I’m often tasked to speak about some of the trends that I see in global compliance. I’m privileged enough to get to interact on a daily basis with our practice leaders throughout the US, Canada, Europe, Asia, and the South Pacific. This allows for a more global perspective than most. The regulatory landscape is in a state of flux that has been rarely seen during my career, but to narrow it down, here are some of the big hitters that are shaping global compliance.
- Trade is more complicated
When I started in the industry, almost no one had a Compliance group. I was relegated to faxing documents for Export shipments to India.
Fast forward to today and my intern probably thinks the fax machine is a copier. Compliance groups today are talking about how to implement Internal Controls, trying to figure out complex import regulations into 85 countries, while weaving through the myriad of non-tariff barriers to trade in developing countries, and simultaneously signing up for AEO.
Then there is ACE...
- Proliferation of FTA’s can reshape the world
This is pretty interesting stuff. I mean that. It is so interesting that Jimmy Fallon and President Obama did a duet together on the TPP.
And, while that FTA gets a lot of the press, there are a multitude of FTAs being implemented that will change the face of supply chains over the next decade. Being able to properly qualify your product for an FTA will no longer be a strategic advantage, but rather a competitive necessity.
Over time, it is my belief that the FTA’s it will drive better compliance in HTS classification and trade data.
- Trusted Traders vs. Everyone Else
Whether it is C-TPAT, AEO, or one of the other major supply chain security initiatives, these programs will become more important as they start to stitch together. Many people are talking about the benefits of joining.
I, however, worry more about being part of the ever-shrinking piece of the pie that is not “trusted” and what the ramifications to my Supply Chain will be as Customs regimes focus their resources on non-members.
- Data is king
Maintaining compliance data is getting more important, particularly as many Customs organizations are attempting to modernize the way they facilitate trade. This modernization requires quality data for both Customs and other government agencies in a multitude of jurisdictions. Companies need systems to maintain and communicate globally, and they need quality personnel to use them.
- Compliance groups have more responsibility, but the same resources
Likely a symptom of the 4 previous points, compliance departments are being asked to cover a lot more ground than their home country. They accomplish this feat by outsourcing some of the tactical work where they can’t provide as much value, like HTS Classification, auditing, denied party screening, etc. This allows them to focus on the more strategic tasks at hand.
While I don’t have a crystal ball, I am pretty confident that trade won’t get simpler. Make sure you keep on top the changes any way you can via blogs, training sessions, or industry events.
A solid understanding of trade is, and forever will be, a key differentiator in the global market.
If you need assistance, let Tradewin know. We have that solid understanding of trade and we are here to help.