I have written extensively on the importance of trade compliance.  The risk landscape has changed rapidly with the Russia-Ukraine war, the Trump Administration’s focus on tariffs, economic nationalism, and sanctions and export control enforcement.  Along with these significant trends, companies have increased focus on supply chain risks and management.

A new report from the World Economic Forum (WEF) and PWC, Trade Compliance for Leadership, presents a compelling case for a new era of trade compliance.

The global trade landscape is experiencing rapid change with evolving regulatory frameworks and rapid technological change.  Companies have to ensure that their trade compliance programs adapt at pace to incorporate a broader scope.

Trade flows are now worth hundreds of billions of dollars and at greater risk of non-compliance.  International trade management is a strategic requirement as companies reassess sourcing strategies and build internal capacity, while maintaining consistent risk mitigation. 

The WEF Report identifies four key challenges to elevate international trade management.  These include:

Geopolitical Volatility is a significant factor resulting in imposition of tariffs, expanded sanctions and export controls.  To manage these risks, companies must attend to sourcing strategies, improve data visibility and internal risk management capabilities.

Prioritizing the Regulatory Risk framework to address sustainability regulations, including the EU’s Corporate Sustainability Reporting Directive (CSRD), Carbon Border Adjustment Mechanism (CBAM), EU Deforestation Regulation (EUDR) and the Uyghur Forced Labor Prevention Act (UFLPA).  These regulatory requirements require companies to collect data for border clearance and ensure compliance across supply chains.

Regulatory Requirements are increasing, with new updates to customs rules and aggressive enforcement, along with rigorous sanctions and export controls.

Technology and Data Demands are increasing.  Companies have to stay current with automated platforms and insights across data systems.

Strategies for Success

Companies have to elevate trade strategies and compliance for success.  To transform trade strategy and compliance, companies have to conduct a broad business risk and compliance strategies.  To this end, companies have to conduct a structured analysis:

Assess Exposure: It is important to evaluate exposure to shifts in international trade patterns.  A business risk analysis is important to identify geopolitical developments, regulatory changes and evolving technology requirements from custom authorities.

Benchmark Maturity: Assess your trade operations maturity.  The WEF Report suggests a sliding scale for benchmarking — minimalist, evolving, optimizing or leading.  This will help guide future investments in people, processes and systems.  As part of this, the company should manage internal and external support and resources. 

Tooling and Technology:  An important component of this fresh perspective is a candid evaluation of tools and technologies to support compliance and risk mitigation.  Automating tasks, centralizing data or adopting AI-tools can advance compliance to a proactive tool to support business and compliance strategies.

Facilitate Collaboration: By embedding trade management functions in the business, the company can promote coordination among important functions such as legal, compliance, government affairs, sustainability, procurement and IT.