[ INSIGHT ] SCCOMPLIANCE
by Jonathan Todd Vice-chair of the Transportation & Logistics Practice Group, Benesch Law jtodd@beneschlaw.com | 216-363-4658
4 Keys to Successful Trade Compliance Geopolitical risks to supply chains are top of mind across C-suites but few say what it means. The term “geopolitical risk” has largely become a codeword for import, export, and economic sanctions compliance. The fast pace of change in 2025 requires adopting meaningful compliance structures that achieve results. external training resources, processes for risk and role speci c functions like sales or shipping, consolidated classi cation of HTS codes for imports and ECCN codes for non-military exports, and automated
sanctions screening functionality in company ERPs and operating systems. Compliance personnel must determine which mix of tools is best for managing compliance without unreasonably restricting business. A thoughtful foundational compliance program can then grow and change to meet evolving company relationships, footprint, and trade lanes. 4. Procurement and sales teams. The golden rule of compliance is to avoid self-blinding. Procurement and sales professionals are on the leading edge of defense against regulatory violations, quality assurance, and nancial risk. Targeted questions on the front end are helpful in recognizing geopolitical risk. Developing thoughtful onboarding processes can ensure that responsible due diligence occurs before sending or taking a purchase order. Key questions can include: company demographics like top leaders and ownership, company footprints around the world, company af liates, credit ratings, and banks through which a company will pay or get paid. Those onboarding records yield party names and fact patterns for screening. n
If there are red ags or concerns then clarity on how to escalate those, and to whom, is half the battle. The other half of the battle is that compliance leadership or outside counsel will swiftly resolve any concerns from personnel or investigate whether or not a violation occurred. In most cases, learnings can be found to improve ongoing processes even if there is no violation. If there are material issues then corrective actions can be implemented and voluntary disclosures can be considered to mitigate risk of civil penalties. This exercise also produces valuable documentation to defend against government investigation. 3. Risk-appropriate compliance processes. Compliance is a process. It must begin and it never ends. It is essential to create behaviors and resources that stay aware of rules and red ags for the existing team and new hires, as well as respond to global changes. The toolbox for business operations compliance is full: appropriate compliance policies, internal and
It’s time to think strategically about developing quality compliance programs that empower personnel in procurement, sales, shipping, and logistics roles to do the right thing and protect the company. Four keys to successful compliance structures can help deliver results. 1. Risk assessment and awareness. Every supply chain faces unique compliance risks driven by footprint, industry sector, and types of third- party relationships. A good kicking-off point is to conduct a preliminary risk assessment followed by awareness training. Lack of awareness for company-speci c risks has become acute among many internal teams, suppliers and customers, and supply chain service providers. Recent tariff changes and the Ukraine War have made this painfully clear to many supply chains. 2. Roles and responsibilities. Getting the right team around enterprise-wide compliance, and at appropriate roles within business units, is as important as identifying incidents and managing through those.
26 Inbound Logistics • April 2025
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