The path to successful cross-border eCommerce – Why compliance is crucial and how you can protect your business.

Compliance has always been a requirement for any business, but in recent years the Bureau of Industry and Security (BIS) and Office of Foreign Assets Control (OFAC) have started actively monitoring the compliance of businesses trading in the US.

Businesses that have been found to have compliancy violations have their cases made public, to deter others from falling foul of the rules. In fact, recent statistics showed that Denied Parties violations accounted for 66% of fines given out.

No business is too big for compliance

Denied Party screening must be done by every business, regardless of your size, location or which process of the transaction you are involved in.

Most recently, Apple fell foul of the rules and were found to have violated the Foreign Narcotics Kingpin Sanctions regulations by entering an applications development agreement with a Slovenian company whose director and majority owner were designated under the Foreign Narcotics Kingpin Designation Act.

They were ordered to pay US$476,000 for this infringement, in which their screening systems failed to match ‘SIS DOO’ and ‘Sis d.o.o’(D.o.o is a standard corporate suffix in Slovenia identifying a limited liability company), showing that even the top companies struggle with screenings.

Marketplaces at fault

Also guilty of Denied Party failures were Amazon, who admitted to selling goods to individuals in Crimea, Iran and Syria between 2011 and 2018. Although the violations were viewed as ‘non-egregious’ by OFAC, they were still fined $134,523 which amounted to half the value of the transactions.

Small failings in the ability of the screening process to identify spelling mistakes such as ‘Krimea’ in place of Crimea led to further violations and low-value goods being sent to Cuba, North Korea, and Sudan. By admitting to these failings, Amazon were subject to lighter penalties than would normally be given for such large violations.

Individuals are just as responsible as businesses

Although Denied Party screening can be considered more important as the penalties are more severe, a lady attempting to import a crocodile skin handbag into Australia found out the hard way that certain restrictions apply to goods being imported when her handbag was destroyed.

Worth $19,000 the owner did not pay a $70 licence to import it, and although not illegal, crocodile products are controlled under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) to ensure they are not linked to the illegal wildlife trade.

The above examples show that compliance is not an option, and even the biggest companies in the world can fall foul of the rules.

Having an effective screening process in place can minimise the risks associated with cross-border eCommerce.

Hurricane’s Denied Party and Prohibited and Restricted Goods screenings ensure businesses know what they are selling to who and where maintaining compliance and reducing the risk of fines and severe penalties.

Hurricane is quickly becoming the go to data partner for cross-border eCommerce by providing cost-effective solutions that have been built to provide the ultimate customer browse, checkout cost transparency and cross-border delivery experience.

The path to successful cross-border eCommerce – How Hurricane’s solutions can help you successfully trade cross-border.

Cross-border eCommerce can provide any business with the opportunity to expand and open their business up to more markets and customers. Whilst this sounds like a fantastic proposition, there are many issues to contend with when first starting out.

There has recently been a large increase in the amount of regulations and compliance rules that are being introduced and monitored, which are often missed by smaller businesses who may not have any previous experience with customs.

There is a sharp focus on knowing what you are sending, and who you are sending it to.

Unknowingly sending an item into a country that requires a licence or sending goods to a blacklisted customer will end up with a business facing fines, and goods being destroyed.

Hurricane has developed 3 main solutions to help businesses stay compliant, and successfully expand their business into cross-border eCommerce.

They are Import Duty and Tax calculations, Prohibited and Restricted Goods Screening and Denied Party Screening. Below we show what these solutions do, and how they can help your business navigate cross-border eCommerce.

Duty and Tax

Every product has a duty and tax rate applied by individual customs upon importation. Individual countries also have their own deminimis levels, which are the values under which products do not have any duty or taxes applied to them.

It can therefore be difficult to calculate the duty and tax rates applicable in checkout. Hurricane’s duty and tax calculator allows businesses to show their customers the total cost of any purchase, drastically reducing negative customer experiences and customer churn.

Prohibited and Restricted Goods

Each country’s customs have their own rules on what can and can’t be imported, and whether special licences or permissions are required. Having carried out deep analysis of restrictions and requirements for importing, exporting and transporting goods in 154 countries, covering 97% of global GDP, Hurricane provides feedback on prohibited and restricted codes. Hurricane’s screening prevents goods from being wrongly transported or imported, ensuring there are no compliance slip ups.

Denied Party Screening

Denied Party Screening is becoming crucial for any business trading cross-border as punishments become more severe. Hurricane’s screening allows businesses to see if their customers and partners are on any of the global denied parties lists, allowing you to control who you sell your products to.

Compliance is key

Transparency is key to providing a positive customer experience. It is incredibly cost-effective and affordable compared to fines that can be given due to non-compliance.

