Chief compliance officers are adjusting a new, risk world, where top risks include export controls, sanctions, and immigration enforcement. At the same time, some risks remain — third-party risks, conflict of interest, fair competition, and yes, even anti-bribery. 

At the beginning of a new Administration, there is a lag between intentions and actions.  It takes time to move the government enforcement and regulatory machinery and the new DOJ priorities have yet to yield any results, this early in the process. 

DOJ’s new strategies will be revealed further with speeches, case announcements and Congressional testimony.  One area of interest is the focus on cartels and TCOs — the highlighting of these entities and the risks they pose opens a new area of focus.  Most companies have a third-party risk management system and adjusting these programs to identify and weigh cartel and TCO risks presents challenging issues that can be solved.  Companies will have to adjust their third-party systems to take this new risk into account.

Perhaps the most difficult challenge is for those companies that have to navigate the ever-changing world of tariffs and other trade restrictions.  Many companies have tariffed goods in their supply chains.  Navigating the tariff regulations will become an imperative. 

The Trump Administration has made repeated statements promising to aggressively enforce import regulations and tariffs, in particular.  This is a new and precedent setting commitment. The CBP has maintained a moderate level of enforcement through the years, but with the set of new Administration directives, companies should expect a ramped up import enforcement footprint.  This will be something new for trade compliance officers — underscoring the important of basic compliance program requirements, such as documentation, classification, and careful processes to monitor and audit trade activities. 

A new focus on these technical issues will elevate training and internal controls as important tools to ensure that import activities are compliant.  Trade compliance officers should quickly initiate trade risk assessments, and identify the compliment of risks: tariffs; sanctions; forced labor and others. 

At the same time, trade compliance officers should be developing their own internal strategy, especially given the new volatile risk profile.  Given the new Trump initiatives in tariffs and trade, trade compliance officers should be supported and given the resources needed to review the company’s trade compliance program.  In this respect, it is imperative to identify and assess the new risk profile facing the company.  Those that have important items subject to higher tariffs will have a more difficult time than those with few products subject to tariffs. 

Beginning with the risk assessment, trade compliance officers should naturally partner with procurement.  Working together, these two functions can cover most of the issues, and implement appropriate controls to address most, if not all, of the company’s trade enforcement risks.

For now, everyone should be lending a helping hand to all of our trade compliance colleagues.  Board members are focused on tariffs as an economic issue — trade compliance officers have to weigh the issues, including economic impact and trade compliance policies and procedures.