eCustoms - Sarbanes-Oxley and Global Trade

SARBANES-OXLEY

Sarbanes-Oxley (SOX) makes it mandatory for companies to have internal controls in place at every level of the organization to ensure the highest degree of financial accuracy and accountability. These controls must guarantee:

All business transactions conform with applicable laws, including those governing international trade
Transaction records are accurate, permitting the preparation of financial statements in accordance with GAAP
The elimination of all material weaknesses that debilitate the effectiveness of those internal controls
Internal control procedures are followed properly throughout the company
The rapid disclosure of material changes that could affect a company’s financial health
The effectiveness of the internal controls to an independent auditor, when required

Sarbanes-Oxley also puts corporate executives directly in charge of these internal controls. The SOX Act states:

"...the principal ...and signing officers ... are responsible for establishing and maintaining internal controls ...."

The penalties for breaching SOX rules are extremely severe: fines of up to $5,000,000 and 20 years’ imprisonment.

Why SOX is important in global trade

Sarbanes-Oxley requires top company executives to certify the accuracy of financial statements and the effectiveness of internal controls. Such a guarantee extends to every level and corner of an organization, including Import and Export operations.

Non-compliance with trade laws can result in heavy fines and the revocation of global trade privileges, which can adversely impact the company’s bottom line. Such non-compliance also puts businesses at risk of hefty SOX penalties if their internal controls are inadequate or non-existent.

Sarbanes-Oxley gives corporations no room for error. Not a single material weakness is allowed in their internal controls. Businesses, therefore, must also demonstrate a commitment to trade compliance, including procedures for:

Restricted party screening or denied party screening
License determination
Tariff Classification
Preferential Trade agreements, such as NAFTA

The risk of falling foul of SOX regulations is very real as the government more stringently monitors the activities of corporations to protect the interests of shareholders; and as U.S. Customs and Border Protection (CBP) steps up the enforcement of import and export laws to ensure the integrity of trade agreements, and to safeguard homeland security. Such high levels of enforcement are expected to continue for the foreseeable future.

How you can become SOX compliant

Being SOX compliant means putting in place a system that can prevent or detect material mis-statements that can have severe consequences to the bottom line. This includes controls designed to enhance the effectiveness of internal controls such as ensuring adequate documentation, monitoring and auditing processes.

eCustoms helps ensure your compliance with both Sarbanes-Oxley and applicable trade regulations with solutions that provide you with a range of functionality, including:

Document creation and management
Automated record-keeping
Real time updates of rules and regulations
Immediate updates of restricted or denied party lists
Audit reports proving compliance
Easy integration with your Legacy/ERP systems

eCustoms Compliance Solutions

eCustoms offers a comprehensive set of automated, web-based solutions to ensure your compliance with a wide range of trade laws and regulations as well as Sarbanes-Oxley. They include:

Visual NAFTA™ - An advanced management software solution that helps you comply with NAFTA Rules as well as manage NAFTA certificates
Visual Compliance™ - Ensures compliance with U.S. export control laws, with functionality including Restricted Party Screening or Denied Party Screening and ECCN and ITAR classification
Visual Exporter™ - An all-encompassing export documentation solution for shipping goods around the globe
Customs IQ™ - A comprehensive solution for tariff classification and import duty management
Visual License™ - A license management system for U.S. Munitions List (USML) and Commerce Control List (CCL) goods and technologies
Visual Importer™ - A robust import compliance solution that gives you everything you need to manage your import process

Call eCustoms today at 1-877-328-7866, or send an email to info@eCustoms.com.