TradeCompliance-as-a-Service (TCaaS): A Reference Architecture

Globalization and extension of the Supply Chain are the emerging market trends driving the competitive International business. There has been a strategic shift to seek product and process cost reductions by outsourcing capital and labor intensive activities to global partners down the value chain. As a result, companies are engaging in direct sourcing and offshore production/distribution of products through third-parties in low-cost countries.

With this trend, there is a need to:

• Effectively manage and monitor the cross-border movement of goods and reduce the indirect costs associated with them in the form of standard duties and applicability of preferential trade programs.
• Effectively manage product classification and management.
• Be compliant with the ever-growing complexity of each country’s trade rules and regulatory requirements for restricted-party screening, embargo checks and licenses.
• Manage brokers/third-parties for trade document preparation, freight payment and shipment resolution.
• Establish effective means of communication with the Government authorities to provide accurate import and export control information.

While trade compliance is a core business process for Customs, a significant amount of the burden of compliance is placed upon importers. The stakes are often high for a company found to be noncompliance, as Customs continues to measure company compliance through intensive cargo exams on a more frequent, ongoing basis. This process can significantly disrupt a company's "just-in-time" delivery program.

Cloud-based Global “Trade-Compliance-as-a-Service” Solution is a decision support system that can provide a centralized repository of the world-wide Global Trade Content and can handle ever-changing complex import/export compliance guidelines. The solution can integrate seamlessly with the enterprise ERP systems to provide real-time restricted party screening, embargo checks, import/export license management, product classifications, customs invoicing and integration with brokers and customs authorities for reporting the cross-border movement of goods.

The automated end-to-end cloud delivery model for trade compliance solution provides a streamlined approach to the import and export regulatory processes for all the orders placed across all the trading countries. Other benefits of the solution are:

• Reduced inventory and supply chain costs through effective export and import processes.

• Accelerated outbound deliveries through automated trade compliance.

• Accurate tariff and duty rate calculation through correct product classification and license decisions.

• Assured compliance to the government regulations and timely availability of accurate information and export/import documentation for audit purposes.

• Streamlined electronic communications with customs authorities.

• Effective controls for cross-border transactions in accordance with Sarbanes-Oxley (SOX) requirements.