Visit Our Sponsors
Senior executives are turning to corporate trade management as a means of guarding against higher levels of risk in the global trade arena, according to a new white paper from KPMG LLP. The heightened regulatory climate that controls international trade is driving companies to do a better job of managing risk. What's more, that effort "is likely to intensify with the turbulent economic climate," says Andrew Siciliano, a partner in KPMG's Trade and Customs Services practice. Historically, trade management has focused on such basic functions as customs clearance of imports and exports. Today, the function is applied at a more strategic level, with an eye toward protecting against risks across the organization.
Companies are beginning to realize that trade and customs risk should be managed like other financial areas, KPMG says. Executives are searching for ways to standardize the process of identifying, prioritizing, testing and communicating global trade risk. Their primary goal is duty savings, but concerns over supply chain restructuring and anticipated growth in imports are also part of the mix. Developed from a recent forum involving the participation of 17 trade executives from leading companies, the KPMG white paper finds them paying close attention to regulatory changes, such as the new "10+2" data-filing requirement of U.S. Customs and Border Protection. That's one reason why the trade and customs function is rising on the organizational chart; nearly half of the trade groups of forum participants are just three levels removed from the chief executive officer, according to KPMG. Trade responsibilities are most commonly found within the corporate tax function, although they also fall under the purview of such areas as legal, logistics, ethics and compliance, and supply chain.
"Participants agreed that the keys to successful trade management include: securing management commitment, creating the right global infrastructure, standardizing global procedures, proactively monitoring risks and opportunities, effectively using tools and technology, and staying current and adapting to change," KPMG said. Adds Siciliano: "As companies seek greater cost efficiencies and jurisdictions seek greater revenue, trade activities can expect to come under increasing scrutiny in the months ahead."
Enjoy curated articles directly to your inbox.