ideal implementation partner helps you navigate the complexities of FTZ management, guiding you through the implications of regulatory requirements and optimizing your supply chain and trade processes. They bring a deep knowledge of SAP GTS, industry best practices, and hands-on experience to ensure a smooth implementation.

Here are five top tips for choosing the right partner:

  1. Assess their knowledge and expertise in SAP GTS FTZ solution: Look for a partner with a firm grasp of SAP GTS functionalities and capabilities, demonstrated through certifications, training, and successful referenceable implementations. Have them work with your chosen partner to map out the steps for establishing FTZ operations. A partner that can file your FTZ applications and audit your warehouse operations to meet FTZ requirements needs to work closely with your SAP GTS FTZ implementation partner with several timeline overlaps.

  2. Evaluate their experience in FTZ management: FTZ management requires specific knowledge and expertise. Ensure your partner has a track record in three domains of i) Implementing SAP GTS for FTZ management, ii) A track record of implementing US Import & Export self-filing to CBPs ACE system and iii) A thorough understanding of ERP goods receiving, issuing and manufacturing processes. SAP GTS FTZ solution provides end-to-end functionality integrating backend ERP warehouse receiving, manufacturing, and warehouse issuing processes with e-filings to US customs ACE system. A competency in all three areas is a must.

  3. Review their past projects and client testimonials: This can provide insights into their performance, reliability, and professionalism. Typically a customer will not only be new to US FTZ processes, but also to e-filings and monitoring of various steps involved in clearing customs. Work that would normally be undertaken by their broker. Bringing all this work in-house involves a complete transformation of trade operations. A patient and systematic approach to the implementation and business readiness is a must.

  4. Ensure their commitment to post-implementation support and maintenance: A successful go-live is just the beginning. Only a complete month-end and year-end FTZ process will completely prove out the robustness of your implementation. Despite the rigor in testing your processes, regulatory curveballs around yearly Harmonized Tariff Schedule changes, ACE changes, FTZ modernization etc.. will require some level of engagement with your chosen partner to keep the program humming. This is critical to address any issues and ensure the SAP GTS solution continues to meet your business needs and respond to any demands from US Customs and Border Protection.

  5. Check their adaptability to your specific business needs and requirements: Every business is unique. The right partner should customize the SAP GTS FTZ solution to fit your particular needs. While the same FTZ regulations apply to everyone, your specific supply chain might either require adjustment to comply with FTZ requirements or a complete change in business practices. A competent implementation partner will highlight such required adjustments. For e.g. business practices to hold shipments in yards while you clear space in the warehouse might be ok for goods declared at the border but the same poses a problem for receipts into FTZ. An adjustment or a revamp of such practices has to be part of design discussions.

Choosing the right SAP GTS implementation partner is vital for successful FTZ management. With the right partner and SAP GTS solution, your business can enhance FTZ management, ensuring compliance, boosting efficiency, and cutting costs.

Empowering FTZ Management with Ropaar: Your Trusted SAP GTS Implementation Partner

Standing at the forefront of SAP GTS implementation, Ropaar distinguishes itself by crafting solutions tailored to your distinctive supply chain challenges. This adaptability positions us as a top-tier choice for businesses aiming to elevate their FTZ management capabilities.

A Customized Approach to SAP GTS: Ropaar takes an individualized approach to SAP GTS implementation, studying your business thoroughly, understanding your unique problems, and crafting suitable solutions. This relational approach results in a deeper understanding of your needs and more effective solutions.

Innovative Technology Integration: Ropaar integrates ClassifAI™, a machine learning-based Trade Classification Assist tool, into your GTS processes. This tool learns from your existing classification data and predicts trade classifications for new products, which significantly enhances the efficiency and accuracy of your trade management processes.

Trusted “TRADEblazing” Partner: With Ropaar, you work with a trusted partner in your SAP GTS journey. Our team, known for empathy, independent thinking, and global diversity, communicates effectively in the customer’s language. We balance a small firm’s personal touch with a large firm’s accountability.

