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Companies paying more than they need to in import tariffs

More than two-thirds of companies are paying more than necessary in tariffs and duties when exporting or importing. A survey by Thomson Reuters-KPMG International found that 70% of companies are not taking full advantage of foreign trade agreements (FTAs). The survey's respondents blamed manual processes, fragmented systems and the complex and changing regulatory requirements.

The survey, which was conducted on a sample of 446 corporate trade specialists in 11 countries, also produced the following results:

  • 79% of respondents said their biggest FTA roadblocks are complex rules of origin and difficulty gathering documentation;
  • the top three drains on time and resources are import documentation and licensing, customs broker management, and product import classification;
  • import classification, documentation and licensing are seen as the trade-related activities that create the greatest risk of penalties, other government sanctions, or increased operational costs;
  • the main challenges are interpreting rules across borders, changing requirements with local government agencies, and dealing with antiquated processes;
  • two-thirds of the survey respondents said they expect global trade to become more complicated over the next three to five years;
  • 85% said product classification can be problematic.

James Carneiro, a Thomson Reuters trade expert, told Forbes: “Not only can compliance with the regulations be burdensome and non-compliance result in costly penalties, but the fear of non-compliance can lead to savings opportunities not taken. The complexity for both importer and exporters in dealing with FTAs is already significant and bound to increase over time.”

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