Supply Chain Compliance and Trade Risk Assessment

In Collaboration with IBJ/IJE

International trade and customs rules bring both risks and opportunities in their wake. In order to properly serve their company, in-house counsel must be fully informed about supply chain compliance. In this webinar, experienced Crowell & Moring partner, Vassilis Akritidis and the Brussels Trade Team, will highlight the key points to remember and discuss in more detail the following topics: 

Compliance
It is of vital importance that any company importing raw materials is in compliance with the rules on customs classification, valuation and origin. Mistakes can take a heavy toll, with parties potentially exposed to retroactive duty imposition, hefty fines and even fraud allegations. Companies must also ensure that they comply with specific rules on preferential origin stemming from free trade agreements, and these are particularly complex. 

Often overlooked, trade and customs issues should be central to the due diligence process of an M&A. If the target company does not comply with respect to classification, valuation and origin of imported goods, there may be liability issues associated with the transaction. Similarly, trade defense investigations can alter the value of the acquired assets dramatically in cases where investigations are ongoing in export markets of interest, or where the EU is about to adopt duties on imports of critical raw materials. 

Risks
As regards enforcement, customs investigations often have retroactive effect and are associated with interest payment and fines. Anti-dumping and countervailing duty exposure is also often associated with false origin (circumvention). Furthermore, conventional duty and import VAT errors may go undetected for some time before being discovered by the authorities. Fraud enforcement often involves an OLAF investigation concerning the evasion of anti-dumping and countervailing duties, which runs alongside any investigations carried out by national authorities.

Amid complicated negotiations following Brexit, importers and exporters have faced unprecedented challenges, not least the tensions created by such topics as the Northern Irish border. Brexit has also brought with it complicated customs compliance issues, the likes of which have not had to be dealt with before.

Opportunities
But the news is not all bad. In this webinar we will also take a look at good trade and customs compliance practices. Through the use of the appropriate legal tools, companies can increase their profitability by taking advantage of, for example, duty suspensions and refunds. Refunds are self-explanatory in cases of misclassification or the overvaluation of goods. Duty suspensions or duty-free tariff rate quotas are mechanisms designed to help EU manufacturers to remain competitive in the global marketplace by suspending import duties on certain critically needed imports for cross-border supply chains.