Partnerships Beyond Implementation: Ropaar is committed to fostering long-term partnerships, guiding you through your SAP and supply chain optimization journey. This commitment ensures you achieve profitable and sustainable outcomes, with Ropaar as a partner in your growth and success.

Choosing Ropaar as your SAP GTS implementation partner means opting for a partner committed to your success. Our tailored approach, innovative technology integration, experienced team, and long-term commitment make us an ideal choice for any business seeking to improve its FTZ management through implementing SAP GTS.

Ready to elevate your FTZ management with a tailored, innovative, and efficient SAP GTS solution? Let Ropaar, your trusted “TRADEblazing” partner, guide you through this journey towards improved global trade processes and sustainable outcomes.

Contact us today to learn more about how our SAP GTS expertise can transform your business.

Businesses face a variety of challenges in the constantly changing world of global trade that put their agility and understanding of global trade to the test. The difficulties associated with trade preference rules and compliance considerations are among them.

According to a United Nations Conference on Trade and Development (UNCTAD) report, “the utilization rate of trade preferences by developing countries is estimated to be around 60% on average, but varies widely across countries and products.”

Trade preference programs provide important advantages like reduced tariffs or duty-free treatment, but utilizing these advantages requires a detailed understanding of specific regulations and strict compliance monitoring. Heavy fines, heightened customs scrutiny, and potential reputational harm can all result from non-compliance. Therefore, in today’s cutthroat international marketplace, comprehending the complex web of trade preference criteria and compliance issues is essential.

In order to effectively hurdle these complications, organizations can use SAP Global Trade Services (SAP GTS), a comprehensive global trade management solution. SAP GTS transforms these potential barriers into opportunities for development and competitive advantage with a variety of capabilities, including managing import and export procedures, guaranteeing regulatory compliance, and handling preferential agreements.

Understanding Trade Preference Requirements and Compliance Considerations

Countries or groups of countries create trade preference schemes to encourage economic growth in developing regions. They accomplish this by giving certain products priority access to their markets, which may entail lower tariffs or even duty-free treatment. Businesses must adhere to a precise set of trade preference rules in order to receive these benefits.

These specifications sometimes include criteria for product type, the provenance of the goods, and certain manufacturing or processing methods. For instance, a particular proportion of a product’s value may need to be manufactured or supplied within the country or region that is providing the trade preference in order for the product to be eligible for that program.

Contrarily, compliance considerations refer to the requirement to strictly abide by the laws and regulations of both the importing and exporting countries as well as any applicable international laws. This can involve anything from making sure that products are properly documented and classified to keeping transparent and independently verifiable records of transactions.

There may be serious repercussions if trade preference regulations or other compliance issues are not followed. Financial penalties, such as fines and the loss of preferential access, may apply to businesses. They might also encounter more audits and inspections, which would cause delays at customs and disrupt supply networks. Non-compliance can also hurt a business’s reputation, hurting its interactions with clients, partners, and regulatory bodies.

The first step to effective management is understanding these needs and factors. Utilizing technology to handle these difficulties is the next step, and here is where SAP GTS comes into action.

Navigating Trade Preference Requirements and Compliance with SAP GTS

SAP GTS’ Preference Processing feature simplifies trade preference management by automatically applying the Free Trade Agreement (FTA) Rules of Origin to determine whether products are eligible for preferential treatment under different trade agreements. SAP GTS saves time, lowers the chance of manual errors, and assures precise and consistent rule application by centralizing and automating the determination process.

SAP GTS also has Compliance Management and Customs Management functionalities to ensure compliance. Customs Management works in conjunction with the Preference module to automatically apply FTA claims in customs export and Import filings, while Compliance Management assists firms in adhering to laws controlling imports and exports.

Additionally, SAP GTS enables companies to keep a clear and verifiable record of their trading activity. This helps with internal reviews and audits and fosters trust with customs authorities, which could speed up the customs process and reduce administrative burden.

Leverage Ropaar’s SAP GTS Expertise

With its extensive feature set created to streamline and automate international trade procedures, SAP GTS offers enterprises a potent weapon for simplifying trade preference and compliance management.

