Adhering to the rules and regulations of global trade was tricky enough before President Trump took office the second time around. With a stated aim to “end unfair trade practices,” he’s gone on an often unpredictable tariff-raising and enacting streak that has companies scrambling to ensure they remain compliant.
And though tariffs are in the headlines these days, they represent just one of many areas of trade regulations companies have to deal with. To do so, they need the expertise of trade compliance professionals in various roles to keep them out of hot water.
What is trade compliance?
According to Dow Jones, trade compliance is “an aspect of corporate compliance which ensures that all import and export transactions are in conformance with the laws and regulations of the countries involved.”
Underscoring the complex nature of international trade compliance, the organization notes that in addition to country-country regulations, international import/export companies must adhere to those imposed by multiple governing bodies within an individual country.
Since regulations are “often not harmonized across trading nations,” Dow Jones says it’s getting more challenging to navigate related requirements amid a “volatile global trade environment” — which is often subject to rules that may change without much warning.
“As nations change their sanctions policies to address the current state of foreign affairs, so too do the national regulations that companies must follow in their global trade compliance processes,” Dow Jones explains.
The organization says trade compliance comprises “two general operating practices”:
- Customer due diligence (CDD) and supplier vetting “using sanctions lists or restricted or denied parties lists to ensure that your trade transaction is not destined for a sanctioned individual, company or country. …”
- Managing commodity-based import and export controls “in a compliant manner across the global supply chain, not just for dual-use goods but also any products going to high-risk jurisdictions.”
What do trade compliance professionals do?
In his Trade Compliance Roles and Responsibilities Cheatsheet, international trade attorney Schuyler ‘Rocky’ Reidel provides a comprehensive look at the duties of trade compliance professionals in various roles.
In his “key takeaways” section, Reidel provides a broad overview:
- “Trade compliance roles, including managers, officers, customs brokers, and legal advisors, are integral in maintaining compliance with international trade regulations and facilitating the flow of goods across borders.”
- “Core responsibilities of trade compliance professionals encompass interpreting trade laws, conducting risk assessments, implementing compliance programs, managing audits and investigations, and maintaining records.”
- “The use of technology, such as trade management software, automation tools, and data analytics platforms, is increasingly vital in helping professionals manage and monitor trade compliance more efficiently.”
Reidel says dealing with international trade requires multiple positions to help organizations remain compliant. He describes such roles as:
- Managers who specialize in trade compliance
- Officers who help ensure trade law adherence
- Brokers with specific knowledge about customs practices
- Specialists who oversee logistics
- Advisors who provide legal counsel on related matters
- Senior-level executives responsible for overall decisions
Reidel adds that trade compliance positions can include many duties, including:
- “Comprehending and elucidating trade regulations”
- “Executing risk evaluations”
- “Establishing compliance strategies”
- “Overseeing audits and inquiries”
- “Preserving records and proper documentation”
“Professionals in these roles are tasked with guaranteeing that entities adhere to the stipulations set by international trade laws and abide by global trade agreements,” he explains.
In addition to specific abilities — such as being detail-oriented, analytical, good with problem-solving, organized, and excellent communicators — Reidel says it’s essential for trade compliance professionals to have expertise in international trade regulations.
After providing an in-depth explanation of the various nuances involved, he sums up the role of a trade compliance professional like this.
“… the function of trade compliance is critical within the international business environment,” Reidel writes. “The tasks undertaken by professionals in this field — developing compliance strategies, overseeing transactions, performing audits, and navigating intricate regulations — are essential for maintaining seamless global trade operations. Through leveraging technology and implementing industry best practices, challenges and emerging trends in the realm of international trade can be adeptly handled to ensure adherence to all relevant guidelines and standards.”
For more details, please see the complete guide.
Thomson Reuters report: trade compliance pros needed
In addition to other findings, a recent report from Thomson Reuters Tax & Accounting confirms the important role trade compliance professionals play — and the need for more of them.
“The 2024 Thomson Reuters Global Trade report highlights key challenges businesses face, including supply chain issues and talent shortages, and notes that while technology offers solutions, it also adds complexity, requiring investment in talent and data,” an article on the company’s website says.
Based on responses from “upper-level trade professionals” in North America, the European Union, the United Kingdom, Latin America, and Asia Pacific, findings revealed that “complexity” and “disruption” are what’s expected for global trade and supply chain management in 2025.
The article describes a recent webcast in which Andrew Moxon, Senior Product Marketing Manager at Thomson Reuters, and Marianne Rowden, CEO and Director at E-Merchants Trade Council (EMTC), discussed “how these themes are playing out in real-world business and what companies can do to combat them.”
Describing a shortage of skill and talent to effectively manage global trade as one of the report’s findings, the article notes that although this has been an ongoing issue for years, an increasingly complex regulatory landscape means “the skills needed for ensuring compliance are more essential than ever — and are also evolving.”
To address this pressing issue, Thomson Reuters says “increased education and awareness” are needed, as well as “investment in automation and emerging technological solutions.” And that until they’re able to build needed capabilities in house, many companies rely on service providers and consultants to “bridge the gaps.”
“We need to recognize that trade compliance is actually a profession,” Rowden said. “It’s a multidisciplinary profession, and we have a lot of liability. In a way, people only recognize both trade compliance and supply chain when things go wrong, and things have been going wrong in the last couple of years. We have to realize that in trade compliance, a lot more functions and a lot more responsibility and liability are being imposed on the supply chain.”
She also unscored the need for more collaboration between industry and academia.
“Companies and trade organizations also need to work with academic institutions to ensure those entering the field have the correct skills for today’s evolving trade compliance requirements,” Rowden said.
To hear more from Moxon and Rowden, listen to the webcast.
And please join us for our next post in which we’ll examine the growing role of technology to help companies maintain regulatory compliance within international trade.
