Navigating the complexities of global trade compliance is more crucial than ever. With the rapid expansion of international regulations and the ever-present risk of inadvertently violating trade sanctions, organizations must stay alert and ahead of the game regarding global trade compliance. And we’re here to help!
At Rethink, we know that compliance professionals can benefit from sharing insights and experiences and learning from each other. On June 4, Rethink co-hosted a global trade roundtable in Houston, Texas, to facilitate conversation about pain points, leading practices, and various trade compliance solutions.
Meet the facilitators and their discussion topics:
- Patrick Hays, Global Compliance Director at Dresser Utility Solutions
⁃ Topic: Resourcing and Structuring Your Program
- Ellen Smith, CEO & President of Amalie Trade Compliance Consulting
⁃ Topics: Mergers & Acquisitions Due Diligence and Third-Party Risk Management
- Lindsay Bernsen Wardlaw, Vice President of Trade Advisory Services, Amalie Trade Compliance Consulting, and adjunct professor of law at the Georgetown University Law Center
⁃ Topics: Trade Compliance Regulatory Volatility and Sustainability & Forced Labor
- Andrea Falcione, Chief Compliance & Ethics Officer and Head of Advisory Services for Rethink
⁃ Topic: Leading Practices in Training Development and Delivery
The Importance of a Proactive Approach
Trade compliance is a dynamic and changing field, especially now, and is influenced by geopolitical events and tensions, as seen with sanctions related to Russia. Many organizations have discovered just how deeply sanctions and export controls are interwoven with broader compliance and enterprise risk in their operations.
If your organization is actively aware of its risks, it can more quickly and efficiently handle issues when they arise. For example, attendees discussed developing a plan if goods are delayed due to the Uyghur Forced Labor Prevention Act (UFPLA) or other export issues. Another hot topic involved technology tools, including those with emerging AI technology, to help gather and verify data on your partners — and their suppliers — worldwide.
Regulatory Volatility
Unpredictable situations in global trade highlight the need for compliance departments to avoid operating in isolation. Your global trade compliance team must have a full and accurate understanding of your operations worldwide.
Attendees shared stories of developing interdepartmental relationships and setting up quarterly working groups to more fully understand their operational landscape and be better prepared to respond to emerging trade compliance requirements (or crises!). These stories included how and why global trade compliance should be part of planning during mergers, acquisitions, and divestitures. Such strategies help construct a more resilient compliance framework to better weather regulatory volatility.
Mapping the Supply Chain and Managing Third Parties
The consensus among attendees was clear: Every organization needs an in-depth understanding and mapping of its supply chain. This includes identifying direct suppliers and gaining visibility into the broader network that contributes to your final product or service. With forced labor and sustainability becoming focal points, organizations must know specifics about every vendor, partner, and other third party with which they do business.
Gathering and keeping up with that data can be extremely challenging. Often, there isn’t sufficient visibility to gather enough information, and the tools available just guesstimate. Or organizations are forced to simply rely on the responsiveness and honesty of suppliers. And keeping up can be difficult because supply chains constantly change—so what you map one day might change the next.
Cultivating a Compliance-Aware Culture
One of the most significant challenges often faced by compliance departments is creating an organizational culture that values and fosters active participation in global trade compliance practices. The stakes are high, and errors can have severe consequences.
Attendees discussed the need for balance in training and communications on processes and risks in global trade compliance. In some organizations, effectively engaging employee populations to manage specific risks in global trade compliance takes a lot of work. In other organizations, overreacting to risk is a problem, and it can desensitize an organization to actual risks in favor of false positives.
Best Practices for Training
Attendees agreed that training on global trade compliance should be informative, engaging, and relevant. Most reported that their annual compliance training includes high-level information about their organization’s global trade compliance risk. Employees in higher-risk roles—including sourcing, supply chain, sales, and procurement—receive more in-depth training.
For organizations operating globally, regardless of size, the trade compliance landscape is complex and demanding—yet it offers opportunities, particularly for those organizations willing to invest in proactive measures, technology, and a culture of compliance. Proactive organizations better safeguard themselves against potential legal and financial repercussions and contribute to more ethical and sustainable global trade practices.