However, knowledge and experience are required to fully realize the potential of this technology. Ropaar can assist organizations in implementing and optimizing SAP GTS, ensuring they continue to be compliant and competitive in the global market. Backed by over 20 years of experience in international trade and a strong focus on SAP, Ropaar’s SAP GTS services offers organizations the flexibility to choose the perfect fit solution based on their specific needs.

Contact one of our SAP GTS experts to learn more about how you can simplify trade preference and compliance management.

The timely submission of appropriate paperwork, such as trade declarations and certificates, is an inescapable part of international trade. However, a filing error or compliance breach can have major repercussions, such as steep fines, the suspension of trade privileges, or even legal action.

Some of the common problems that frequently result in errors and violations include a lack of awareness of intricate trade laws (which can vary greatly between nations), problems with data management and information flow, and the possibility of human error due to manual operations. Furthermore, these difficulties might be made worse by the quick-paced nature of international trade and the stress of tight deadlines. With these challenges in mind, companies involved in international trade need to have a sound strategy in place to prevent filing mistakes and compliance infractions.

Key Tactics to Avoid Filing Errors

Knowing your product, keeping accurate records, continual training and education, and utilizing technology are the keys to avoiding filing errors in international trade.

Know Your Products Thoroughly: It’s critical to have a thorough understanding of your product. This includes being aware of the product’s precise description, cost, and place of origin in addition to its proper Harmonized System (HS) code categorization. All of your submissions need to appropriately represent this data.

Keep Accurate Records: Maintaining accurate records is another crucial step. Organize and make accessible any trade-related documents and information.

Regular Training and Education: Providing your personnel with regular training helps keep them informed about the most recent requirements and educate them on the complexities of precise filing.

Key Tactics to Avoid Compliance Violations

It takes initiative and diligence to maintain compliance in global trade. Here are some key tactics to consider:

Keep Up with Trade Restrictions. Trade restrictions are always changing, so it’s critical to stay current on changes to customs legislation, export and import regulations, and international trade laws.

Recognize and Obey Local Rules. Each nation has its own particular set of trade rules and regulations. When conducting business with various nations, it is essential to keep track of these rules and follow them. It is not enough to rely on service providers and completely outsource these functions, since your business as the Importer or Exporter of record is ultimately liable regardless of the usage of Service providers.

Implement a Compliance Program. Having a solid compliance program helps your team establish clear rules to abide by. This covers protocols for managing regulated commodities, getting the right permits, and adhering to safety and quality requirements.

The Role of Technology in Ensuring Accuracy and Compliance

Technology is essential for improving accuracy and assuring compliance in global trade in today’s digitally interconnected world. For companies trying to successfully traverse the complex world of global commerce, sophisticated technologies like SAP Global Trade Services (GTS) have emerged as useful tools.

Ropaar’s SAP GTS experts ensure that your trade operations are fully automated and all your files are proper and legal. It greatly lowers the likelihood of mistakes and infractions by leveraging SAP GTS capabilities like automatic legal control and customs administration.

The SAP GTS solution can be further customized by Ropaar’s team of professionals to meet your particular requirements, making it genuinely custom-tailored. Ropaar even offers SAP GTS as-a-Service which is available on multiple public cloud platforms based on your preference.

Contact us now to learn more about these solutions and services.

Managing customs operations presents international traders with numerous challenges, such as uncertainty in the trade environment and changes in global trade dynamics that can trigger shifts in import/export regulations, tariffs, and trade agreements.

Take, for instance, the recent increase in customs tariffs for apparel and footwear imports by the Colombian government or Japan’s 2023 tax reform changes to its customs law. Indonesia also introduced new customs procedures for importing software and digital goods electronically.

International traders also have to balance trade protectionism and facilitation. While some countries protect their industries by limiting certain types of trade, others simplify the import and export of goods and sign major trade agreements like the Regional Comprehensive Economic Partnership (RCEP).

Different trade policies across countries complicate customs procedures for international traders. Ineffectively managing this complexity can result in delays, higher costs, and reputational harm.

Overcoming customs challenges

How do successful international traders across industries navigate these challenges and smoothly handle customs operations across different countries and regions?

