Everything You Need to Know About Import Controls

02/08/23 6 minute read

What are import controls?

Import controls are policies issued by governments to prevent the importation of goods that are potentially harmful to the safety of their citizens or the national economy. Economic import controls are often used to prevent widespread market penetration of foreign commodities when domestic production is vital to a country’s economy.

At its most basic, import compliance is an aspect of corporate compliance that includes the rules, regulations and best practices of importing from particular countries. It’s important that every part of your organization—including but not limited to sales, accounting, shipping, purchasing, and legal—is aware of their trade compliance responsibilities to ensure that all imports are in conformance with the laws and regulations of the countries involved. Companies that import internationally need to comply with a complex regulatory framework imposed by multiple governing bodies within even the same country. 

For importers, ensuring trade compliance includes:

  • Determining if there are any restrictions or limitations on importing certain goods into the country
  • Identifying the correct classification for the goods
  • Identifying and reporting the appropriate duty rates and taxes for entering the goods into the country

Why are import controls important?

Import controls are essential because countries have the right to protect their citizens from harmful goods, ensure businesses and individuals aren’t effectively supporting human rights violations abroad, or simply to safeguard competitive advantages in a global marketplace.

For importers, there are consequences for not understanding and abiding by trade compliance regulations. Unfortunately, regulations are often not harmonized across trading countries and navigating these requirements amid a volatile global trade environment poses new challenges for compliance teams.

Regulatory and enforcement climates of import controls often change rapidly and in some cases with little warning. As countries update their sanctions lists to address the current state of foreign affairs, global trade compliance processes must also react accordingly. 

If done incorrectly, importers may face financial consequences, which can include higher interest rates, financial penalties, and more. In addition, imports could be held in customs without a timeline for release, thus delaying the payment for the goods.

What is the latest in import controls legislation?

Import controls are in a constant state of flux. Trade compliance teams need to be working off of up-to-date information.  For example, one of the latest pieces of legislation to watch out for is ​​the Uyghur Forced Labor Prevention Act (UFLPA), passed on December 21, 2021. The UFLPA, which went into effect on June 21, 2022, is unique in its enforcement protocol. US Customs and Border Protection (CBP) has made clear that all imports from Xinjiang will at least be detained – in some cases seized – unless the importer can provide “clear and convincing evidence” that the goods are free of forced labor. While this does bring additional challenges for importers, the law is a major step towards weakening the forced labor industry in China.

>> Learn the answers to the 12 most asked questions about the UFLPA <<

Another major global event for trade compliance professionals to watch out for is the Russian sanctions regime. Since Russia’s invasion of Ukraine, countries across the world have stepped in with sanctions to attempt to damage Russia’s economy and weaken their military power. Even as recently as August, the U.S. Treasury and State departments have continued to impose new sanctions. Over 30 countries have issued far-ranging sanctions and bans on Russian imports. Companies who do business internationally face the challenge of understanding different sanctions regimes from around the world to ensure all of their imports remain in compliance.

>>  Learn tips for complying with the ever-growing list of Russian sanctions <<

How can I run efficient import controls investigations?

It would be impossible to remain in compliance with import laws if you didn’t have all of the information on the associated importers, exporters, and manufacturers. A commercial risk intelligence platform, such as Sayari Graph, leverages global public records and graph technology to pre-compute complex, cross-border corporate networks, thus providing a clear picture of illicit financial actors, their infrastructure, and relationships. This comprehensive view provides importers with broader context surrounding their partners and counterparties. If you’re looking to stay in lock step with regulators, US Customs and Border Protection also relies on Sayari Graph data for regulating trade.

>> Learn how to enhance your supply chain audit with Chinese public records <<

Sayari Graph can help identify and investigate counterparties to import shipments, and check for exposure to high-risk and sanctioned markets like Iran and Venezuela, or to non-obvious state-owned or state-invested enterprises (SOEs) in places like Russia and China. Precomputed UFLPA Risk Indicators and a suite of graph analytics tools empower import control teams to quickly and confidently diligence sub-tier supplier networks. The platform’s continuously updated public records will ensure that you’re always working with the most current information on ownership

See the impact for yourself with a personalized demo of Sayari Graph. For inspiration, watch one of our in-house analysts perform an example investigation and learn how to mitigate the risk of Xinjiang forced labor in global supply chains.

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