Global compliance consulting is soaring because businesses are expanding to global markets faster than ever before. The Internet makes it possible for businesses to begin expanding into new markets and test the validity of expansion.
However, it’s easy to overlook global export compliance, too.
What Is Global Compliance?
Global compliance comes into play in every market. For example, a US-based company expanding into France will need to adhere to:
- French laws
- French regulations
A prime example of compliance differences is the food industry. In Europe, the list of banned chemicals and ingredients differs from the United States. Corporations must adhere to these compliance differences and often sell products under the same name in the US and France with different ingredient lists.
You may also have to adhere to different financial reporting requirements, employee entitlements, etc.
This is why global compliance field research is crucial to expanding into other markets.
Why Is Compliance Important?
Compliance is important because when you enter a new market, you’re responsible for following all:
- Laws
- Rules
- Standards
- Regulations
If you fail to consider compliance, you risk being fined and prevented from doing business. Unfortunately, compliance failure is seen as a liability. However, thanks to compliance guidelines, it’s also easier to enter new markets smoothly because there are standards that must be followed.
Risk of Not Remaining Compliant
Global compliance can make or break your business’s expansion into new markets. Therefore, it’s crucial for you to work with a compliance expert or to have an in-house team that ensures that you meet all compliance requirements.
Otherwise, if you break compliance requirements, you may suffer from:
- Severe financial consequences and having to stop operations. Fines and penalties can be extensive and be so severe that you have to cease operations.
- Loss of licenses that allow you to operate in a country. It can be immensely difficult to get licensed in the future if you have licenses revoked for any reason.
- Contract breaches. You may be liable for any breach of contract and terms that you agree to for breaching said contracts. Since it is your responsibility to ensure that you maintain global compliance, breach of contract can lead to court hearings, fees and additional penalties.
Additionally, not adhering to compliance requirements can lead to a tarnished brand identity that makes it more difficult to expand to other countries in the future.
If you want to maintain global compliance, you must take a multi-faceted approach to ensure compliance. First, review all of your current practices to outline areas where compliance may become an issue. Next, create a plan to address all of these issues and train employees on the new required changes.
Working with a consulting firm or partner that specializes in global compliance is the easiest way to remain compliant.
Consultants will work to review your practices, know the compliance requirements of the new country you’re entering and then ensure that you remain compliant. Since these rules may change over time, it’s in your best interest to have procedures in place to conduct routine reviews and change practices as necessary.