By addressing the root issues, such as lack of visibility, standardization, and automation, successful international traders can more effectively manage ever-changing customs requirements and customs operations across different regions and countries.

They invest in advanced solutions like SAP Global Trade Services (GTS) to enhance visibility into end-to-end customs processes, standardize procedures, and eliminate error-prone manual procedures such as import and export filing.

SAP GTS is a comprehensive global trade management suite that provides various tools and functionalities, enabling businesses to:

  • automate and standardize customs processes,
  • centralize and manage global trade compliance requirements,
  • drive consistency across global operations,
  • leverage free trade zones (FTZs) for region-specific duty minimization, deferral, and avoidance regimes, and
  • meet Intrastat and Excise movement requirements.

How SAP GTS empowers international traders

Using SAP GTS, international traders can conquer customs management challenges, ensuring seamless and compliant cross-border transactions. The platform’s robust features and functionalities allow businesses to quickly adapt to changing regulatory environments, streamline their customs processes, and maintain a global competitive edge.

A global leader in the food industry leveraged SAP GTS to eliminate manual and expensive import filing processes and facilitate import self-filing. Consequently, the company self-filed 90% of its import volume into Europe through Great Britain, completely eliminating broker fees and increasing regulatory confidence.

A leading global manufacturer of HVAC products also streamlined its customs operations with the help of SAP GTS without increasing its headcount. A multinational conglomerate corporation operating in various sectors, such as consumer goods, worker safety, and healthcare, used SAP GTS to enable import and export self-filing to various European countries. As a result, the company saved $100 million in Free Trade Agreement (FTA) savings, among other competitive advantages.

SAP GTS-as-a-Service: A cost-effective way to leverage SAP GTS

For businesses looking for a more flexible and scalable solution for managing their customs operations, fully managed SAP GTS solutions offer an appealing alternative.

SAP GTS-as-a-Service provides the full benefits of SAP GTS in an affordable subscription package, eliminating the need for large upfront investments. This secure, cloud-based solution accelerates the adoption of SAP GTS while reducing risk, lowering the cost of ownership, and accelerating time to value.

With SAP GTS-as-a-Service, businesses can concentrate on their core operations and swiftly adjust to changing customs requirements, maintaining a competitive edge in the global market.

The bottom line

Effectively managing customs operations is critical for international traders in today’s dynamic global trade environment.

By adopting proven GTS solutions, your business can more effectively navigate the complexities of international trade, ensuring continued growth and prosperity in an increasingly interconnected global economy.

However, the success of solution adoption heavily depends on the knowledge and skills of the implementation partner, regardless of the deployment model. Therefore, it’s crucial to carefully evaluate and select a partner that has a proven track record and the necessary expertise to ensure a successful integration.

Don’t allow customs challenges to hinder your business. Optimize your customs operations with SAP GTS for lasting success. Contact us.

Businesses frequently rely on a complicated web of overseas partners and suppliers for everything from acquiring raw materials to manufacturing goods to reaching customers. Effective collaboration with these foreign organizations is essential to a company’s success since it can result in enhanced productivity, better product quality, and access to new markets.

An “open network” is a type of collaboration in which all parties involved — enterprises, partners, and suppliers — cooperate in an open, welcoming, and communicative atmosphere. This model encourages information exchange, builds confidence, and gives each organization the freedom to contribute to the fullest extent possible, resulting in a supply chain that is more effective and efficient. Companies that work closely with their suppliers perform better than their competitors and may experience cost reductions of 5 to 10% and revenue increases of 7 to 10%, depending on the industry.

The Challenges of International Collaboration

Despite the obvious advantages, international cooperation has its share of difficulties. Businesses that collaborate with foreign partners and suppliers frequently face a number of challenges that might thwart productive collaboration.

Dealing with time zones is one of these difficulties. Meetings, answers, and deadlines can become difficult to coordinate when your partners or suppliers are spread out across the globe. Communication lags can result in operational bottlenecks and delayed decision-making processes.

