Enterprises are encountering more difficulties in cross-border trade in the turbulent global trade environment
Recently, enterprises are faced with increasing difficulties in cross-border trade management, and uncertain risks on global development. The COVID-19 pandemic is still not under effective control globally. Global trade environment is volatile, showing a trend of trade protectionism. All countries are enforcing more and more stringent market oversight and regulation. Geopolitics are increasingly complex as a result of, among others, Sino-US trade conflicts, Brexit, regional tariff and non-tariff barriers to trade, and US export controls. In the meantime, there are potential risks such as intellectual property protection, national security and information security.
To maintain sustainable development in such a rapidly changing international trade environment, enterprises are in dire need of following policy and regulation trends, acclimating to digital transformation, and enhancing capabilities against risks, so that they are able to fit in the complicated supply chain environment and meet ever-changing consumer demands.
How to deploy a flexible and resilient model for global trade operations?
From our standpoint, enterprises should focus on the following three aspects for economic recovery after COVID-19:
Achieve supply chain continuity and global trade compliance
- Evaluate the impact of global trade compliance: Inspect global trade regulation changes and temporary exemptions/restrictions, identify cyber security threats, and consider the influence of transfer pricing adjustment on customs valuation.
- Facilitate cross-border trade: Follow and manage constantly updated import and export requirements, avoid supply chain disruptions, and pay attention to financial impact and global trade compliance risks.
- Achieve supply chain continuity: Control the effects of supply chain disruptions on trade, and flexibly adjust the risk assessment plan to manage new compliance challenges; continuously monitor key performance indicators to measure regulation compliance and operation performance, and especially for those enterprises who shift their supply chains to new countries or regions, so as to quickly comply with local customs requirements and cross-border trade regulations.
Improve efficiency and mobility
- Assess global trade strategy: Specify clearly responsibility management mechanism, determine the influence of transfer pricing adjustment on customs valuation, and utilize preferential trade agreements.
- Recognize opportunities to improve trade operations: Review related third-party cost and trade activities that can be outsourced to recognize opportunities for cost saving; proactively consider and apply robotics process automation (RPA) and other technology solutions.
- Utilize technologies: Explore the technology solution of reducing trade cost through the SAP Global Trade Services (SAP GTS) automatic process, lower financial cost through tariff concession by utilizing multiple FTAs’ policy benefits, and enhance the competitiveness of selling products with zero tariff.
Strive for excellence in global trade operations
- Accelerate digital transformation of global trade operations: Adopt regulation monitoring solution, deploy SAP GTS trade management software, and leverage the utmost of its advanced analytics.
- Achieve process efficiency: Enable electronic customs clearance, and strengthen global trade document management; achieve process automation with the use of artificial intelligence and RPA solutions.
Compliance, efficiency improvement, cost reduction, and acceleration – it has always been the goal of Deloitte and SAP collaboration to improve clients’ competence in global trade management.
We suggest that enterprises in the current environment should exert more efforts than ever before to break information barriers in every aspect of global trade, identify and prevent risk points of global trade compliance, and maximize efficiency at a minimum cost.
As a response, Deloitte offers one-stop global trade services, including SAP GTS-enabled Smart GTS, a flexible and efficient solution for import and export trade business. Smart GTS won the Global Service Practice Case Award at China International Fair for Trade in Services 2020, and was also awarded the SAP Industrial Internet Innovation Solution Certificate in 2019.
Prominent features of the system:
- The digital service system breaks the information barriers in global trade, enables the flow of corporate supply chain data to external suppliers and regulators, and realizes automatic generation and management of customs declarations and accompanying documents which will then be transmitted to the customs broker or the customs single channel, so as to accelerate the customs clearance process and decrease the error rate through process automation;
- The compliance management module is equipped with functions including license management, and scanning of blacklisted and embargoed countries, enabling enterprises to conduct trade compliance check and automatic risk control over export controls, license requirements and other common issues relating to international trade, and thus reduce relevant compliance risks; and
- The free trade agreement (FTA) management function can help enterprises determine the rules of origin, and conduct FTA planning and management in the system, so as to fully and efficiently utilize preferential tariff treatments under FTAs and lower business cost.
Serving as a “direct train” to global trade, Smart GTS helps import and export enterprises achieve compliance, cost reduction, intelligence, and synergy for global trade management in the increasingly complex international trade environment, and thus implement their global development strategies.
SAP GTS has been successfully deployed in nearly 3000 enterprises in 25 industries and more than 170 countries. Deloitte GTS has world-leading technology solutions and extensive implementation experience in compliance, customs and preferential trade agreements, with trade and customs advisors, as well as technology and SAP GTS implementation specialists spreading across the world. Therefore, we are able to assist numerous enterprises to keep going and growing.
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Tax & Business Advisory Services Partner
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Consulting SAP Service Line Partner
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Tax & Business Advisory Services Partner
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Greater China Chief Risk Control & Compliance Solution Expert