Trade Compliance

A multinational in the consumer industry with regional headquarter in Switzerland had not yet established any trade compliance management system.

The company turned to L&M PRISK in a case of bloated orders from one of their trading partners. When L&M PRISK met the company management to fully understand and map the risk constellation concerning this specific red-flag, it turned out that there were further problems concerning the potential violation of international trade compliance regulations. The company, which has to maintain a positive brand image, had recently attracted negative media attention in connection with its Russian business. In the course of follow-up discussions, the management asked L&M PRISK to establish a comprehensive trade compliance system that is in line with all organizational needs, provides an effective answer to specific regional trade compliance risks, that is up to all latest international trade compliance standards and though business friendly, and that gives maximum security (“safe harbor”) to the company management.

Based on an international industry specific best-practise analysis, L&M PRISK defined core pillars of a state-of-the art trade compliance management system. Although the system developed goes far beyond out-dated export control systems, it enables business - but in a safe way. The heart of the system is the trade compliance policy, defining red-flags, verfification strategies, roles and responsibilities within the organisation, as well as interfaces with L&M PRISK in the trade compliance management process. L&M PRISK further developed a code of conduct and supported the legal team in the context of the revision of contracts. Further pillars of the system are software based annual KYC screenings and reports, trade compliance awareness raising meetings with the client’s partners in high-risk countries, as well as in-depth (HUMINT) investigations and trade compliance enforcement meetings with trade partners in case of red-flags. In addition to that, L&M PRISK is continously monitoring the development of the global regulatory framework as well as local risk constellations. Progess and results are reported in frequent alignment meetings with the management.

As a result of the project, the trading-partner raising red-flags was successfully brought back to trade compliance. The structural adjustment of company processes and trade routes now guarantees “compliant profits”. Last but not least, the company is now fully operating according to latest international trade compliance standards, which guaranteess maximum security vis-a-vis law enforcing agencies and institutions.