Another difficulty is a disparity in culture. Every nation has specific social norms and business practices. A business activity that is considered normal in one culture might not be acceptable in another. Due to cultural differences, there may be misunderstandings, which can cause misinterpretation and slow down operations as well as potentially ruin corporate relationships.

The absence of transparency might also cause a big problem. Lack of transparency in the activities of partners or suppliers can cause mistrust, misalignment, and inefficiencies in business relationships.

These difficulties highlight the need for a more transparent, open, and effective method of international cooperation, which is where the idea of an open network comes in. An open network resolves all the aforementioned issues, allowing companies to collaborate easily with their international partners and suppliers.

The Benefits of an Open Network

An open network offers a wide range of advantages that can greatly improve cooperation, especially when working with international partners and suppliers.

Improved Communication and Information Sharing. An open network guarantees that everyone is on the same page and lessens the possibility of misunderstanding by providing a platform where all parties may communicate freely and in real time. Additionally, it encourages efficient information sharing by enabling suppliers and partners to swiftly exchange crucial data, updates, and insights.

Enhanced Transparency and Trust. Another important advantage of an open network is transparency. Partners and suppliers can better align their procedures and expectations, lowering the likelihood of mistakes or misalignments, when they are aware of each other’s business operations. Additionally, this openness fosters trust. Businesses that are open in their operations show that they are dependable and honest, which builds trust among all parties.

Streamlined Operations and Improved Efficiency. Last but not least, an open network can result in greater efficiency and more streamlined operations. Businesses can get rid of pointless delays, cut errors, and improve workflows with clear communication, increased transparency, and higher confidence. Shorter time to market, lower costs, and greater product quality can all be the outcomes of increased efficiency.

How to Build an Open Network

Strategic planning, an investment in the appropriate tools, and the promotion of an open and inclusive culture are all necessary for creating an open network. Here are some guidelines for building a successful open network.

Leverage Digital Platforms and Tools. There are many platforms and tools available that can encourage transparent communication and collaboration. Businesses may interact with their overseas partners and suppliers in real-time using cloud-based collaboration tools, supply chain management systems, and data-sharing platforms, ensuring that everyone has access to the information they require when they need it. Blockchain technology can offer a transparent and secure manner of recording and validating transactions.

Promote a Culture of Openness and Inclusivity. A truly open network considers both technology and culture. Businesses need to promote an environment where all partners and suppliers are respected and heard. This may entail putting policies into place that promote candid communication, inclusivity, and respect for one another. It also entails recognizing cultural distinctions and figuring out how to fill up the gaps to enable effective collaboration.

Encourage Regular Communication and Feedback. An open network cannot function without consistent communication. Businesses should promote constant communication with their partners and suppliers, keeping them informed of any changes or developments and, when appropriate, soliciting their input. The establishment of feedback channels is also crucial. Giving partners and suppliers the freedom to express their issues, recommendations, or ideas helps promote innovation and ongoing improvement.

Ropaar’s Approach to Fostering an Open Network

Ropaar leverages its expertise in SAP services and next-generation technologies to facilitate effective collaboration. Our SAP services, including Global Trade Services (GTS) implementation and support, provide robust and integrated solutions that streamline operations and improve visibility across the supply chain.

Ropaar’s use of advanced technologies such as AI, machine learning, and the Internet of Things (IoT) allows for real-time data sharing, increased operational transparency, and improved decision-making. This digital-first approach not only enhances efficiency but also fosters a high level of trust and cooperation among all parties involved.

By leveraging Ropaar’s years of experience in foreign trade, you can be confident that your organization can overcome current and future global trade challenges. Contact us to learn more about our solutions and services.

The intricate world of international trade can intimidate businesses involved in importing and exporting products. Achieving compliance with customs requirements and reducing the possibility of expensive delays, fines, and penalties are crucial aspects of this process, especially in trade classification.

Classifying imported or exported products is a complex endeavor. Numerous potential pitfalls can trip up even seasoned professionals. Some of the most frequent errors include incorrect or outdated product classifications, improper use of classification codes, and misinterpretation of classification guidelines.

