The Obama administration is pushing export growth as a way to rev up the economy and boost job creation. But if the results of a recent survey are any indication, the small and mid-sized U.S. companies that stand to benefit most from export growth need to educate themselves about the applicable regulations before they crank up their export engines.
The survey, conducted among mid-market companies by global trade management software provider Amber Road, found that these companies are increasingly at risk for violating U.S. export regulations. Of the 150 companies surveyed, 23 percent do not screen for restricted parties prior to engaging with trading partners and customers.
Of those survey respondents who do perform restricted-party screening, 30 percent do so manually using spreadsheets or websites. Two-thirds (66 percent) use manual processes to classify their products, opening the door to errors and inconsistencies. Of equal concern is that only 41 percent have a comprehensive export compliance program, and 20 percent have no formal compliance program in place.
Just over one-third (35 percent) of respondents have a management team that is somewhat aware of the regulations but has no involvement in the compliance process. In fact, survey respondents say a lack of executive sponsorship is largely to blame for their companies' trade compliance deficiencies.
According to a March 2012 U.S. Bureau of Economic Analysis report, U.S. exports grew 7.7 percent from January 2011 to January 2012. That's good news, yet it also raises concerns. "Mid-market companies in particular are increasing revenues by accessing foreign markets," said Scott Byrnes, Amber Road's vice president of marketing, in a statement. "Unfortunately, it appears that many mid-market companies aren't fully aware of the regulatory requirements governing global trade."
Click here to download the full results of the survey.