There are a number of major trade regulation changes coming in 2014, unprecedented in both number and magnitude. These shifts affect every company that imports into, or exports from, Canada or the U.S., with some regulations requiring new licensing and others mandating significant software updates. Livingston International reports that the most noteworthy are the following:
Food Safety Modernization Act (U.S.): This policy requires companies to change registration processes for domestic and foreign facilities, as well as comply with added certifications for food safety. Food importers will need to contend with added food safety certifications because there will be more rigid requirements to identify their foreign suppliers.
Canadian Food Inspection Agency (CFIA) Inspection Modernization Program (Canada): CFIA is developing a more comprehensive inspection approach across all imported and domestic food commodities – for both interprovincial and international trade. All regulated companies will need to obtain an Imported Food Sector Licence, and CFIA will conduct more inspections and enforcement for non-compliance. In addition, the types of regulated commodities are expanding. While currently only importers of meat, fish, dairy and eggs are regulated, the new program regulates all other food commodities, including coffee, baked goods, spices, infant formula, snack foods, meal replacements and others.
Single-Window Initiative (U.S., Mexico and Canada): This initiative applies to any goods coming into or leaving the U.S. It requires shippers to interact with approximately 40 different partner government agencies through a single web-based interface system. Companies must transition from a paper-based process to a digital one to meet the initiative’s goal of increasing real-time tracking and visibility of shipments. It begins rolling out in 2014, and when it is completely implemented, shippers will know the status of their shipments from the partner government agencies more quickly and benefit from decreased wait time and exam costs.
e-Manifest (Canada): All shipments into Canada must be declared electronically before arrival. This requires new software and IT upgrades to ensure compatibility with the new system; otherwise, companies risk an additional duty fee at the border.
“Although these updates will make the customs process smoother and more up-to-date, it is unprecedented to have this many major trade regulation changes implemented at the same time,” says Matt Goodman, Vice-President of global trade management, with Livingston International. “To manage this level of change, investing more time now is necessary for businesses to meet these new requirements that take effect next year. Managing trade compliance is undeniably an investment, but it is offset by reducing the risk of costly audits and fines. Livingston’s global trade expertise uniquely positions us to help companies successfully navigate through these changes.”
These major regulatory changes will affect small- and medium-sized businesses more, because they rarely have trade compliance expertise in-house.