While these mistakes might appear minor, they can lead to significant consequences, such as:

  • Delayed shipments: Improperly classified products may face hold-ups at customs until the correct classification is determined, delaying shipments and causing financial losses for importers or exporters.

  • Increased costs: For example, if importers or exporters pay the incorrect customs duty amount due to a wrong classification, they may need to pay the difference plus interest, which can become a substantial financial burden.

  • Potential legal issues: Importers or exporters who classify products non-compliantly may face fines or other penalties.

Reasons for trade classification mistakes and errors

Several factors contribute to the prevalence of trade classification errors, including the complex nature of international trade classification systems and constantly evolving procedures.

Manual processes and data entry errors also pose challenges in trade classification, particularly in systems like the Harmonized System (HS). A Thomson Reuters and KPMG study (as cited by the World Customs Organization) discovered that 95% of participants encountered difficulties with HS classification, emphasizing the challenges of predominantly manual classification processes.

The enormous volume of daily imported and exported products enables errors to slip through unnoticed in various trade classification systems. Additionally, insufficient internal procedures and control mechanisms worsen these problems, leaving inaccuracies undetected and unresolved.

Strategies successful global traders use to avoid mistakes and errors

Global traders avoid trade classification pitfalls by employing various strategies, including staying current with the latest classification guidelines and changes and ensuring their staff is well-informed and capable of classifying products accurately.

However, leading global traders understand the importance of establishing robust internal processes for classification and utilizing intelligent solutions like ClassifAI, a machine learning assist tool for trade classification.

ClassifAI significantly lowers the risk of human error by standardizing and automating much of the classification process and offering a more efficient method of handling classification tasks. It employs algorithmic intelligence and continually learns and updates its knowledge base to stay current with classification changes, ensuring that businesses using the platform comply with the latest requirements.

With ClassifAI, global traders can achieve the following:

  • Predict trade classification with 99%+ accuracy

    ClassifAI harnesses the predictive power of product-related supply chain data already existing in the company’s ERP system. It helps achieve 99% accuracy in predicting the correct classification for fully qualified HS codes and more than 99% for the 6-digit harmonized classification.

  • Empower users to confidently choose classifications

    ClassifAI’s predicted classifications are accompanied by predicted probabilities. When there is a high likelihood for a single AI-suggested classification, the tool assists users in reaching a decision, offering extra reassurance when selecting evident classifications.

  • Avoid costly consequences

    By improving classification accuracy, ClassifAI reduces the risk of delays and penalties associated with classification errors, saving businesses both time and money.

  • Improve efficiency

    The increased efficiency the tool provides frees up valuable resources, allowing staff to focus on other important tasks and responsibilities.

  • Increase compliance

    By staying up-to-date with the latest classification changes, the platform helps businesses reduce their audit risks and maintain a strong reputation within their industry. This can be particularly important for companies operating in highly regulated sectors, such as life sciences and chemicals.

ClassifAI supports multiple industries, catering to various sectors and ensuring that the platform is tailored to meet specific classification needs. This level of customization and adaptability is invaluable for companies dealing with diverse product lines and ever-evolving regulations.

Moreover, ClassifAI seamlessly integrates with existing systems and processes, allowing businesses to easily incorporate it into their current workflows without the need for extensive changes or overhauls.

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In the competitive landscape of global trade, minimizing trade classification mistakes and errors is essential for ongoing success. By leveraging advanced technology like ClassifAI, businesses can simplify their classification processes, improve accuracy, and reduce the risk of costly mistakes.

Don’t let trade classification errors hold your business back. Learn more about how ClassifAI helps overcome common classification challenges and enhance your global trading capabilities. Request a demo today.

International trade is a crucial driver of global economic growth but comes with unique risks: currency fluctuations, trade barriers, geopolitical instability, and product quality and safety concerns. Managing these risks is essential for businesses engaged in international trade to ensure successful outcomes. Fortunately, companies can increasingly rely on digital solutions to manage these risks like a pro.

Understanding International Trade Risks

Before diving into digital solutions, it’s essential to understand the types of risks involved in international trade. These risks include political, credit, market, operational, legal, and regulatory risks. These risks can cause significant financial losses for businesses if not properly managed.