Hurricane can also be a key selling point for your customers, as they will know that all costs will be paid upfront and transit times will be reduced.

Contact us to find out how Hurricane can help your business navigate the uncertainties of cross-border eCommerce.

Hurricane Tamebay Webinar

Hurricane Commerce signs up for Tamebay Live Show

We are delighted to be a main sponsor and speaker at the first ever Tamebay Live.

The 5-day virtual event in May is set to be a great new addition to the calendar for retailers, brands, marketplaces and anyone else involved in the fast growing world of eCommerce.

More than 30 workshops and a host of masterclasses have been lined up from May 17-21 with each day having its own theme.

Hurricane is the headline sponsor and co-host for Day 1, called ‘Back to Basics’, and will then be a speaker on Day 4, which is all about Cross-Border selling.

Martyn Noble, Hurricane’s CEO, said: “Tamebay have come up with an innovative and hugely timely event that will give retailers, brands and others involved in eCommerce plenty of food for thought and inspiration.

“We are thrilled to be playing a leading part and, particularly, look forward to sharing knowledge and ideas that will help anyone looking to grow their sales internationally.

For more information about Tamebay Live and to register to attend visit https://tamebaylive.com/

Please also keep an eye on the Hurricane website and LinkedIn for further details as we run up to this hugely exciting conference.

The path to successful cross-border eCommerce – What’s the opportunity and how can you get a piece of it?

Cross-border eCommerce is becoming more accessible to businesses, ranging from small scale independent stores to multinational giants.

Facilitating this surge in cross-border eCommerce are platforms like Magento® an Adobe company, which accounts for 16% of all eCommerce websites. They include some big names like Coca-Cola and Christian Louboutin.

Platforms like this offer a huge opportunity for a business to create a site and get trading quickly, especially with a host of extensions that allow businesses to manage their stock, create labels and provide a better customer experience. Magento alone has over 250,000 sites and saw an increase of 7,500 in 2019, covering a total of $155 billion in total merchant sales.

Risk and reward

With 57% of all online shoppers buying cross-border, the prize associated with using an eCommerce platform is large. This does however also expose your business to the risks associated with cross-border eCommerce, such as parcels being seized by customs due to poor data, or customers being charged extra upon delivery due to import duties and taxes not being paid.

These situations can lead to a negative customer experience which can result in customers making a one-time purchase then shopping elsewhere. With businesses able to earn 50% more revenue if 40% of their customers are returning, it is important to understand the issues surrounding cross-border eCommerce and ensure your business is prepared.

The Hurricane solution

Hurricane has developed a suite of solutions that allows businesses to show their customers the total cost of any purchase inclusive of shipping, import fees and any extra costs, as well as screening for denied parties and prohibited and restricted goods to ensure total compliance.

Hurricane has become a Technology Partner with Magento, one of the leading eCommerce platforms and will give their customer base the cost-effective and user-friendly tools needed to successfully trade cross-border and reduce the risk of fines and negative customer experiences.

With customer experience becoming the main differentiator between brands, surpassing pricing and the products, providing a positive experience is crucial.

Hurricane’s cross-border solutions will provide businesses with an engine for growth by improving the customer experience from the first site visit, all the way to the delivery, thus increasing the likelihood of them making repeat purchases, and making businesses fully compliant with customs and import regulations.

Hurricane to be Gold Sponsor at WMX Asia

Hurricane is delighted to announce that it will be a Gold sponsor at The World Mail & Express Asia Conference, taking place in Bangkok, Thailand, from the 1st to the 3rd of November 2021.

This prestigious annual international event brings together leaders in parcel and mail world, providing great opportunities for networking, gaining industry insights and doing business.

As a Gold sponsor, Hurricane will not only be exhibiting, but CEO Martyn Noble will also be speaking about some of the major regulatory changes impacting the postal and carrier industry and the importance of quality data in enabling seamless cross-border eCommerce trade.

Hurricane will be attending the event with Chinese partner ELI Holdings, who are helping us to develop our links in China and the wider Asia Pacific region.

We are looking forward to showcasing Hurricane’s data enhancement technology at WMX Asia, a region that is at the epicentre of global eCommerce trade.

For more information on the event and Hurricane follow the link below:

WMX Asia Conference

Hurricane Tamebay Webinar

Hurricane to discuss impact of March 2021 regulations in Tamebay Webinar

March 15th should be etched in the diaries of anyone involved in cross-border eCommerce.

Two major regulatory events – the US STOP Act and ICS2 – come into force on this date.

Both will require cross-border traders to ensure they are providing complete and valid electronic data on their parcels.

Without it, several hundred million parcels are likely to get stuck at customs leading to increased costs, delays and, worst of all, reputational damage with customers.

