Person of the Year: The Trade Compliance Officer

I admit I may be a little late in completing some of my 2022 retrospective postings.  Nevertheless, I have to announce Corruption, Crime & Compliance’s Person of the Year Award.  Although my posting is not done with as much fanfare as Hollywood award shows or other major business announcements, it is always important o take time to reflect back on a year and focus gratitude on those that have accomplished much in difficult circumstances. 

In 2022, every compliance professional (and senior executive) should take a moment to acknowledge the amazing efforts made in 2022 by trade compliance professionals to ensure overall compliance with a maze of complex economic sanctions and export controls implemented in response to Russia’s unprovoked invasion of Ukraine.

Looking back on the last few years, organizations have faced unprecedented challenges, beginning first with the pandemic.  Following recovery from the economic disruptions and personal dislocations resulting from COVID-19, corporations were immediately challenged by the global response to Russia’s invasion and disruption, yet again, to their global supply chains. 

Starting in February 2022, and almost on a daily basis, the U.S. government, along with its allies and partners, issued new and complex economic sanctions and export controls.  Depending on a company’s risk profile, trade compliance officers scrambled each day to maintain compliance, inform relevant business leaders and senior executives of changing risks and requirements for global export and important operations.

The U.S. government implemented a robust and complex set of trade sanctions and export controls that were unprecedented in scope and application, sometimes stretching the limit of its legal authority to do so.  Trade compliance officers were required to coordinate among key areas of the business to ensure proper application of these new requirements. 

The impact of this global response was complicated by several unique issues. 

First, trade compliance officers face an international set of trade sanctions and export controls that were issued by numerous countries, including the EU, Switzerland, Australia, Japan, Singapore, Canada and other partners.  It was difficult, to say the least, to stay current with this ever-changing set of laws and regulations, and even more difficult to educate business personnel about the scope and application of these risks.

Trade compliance officers have always played an important role in mitigating compliance risks.  However, this year quickly elevated the importance of trade compliance controls and the value of trade compliance programs and controls to a company’s overall risk profile.

The performance of trade compliance functions were even more extraordinary when the enforcement environment is considered.  The Department of Justice made clear in numerous pronouncements that “trade sanctions are the new FCPA,” meaning that DOJ intended to enforce the new sanctions aggressively to ensure that Russia was not able to circumvent the global sanctions effort.  When implementing a global sanctions framework, the United States and its law enforcement partners assembled global organizations and alliances to share intelligence and target enforcement in the global economy.  Trade compliance officers quickly recognized the increased risks of this enforcement system and operated under extreme pressure and serious risks.

On a positive note, I hope that companies will use this past year as a real “learning experience.”  In other words, companies should appreciate that trade risks are real and significant, and that trade compliance should receive appropriate attention going forward.  Further, in light of this past year, it is my hope that senior leadership at companies will devote increased attention to trade compliance and foster an environment in which trade risks are accurately assessed and appropriate resources are assigned going forward to promote overall trade compliance.

It is important to note and recognize the incredible performance of trade compliance officers as a critical part of corporate compliance programs.  They deserve our full support and gratitude.  Congratulations!!

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