Identifying and assessing potential risks early on is critical in developing a proactive approach to risk management. For instance, a company that exports goods to a country facing political instability may face delayed or canceled shipments and, in the worst-case scenario, the loss of its products. On the other hand, a company importing raw materials from a supplier that goes bankrupt could result in financial losses due to missed production deadlines. Thus, businesses must identify and analyze these risks to minimize their impact.

Top Digital Solutions for International Trade Risk Management

Digital solutions can be advantageous for businesses seeking to stay ahead of the curve when managing international trade risks. The use of digital technologies offers promise in reducing trade and transaction costs, which includes identifying and negotiating a deal, demonstrating compliance with standards, and delivering products across borders quickly and efficiently.

Here’s a round-up of the top digital solutions that can help businesses manage risks in international trade:

Data Analytics can help businesses gain real-time insights into their supply chains, enabling them to identify potential risks before they become significant issues. This solution can help companies to monitor changes in currency exchange rates, trade policies, and geopolitical events, allowing them to adjust their strategies accordingly.

Artificial Intelligence can support businesses in automating various processes related to international trade, such as customs and regulatory compliance. For example, AI can help enterprises automatically classify products for import and export purposes, ensuring compliance with customs regulations. Similarly, AI can help screen for potential trade sanctions and embargo violations, minimizing the risk of fines and penalties.

Blockchain Technology can assist businesses in improving transparency and accountability throughout the entire trade process, from manufacturing to the final destination. For example, blockchain technology can help companies to track and trace products, ensuring that they comply with safety and quality standards. Additionally, blockchain technology can help businesses protect against counterfeiting and intellectual property theft, minimizing the risk of reputational damage and financial loss.

The Internet of Things (IoT) can improve the visibility of the supply chain, optimize warehouse operations, and monitor the condition of goods in transit. By utilizing IoT-enabled sensors and devices, businesses can receive real-time data on the location and status of shipments, enabling them to make informed decisions, reduce waste, and improve customer satisfaction. For example, IoT can monitor the condition of goods during transit, alerting businesses if any parameters deviate from expectations and allowing them to take corrective action. Additionally, IoT can automate inventory tracking, optimize routing, and improve material handling, resulting in overall warehouse efficiency.

Global Trade Compliance Platforms, such as SAP S4 International Trade and SAP GTS can help businesses comply with complex regulations related to international trade. These platforms often include tariff and duty management, customs declaration management, and trade sanction screening, which can help businesses avoid fines and penalties.

By leveraging these solutions, companies can gain a competitive advantage in the global marketplace and achieve success in their respective industries.

For example, in the CPG industry, digital solutions can help ensure compliance with packaging, labeling, and product safety regulations. In the food and beverage industry, digital solutions can help businesses comply with food safety standards and regulations while also helping to track and trace products to minimize the impact of any quality issues.

In the sporting goods industry, digital solutions can help manage risks related to counterfeit products and intellectual property theft. Similarly, in the chemicals industry, digital solutions can help ensure compliance with safety regulations while also helping to mitigate risks associated with hazardous materials.

Overall, these digital solutions offer businesses the ability to identify and manage risks associated with international trade while minimizing costs and ensuring compliance with regulations.

Achieve Pro-Level Risk Management in International Trade with Ropaar

Ropaar offers systems integration services focused on a range of digital solutions for international trade risk management, including their SAP GTS and SAP S4 International Trade.

SAP S4 International Trade and SAP GTS are powerful software platforms that help businesses manage their global trade operations more effectively. Among the features and capabilities offered by the platform are those that aid companies in identifying and managing risks associated with international trade. These include:

Global Trade Compliance: SAP GTS includes a comprehensive global trade compliance module that helps businesses comply with complex regulations related to international trade. The module includes tariff and duty management, customs declaration management, and trade sanction screening, which can help businesses avoid fines and penalties.

Trade Document Management: SAP GTS includes a robust document management system that helps businesses manage the large volumes of trade documents generated during international transactions. The system’s highly automated design minimizes the risk of errors and delays.

