Cross-border trade and legal compliance

It is quite popular for the African Regional Economic Communities (RECs) to exchange goods and services, especially with the long-lasting goal of the African Continental Free Trade Area (AfCFTA) to create a single commercial market without unbreakable barriers. Commerce has become a major priority for these states after determining how profitable it is to entrepreneurs driving to the introduction of new strategies like digitalization to make the economy more manageable.

Every country has its own rules that oblige businesses and companies to follow regulations and shield themselves from unwanted litigations. Operating in multiple states further introduces complexities due to legal and regulatory framework differences. The situation arises on regulatory variation by examining aspects like data protection, anti-corruption, labor practices, and product safety, which are confusing and time-consuming. Legal complexity is a major challenge to the proper enjoyment of cross-border trading in Africa since it mandates precise compliance with regulations and payment of taxes.

As part of international commerce, individuals must abide by the legal essentials of other countries if they want to move across and supply their products which is a tedious and discouraging situation. The question comes; how can businessmen properly follow and easily catch up with these legal requirements to enjoy the fruits of cross-border trade in Africa?

Fully Complying with The Legal Needs

Companies should carry out comprehensive compliance risk assessments. The number one task is to evaluate possible legal risks ahead that could negatively impact the organization. This shall determine their vulnerable resources likely to be affected by a state’s competition laws. For instance, imported Smartphones in Tanzania require quality verification before the Fair Competition Commission (FCC) which performs search and seizure activities. Effective risk assessment and management efforts are therefore necessary to optimize operations even with risks and regulatory burdens.

Business men should conduct practical research on different commercial legal system. For instance they must know the permitted import goods and avoid bringing in prohibited goods. They ought to know the market they intend to do business with. Due diligence should be done in researching on the nature of the commercial state laws, the kinds of taxes and dues to be paid, and respective authorities they can report to in case of any problems.

“Traders need to pay close attention to the terms of the cross-border contracts.”

Moreover, there is need for consulting tax experts for insights on the dues to be paid. For example in Kenya, all non-residents need to pay taxes for their permanent activities. As companies trading across other states, they are obliged to keep abreast of regulatory changes and adapt to ongoing compliances changing day to day. Taxes tend to change in terms of their rate and the right sources of insights would be tax consultants who would provide insights on the important government levies (taxes) to be paid for.

There should be consultation to and hiring of commercial legal professionals. These experts will be responsible for proper advising on the way the business practices work in their territory. As explained earlier, Cross-border legal compliance demands a comprehensive understanding of each jurisdiction’s legal and regulatory requirements. Lawyers would be a great choice since they understand the key aspects that foreigners need to have before they step into their land. They will provide valuable insights and guidance on the local laws and regulations on Competition, Investment and Capital Market, and Securities Law that require proper and careful adherence.

Traders need to pay close attention to the terms of the cross-border contracts. These include agreeable delivery goods and applicable state laws, to avoid any future misunderstandings. Focus should be on what offer the contracting parties accepted, the payment methods, and the governing law to interpret the contract together with determining its enforcement. Reviewing the contracts entirely will mark full compliance with some legal factors present in the trading state.

Cross-border traders should self build a non criminal mind. They should avoid economic crimes such as tax evasion to make their business doings more peaceful. Not playing by the rules of cross-border or even international trade compliance can cost affairs by inviting heavy fine payments, and reputational damage. For example, in East Africa when goods are not paid as per the customs duty, they can be legally withdrawn from the hands of the owner (forfeiture). Not having a criminal mind pushes away any breaking of the laws and calls for nothing more than substantive and procedural compliance.

As much as cross-border compliance aims at ensuring organizations operate within the boundaries of the applicable legal framework and responsible business practices, it requires lessening its procedures to an easy and encouraging business environment capable of welcoming more traders. In regards to the suggestions above, a new way will be created to make business easily carried on for income generation at an individual and state level.