The Tamebay webinar on March 15 will hear from Hurricane’s Martyn Noble and Bram Buijs. They will explain more about these and other regulations impacting cross-border eCommerce in 2021 and, crucially, what it means for businesses.

We’ll explain the critical importance of having complete and valid data (including HS6 codes, product descriptions, country of origin etc.) and also ensuring you are screening effectively for prohibited and restricted goods and so called denied parties.

This webinar is a must watch for merchants, marketplaces, carriers and anyone else involved in the cross-border supply chain.

To register for this event, follow the link below –

 

Hurricane and ELI launch new China website

Hurricane Commerce and our Chinese partner ELI Holdings have launched a new dedicated Chinese website to enable Chinese businesses to learn more about our suite of APIs.

Hurricane has teamed up with ELI to provide Chinese eCommerce and logistics companies with the tools and technology to enable them to trade cross-border successfully and seamlessly amid tough global regulatory requirements.

Among these regulations is the US Stop Act which requires all mail parcels to have complete and valid advanced electronic data (AED) to pass through US customs.

The UK and EU are also removing the exemption from VAT on eCommerce packets containing low value items while, in March 2021, the implementation of ICS2 will require postal operators to provide entry summary declarations before parcels can pass into or through the EU.

The demand for services that allow businesses to continue trading cross-border is soaring, with the need for compliance screenings, cost transparency and accurate and complete customs declarations. The need for accurate data is becomingly increasingly important and is becoming key in providing a positive customer experience by reducing transit times and the risk of unexpected fees upon delivery.

Nothing moves without the right data and increasing global regulation is providing huge challenges to those involved in cross-border eCommerce trade.

Hurricane is the preferred data partner for postal operators, online retailers, eCommerce platforms and carriers.

Contact us to find out more about our suite of APIs and how they can benefit your business.

The dedicated Chinese site can be round at this address – http://www.hurricanecommerce.cn/

2021 – a year of huge change for cross-border eCommerce

If 2020 was the year of the Coronavirus pandemic, for those involved in cross-border eCommerce trade 2021 will be the year of sweeping regulatory change.

The changes come thick and fast, starting on January 1 with Brexit and the full enforcement of the US STOP Act.

Both make the provision of complete and valid customs clearance data absolutely essential.

Ten weeks later will see the implementation of Import Control System 2 (ICS2) requiring postal operators to provide entry summary declarations on goods into or through EU customs territory.

As if that was not enough to occupy the minds of everyone involved in cross-border trade, both the UK and EU are removing the exemption from VAT on low value items.

And there is also the launch of the EU’s Import One-Stop Shop (IOSS) for retail merchants and marketplaces to contend with.

Combined, this plethora of regulations – all impacting in the first half of 2021 – will test postal operators, carriers, merchants, marketplaces and platforms to the absolute limit.

We know from our work with customers across all of these different segments of cross-border trade that some have invested the time and resource to get prepared for January 1.

They have tackled head-on the knowledge that the compliance landscape will look very different in just a few days’ time to what they had been used to.

For postal operators, good planning and preparation in terms of data enhancement means avoiding the nightmare scenario of parcels being stuck at customs resulting in huge delays and additional costs including warehousing, storage and returns.

For merchants and marketplaces, meeting the higher threshold for parcel data will be essential if they want to ensure the frictionless passage of goods to their end customers. Failure to do so will inevitably result in lost customers and reputational damage.

The final quarter of 2020 has seen increased activity among those whose businesses depend on seamless cross-border trade as the realisation dawned that January 1 really was going to mean a different way of doing things.

And while events like Brexit grab many of the headlines, the reality is that some or all of the regulatory changes outlined above will impact the way different postal authorities, carriers, merchants and marketplaces – irrespective of geography – conduct their business in 2021 and beyond.

Below is a recap of the big changes coming in 2021 and their timescales:

January 1 – Brexit: complete and valid data (including HS6 codes, product descriptions and correct values) will be required from the UK into the EU and vice versa.

January 1 – UK Import VAT Threshold: New regulations will make an overseas supplier who sends parcels containing goods valued at £135 or less to the UK responsible for paying any import VAT that is due.

January 1 – US STOP Act: the USPS has made it plain that from this date parcels will be refused entry into the United States and returned to origin if they do not meet the higher threshold level for advance electronic data (AED).

Martha Johnson, a spokesperson for the USPS, said: “Postal shipments containing goods not accompanied by AED will be considered inadmissible.”

March 15 – ICS2: Postal operators will no longer be exempt from having to make entry summary declarations into the Import Control System before moving goods into or through EU customs territory.

Under ICS2, shipments without the right data will no longer be allowed with the likelihood of severe delays in customs and increased costs.

July – EU VAT Exemption Removal: Abolition of exemption from VAT on low value items under €22. The changes mean that EU and non-EU sellers will charge VAT at the point of sale for consignments of €150 or below.