Trade Analytics: SAP GTS includes powerful analytics capabilities that allow businesses to gain insights into their trade operations. The platform can provide real-time data on metrics such as import and export volumes, compliance rates, and costs, which can help businesses make informed decisions about their trade operations.

To sum up, Ropaar’s services focused on SAP International Trade Management solutions provide a robust digital solution for managing risks in international trade that presents a variety of features and capabilities that aim to assist businesses in prospering in the worldwide market. Whether you’re looking to streamline your trade operations, minimize risks, or ensure compliance with regulations, SAP solutions can help you achieve your goals and stay ahead of the curve. Talk to our experts today!

The food industry has crucial roles and responsibilities in achieving Sustainable Development Goals (SDGs). Most of these goals are associated with the sector — including SDGs 2 (Zero Hunger), 3 (Good Health and Well-Being), and 12 (Sustainable Consumption And Production). At the firm level, global food companies can significantly contribute to achieving SDGs and reap competitive advantages by weaving sustainability into their foreign trade processes.

Help Strengthen The Pillars

According to the Handbook for SDG-Aligned Food Companies, international food traders can use the Four Pillars Framework to evaluate their alignment with the SDGs.

Pillar 1: Beneficial Products. International food traders must ensure that their products are healthy and sustainable, employ “responsible, equitable, and honest marketing and labeling practices,” and keep the products secure and safe until they reach end consumers.

Pillars 2 and 3: Sustainable Operations and Value Chain: International food traders must participate in minimizing greenhouse gas emissions, water footprint, and food waste. They should also help eliminate human and animal abuses, respect resource rights and ensure occupational health and safety.

Pillar 4: Good Corporate Citizenship. International food traders must “implement governance structures and management systems that center impacts of the company’s operations, products, and value chain on people and planet.” They must also observe responsible tax and litigation practices and support the government’s efforts to achieve the SDGs without influencing policymakers to advance the company’s interest.

To help “strengthen the pillars,” food companies must comply with relevant standards (such as USDA-mandated requirements) and implement sustainable practices when exporting or importing ingredients and food products.

Overcome Foreign Trade Challenges And Disruptions

The inherent complexity of the food sector’s value chain makes it difficult to achieve sustainable foreign trade management. Many internal and external players are involved in end-to-end food production and distribution. Ensuring sustainability can be daunting when visibility, transparency, and traceability are poor. Processing compliance papers alone can be complicated, particularly when the process is mainly manual and paper-based.

Aside from compliance processing challenges when importing or exporting food products, various supply chain events can be a problem. Supply chain disruptions (e.g., labor, transportation, and container shortages; inflation; and the pandemic) can have cascading effects such as longer shipping times that lead to food contamination, food waste, and other “non-sustainable” consequences.

How do you overcome these challenges?

Use The Right Global Trade Solutions

There is no single recipe for foreign trade problems and sustainable food product trading. However, implementing robust solutions that optimize visibility, transparency, and traceability, eliminate manual and paper-based processes, and increase regulatory confidence can all be a great help.

Ropaar helps food exporters and importers implement robust SAP foreign trade solutions. This enables them to be more sustainable in international trade management. Ropaar’s technical and industry expertise can help international food traders gain the following from SAP deployments:

  • Automated management of foreign trade zone admissions
  • Simplified intercompany cross-border goods movement via invoice integration
  • Improved data quality and compliance
  • Reduced costs with consolidated import/export filing

Food companies can take advantage of our industry expertise in food production and processing. This includes compliance with USDA-mandated requirements for all major protein exporting companies, inventory-managed customs procedures, exception-based compliance processes with denied-party screening, and self-filing import/export documentation.

Conclusion

Food companies have a crucial role in achieving Sustainable Development Goals. And making their international trade management sustainable is one of the key ways they can participate in achieving sustainability.

Ropaar helps international food traders to integrate sustainability into their foreign trade processes. They also gain competitive advantages by using proven GTS services and solutions.

Let’s talk and see how our global trade experts can help your company achieve sustainable foreign trade processes. Contact us.

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