Overcoming trade compliance risks in the supply chain

For managing supply chain compliance requirements efficiently and effectively, companies require access to information; avoid trade compliance risks along with the ability to scan the horizon for new and rapidly emerging requirements

Increased stakeholder expectations, along with heavy fines because of non-compliance with environmental regulations, have delayed market access. Also, there are several overlapping product integrity requirements, which organizations must navigate in today’s dynamic global supply chain compliance landscape. The struggle with managing trade compliance risks has now become more evident as organizations are taking a deeper dive into core issues they face.

When it comes to trade, for instance, along with opportunities that come with new markets for products, there also arises the challenge of staying abreast of a wide array of complex regulations in other countries. In the same way, companies bringing raw materials or finished products into markets often need to contend with a rapidly changing array of import requirements. What the supply chain industry, therefore, requires today is a strong program to mitigate trade compliance risks, which includes a formal process for identifying and responding to import and export requirements for ensuring that regulations are met consistently across the organization.

As it is necessary to understand trade compliance issues in order to avoid exposure of the company to new and serious risks while they undertake a digital business initiative, let’s take a look at the process for overcoming these trade compliance risks.

Ask Questions

• For protecting the supply chain and the organization, CIOs and CFOs can meet with the trade compliance team for ensuring that all controls are in proper place. They must address the following questions:Has the company conducted a risk assessment regarding impacts of trade compliance to digital business?
• Are new digital products manufactured by the company subjected to any government restrictions or laws?
• Does the company have proper controls in place for limiting access to digital products and information?
• Has the company properly classified new digital products?
• Does the company require an export license for shipping the product?

It is better to address these questions before an actual problem arises. If a company violates the import and export laws, they may have to pay heavy fines, face imprisonment, or revocation of export privileges depending on the gravity of the issue.

Include Professionals for Overcoming Trade Compliance Risks

Organizations must start by including trade compliance professionals into the process of digital business strategy planning. This will make trade compliance professionals understand the impact of the goals of the digital business initiative.

Conduct Training Sessions

Today, the supply chain industry is also dealing with the ever-changing rules of various customs agencies, which is causing even more confusion. In such a situation, employees of an organization should understand how their role and activities can change due to the transformation to a digital business. The organization can conduct training on trade compliance issues annually, and the training must include new content for addressing digital business. Trade compliance professionals can also be a part of the content creation. An increase in the frequency of communication is required for conveying the overall digital business strategy, expectation, and goals to the employees.

By following these guidelines, you can create a harmonized and integrated enterprise compliance program that consists of appropriate supply chain risk-management activities that facilitate adherence to compliance requirements by a business.