Reducing trade costs with wisely implemented trade facilitation.

Customs brokers & trade facilitation

Customs brokers are defined as "third parties" in the meaning of any person who deals directly with the Customs, for and on behalf of another person, relating to the importation, exportation, movement or storage of goods.

There are brokers who operate as sole proprietors at one entry port, while others can be large corporations with branches in different entry ports. However, regardless of the company size, customs brokers are all licensed and regulated by the Government.

Customs brokers are not only knowledgeable in customs regulations, but there are many well-experienced brokers who have expertise in entering products that require Other Government Agencies filings. Customs brokers can also play the role of a consultant to assist traders.

Like the freight forwarder for international shipping, customs brokers play an important role in the supply chain of trade.

Supply chain & trade facilitation

Trade facilitation has to embrace the entire trade environment, actors, and processes involved in a transaction.

A supply chain embraces all activities necessary for goods to be produced and delivered to the final consumer. Such activities include sourcing of raw materials, preparing for transport, requesting an import license, preparing documentation for Customs clearance, clearance, payment, and delivery to the consumer. As a minimum, a supply chain involves two parties, the seller and the buyer. In reality, a supply chain involves many different parties.

These can be private-sector traders, transport operators, service intermediaries, customs brokers, or regulatory bodies from the public sector.

Keeping track of the entire chain can be challenging for any company, regardless of the size and scope.

Trade facilitation - principles and benefits

The fundamental principles of trade facilitation are transparency, simplification, harmonization, and standardization.

Seems that trade facilitation has become a key factor for international trade due to its impact on competitiveness and market integration and its increasing importance in attracting direct foreign investments.

Lack of transparency about rules and regulations, clearance processes, and multiple documents requirements in different formats and with different data elements, increase the costs and time of doing trade. It is more important than ever to achieve trade facilitation to enhance administrative efficiency and effectiveness, reduce costs and time to markets, and increase predictability in global trade.

What is trade facilitation?

The primary goal of trade facilitation is to help make trade across borders (imports and exports) faster, and cheaper and more predictable, whilst ensuring its safety and security. In terms of focus, it is about simplifying and harmonizing formalities, procedures, and the related exchange of information and documents between the various partners in the supply chain.

Why does it matter?

Both governments and the business have benefited from trade facilitation. Public entities will profit in terms of enhanced trade tax collection, better use of resources, and increased trader compliance. More efficient and transparent delivery of public services will allow the administration to maintain high-security levels and effective government control while diminishing opportunities for corruption.

Traders will gain in terms of higher predictability and speed of operations and lower transaction costs, resulting in more competitive exports on global markets.