Who is responsible for compliance within your organisation?

If you are actively exporting vehicles, business often alternates between periods of intense activity and standstill. Commercial success does not come automatically. But once a deal has been closed, what happens next? Who is responsible for properly screening the buyer? And who ensures that the export file is completed correctly and in full?

The risk of delegation

In recent times, we have frequently encountered situations where sales representatives were responsible for conducting buyer due diligence and completing export documentation. Is that understandable? Yes. Is it advisable? No.

As an entrepreneur, you are always ultimately responsible. While it is neither possible nor necessary to do everything yourself, certain tasks carry risks that make delegation undesirable. Non-compliance often has no immediate consequences. However, if you become unintentionally involved in VAT fraud or money laundering, the issue may only surface years later. At that point, the sales representative involved may no longer be employed by your company, and reconstructing a complete export file retrospectively may be impossible.

Prejudiced

Assigning buyer due diligence (KYC/KYB) to sales staff creates a clear conflict of interest. Salespeople are incentivised to close deals. From a psychological perspective, this significantly increases the likelihood of overly positive assessments of buyers. A critical due diligence process can conflict with sales targets, often unconsciously.

The real risk emerges at the end

A similar issue arises when finalising export files. Once a deal is closed, the salesperson’s focus typically shifts to the next transaction. But is the file truly complete? Has the transport been properly registered? Has the final CMR been received? Without an independent final review, you may later discover incomplete export files that can no longer be corrected years after the transaction.

How should you organise your export processes?

Effective export process management must take these risks into account. Failure to do so may lead to issues during audits by banks, tax authorities, or other third parties such as auditors. Key considerations include:

• Separation of buyer due diligence

  As long as individuals assess their own work, unnecessary risks remain. The person conducting buyer due diligence must be sufficiently independent to challenge decisions and, if necessary, reverse an order.

  
  

• The four-eyes principle

  Implement a four-eyes principle whereby one person conducts the buyer due diligence and a second person verifies its accuracy. Depending on the size of the organisation, this second reviewer may be the director or owner.

  
  

• Trust is good, control is better

  The four-eyes principle should also apply to the completion of export files. File completeness should be assessed shortly after the transaction is finalised. This process must be firmly embedded within the organisation.

The cost of non-compliance can be substantial

No automotive entrepreneur enjoys implementing and maintaining compliance procedures. Nevertheless, the law stipulates that if you “knew or should have known” that a buyer was suspicious, you should not have proceeded with the transaction. This is a broad standard, and experience shows that failure to comply can have serious consequences—both for the business and for the entrepreneur personally.

How Novatrade24 can support you

Novatrade24 has one clear objective: to prevent its clients from becoming involved in VAT fraud or money laundering. Through the Novatrade24 platform:

• Independent KYC/KYB checks are conducted by Novatrade24.

• A unique buyer profile is jointly built within the trading community, based on all buyers and transactions, enabling better-informed export decisions.

• The platform guides you and your team to ensure that export files are always complete.

• Upon completion of the export process, a VAT-specialist-validated export file is delivered.

With Novatrade24, you structure your own compliance framework. You demonstrate that you have taken all reasonable steps to avoid situations where you “knew or should have known” that a potential buyer had malicious intent. At the same time, you save time, allowing you to focus on growing your business.

Would you like to learn what Novatrade24 can do for you? Contact us and we will schedule an introductory meeting or demonstration.