July – Import One-Stop Shop (IOSS): Modernising of VAT for cross-border eCommerce via the Import One Stop Shop (IOSS) making the retailer, web shop or marketplace liable for the declaration and payment of VAT to the country of destination.

Hurricane Commerce was founded in 2016 to provide customers with industry-leading solutions to changing and evolving regulations and laws impacting cross-border eCommerce trade.

From this starting point, we have created our lightning quick Zephyr API which enhances the quality of parcel data.

Zephyr can process over 700 million requests a day and can, on an item by item API call base, provide for a real time feedback with response times of 100 milliseconds. The screening of a file consisting of a maximum of 10,000 items that is sent to Hurricane takes no more than 15 minutes.

Meanwhile, our Aura API covers the three areas of duty and tax calculation, prohibited and restricted goods screening and denied parties screening.

An API call via Aura is super-fast with throughput tested at 640 transactions per second. One single call can perform these three critical cross-border functions, presenting the data back in real-time.

To find out more about Hurricane’s solutions, contact sales@hurricanecommerce.com.

 

Hurricane in the media:

CEP Research – 2021 will be a year of huge change for cross-border eCommerce

Tamebay – Regulatory change to test cross-border traders in 2021

 

Freightwaves highlights “speed and efficiency” of Hurricane technology

Freightwaves’ American Shipper has described how Hurricane’s technology “will foster speed and efficiency” and help postal operators meet the regulatory requirements for advanced electronic data (AED) from January 1, 2021.

The leading logistics media platform highlighted Hurricane’s game-changing Zephyr API solution in an article looking at the likely impact of the enforcement of the US STOP Act.

Freightwaves stated: “Effective Jan. 1, the U.S. government will refuse to clear international mail parcel shipments if electronic documentation allowing U.S. Customs officials to check for illegal opioids isn’t transmitted in advance of the shipment’s arrival. Despite having more than two years to prepare, the international postal supply chain will likely miss the deadline.”

According to the OIG, Posts in 135 countries and territories were still unable to send AED to the USPS as of March this year.

The USPS has made it clear that as of January 1, complete and valid customs clearance data will be mandatory – otherwise parcels will be refused and returned to origin.

Freightwaves went on: “Hurricane Commerce, an IT provider that specializes in cross-border e-commerce trade data and compliance technology, warned in a Nov. 16 communique that, unless the situation changes, hundreds of millions of parcels will be denied entry into the U.S. and may be returned to their origins. “This kind of volume will not only create immense logistical challenges but will also have a serious impact on air cargo capacity,” said Hurricane Commerce CEO Martyn Noble.

“Earlier this year, Hurricane Commerce launched a product called Zephyr, which it said allows bulk clearance facilities to check the accuracy of data and to receive additional pertinent or missing information all under one “quick-check” function. Zephyr can process over 700 million requests a day and can provide for real-time feedback with response times of 100 milliseconds, the company said.”

The article concluded: “There is cause for optimism. The UPU, U.S. and EU requirements will push international posts to accelerate AED compliance. USPS and other international posts are helping less-advanced nations by providing technical and financial support. New technology — such as that being offered by Hurricane Commerce — will foster speed and efficiency.”

Read the full article https://www.freightwaves.com/news/opioid-crackdown-deadline-for-international-mail-on-brink-of-miss

Hurricane makes the news around the world

Hurricane Commerce has been making headlines across the global postal and logistics media.

Leading publications including Parcel & Post Technology International, Air Cargo, Post & Parcel, the Handy Shipping Guide, Lloyds Loading List and The Loadstar have all carried articles looking at the likely impact of Brexit and the US STOP Act on cross-border eCommerce trade after January 1, 2021.

The Loadstar article focussed on Hurricane’s warning that as many as 700 million mail items could be rejected for not having the complete and valid advance electronic data required under the STOP Act in just 30 days’ time.

This was confirmed by Martha Johnson, spokesperson for the United States Postal Service (USPS) who told The Loadstar: ““Postal shipments containing goods not accompanied by AED will be considered inadmissible.”

To read The Loadstar article in full visit https://theloadstar.com/tougher-us-drug-legislation-set-to-derail-millions-of-parcels-on-1-january/

Meanwhile, Hurricane’s Chief Content and Compliance Officer, Martin Palmer, has been quoted at length discussing the looming “chaos” of Brexit on the cross-border shipment of eCommerce parcels.

Martin said: “This is not just about the UK and trading into the EU; it is also about the remaining 27 EU member countries and their cross-border trade into the UK.”

Read Martin’s thoughts in full on the Post & Parcel website –

https://postandparcel.info/127999/news/e-commerce/hurricane-commerce-time-is-running-out-to-get-brexit-ready/