- the practice of basing some of a company's processes or services overseas, so as to take advantage of lower costs.
In today’s fast-paced and ultra-connected world, many companies are offshoring aspects of their business to cut costs. This is all fine and good when those savings are passed on to you, right?
Or is it?
A little offshoring here and there might seem to pose no problem at all – many reputable companies do so to good effect. The customer saves money and the work is of acceptable quality. But this may just be wishful thinking – or best-case-scenario stuff.
Unfortunately, the knowledge of an offshore company and therefore the quality of their work are often not up to par. If this affects your customs compliance and your customs standing over the longer term, it could spell disaster for your company.
What’s the story with offshoring?
We touched on this topic in a previous blog – as have other customs brokerages in recent months – but it bears a second look, due to the ongoing uncertainties around some of our trade agreements and because it’s an issue that’s gaining steam.
Whereas U.S. laws prohibit a customs broker from offshoring customer data, Canadian laws do not. If your valuable customs data is in the hands of a foreign company located in a faraway land, how much control do you really have over it? Also, the knowledge of the offshore staff is unlikely to match that of a local broker who has an intimate understanding of Canadian customs requirements and the nuances of your business.
And finally – if you needed further incentive to ensure the quality of your customs entry data – here’s another thing: In response to a recent Auditor General’s report finding the CBSA is losing tens of millions in revenue due to goods being misclassified, CBSA has agreed to review its penalty system for non-compliance. This, in addition to the introduction of new import tariffs and surtaxes, will almost surely mean increased scrutiny at the border and increased costs for customs errors.
Is it worth it?
Because the burden of responsibility for compliance rests with the importer, it’s extremely important that you have complete trust in your broker to meet your needs. A quality customs broker knows your business and has an intimate understanding of the regulatory environment you're operating in.
You can rest assured that our customs professionals never offshore client data. Our experienced brokers are based right here, with offices all over North America, and we work closely with our clients to understand and meet their needs. We are happy to answer your questions about this or any other aspect of your business.
Information provided by: Canadian Customs Brokerage Dept. - Cole International