Lack of Investment in Trade Compliance Training Troublesome

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Procurement organizations have faced a number of new trade compliance regulations this year. Take the new Trade Facilitation and Trade Enforcement Act, as an example, which was signed into law in February. Or, the new Cuba trade agreements developing now that sanctions have been lifted. And now, with Brexit vote impacts looming over procurement and supply chain organizations, companies may have additional trade rules to consider in the near future. But a new survey shows multinational companies are not investing in trade compliance training for their employees, despite the risks of noncompliance.

Amber Road’s Global Trade Academy surveyed 322 executives from more than 300 U.S.-based companies that engage in international trade and commerce and found many organizations still do not see training as a priority. According to the results, 56% of executives said their company does not invest in trade compliance training. However, the majority (73%) said their company has a stated trade compliance plan but many lacked the budget to train employees on it. Roughly a third said their company had no budget in place to spend on training employees on trade compliance.

The lack of investment in training in this area is also surprising given that 28% of respondents have been fined or warned by government agencies for not complying with trade laws, according to the report. The risks these companies face, especially considering how many of them work with suppliers and partners around the globe, could be huge, Amber Road pointed out in the report. Of the companies surveyed, 48% conduct business in more than 20 countries and 51% of companies manage 5,000 or more international shipments each year.


The Amber Road survey also discovered a contradiction in how companies plan for trade compliance but fail to take action. The report asked “are companies talking the talk and not walking the walk?” This is because 73% of survey respondents said their company had an actual stated compliance plan, an increase from the 53% response rate from the 2014 survey. Additionally, 69% said they have on-going trade compliance training for employees. The problem, according to the report, is that few companies are providing employees with the means to actually train.

Forty-five percent of survey respondents said they do not require trade compliance training as part of employee professional development and 46% said their company does not require trade compliance training on an annual basis.

“Given that 100% of companies surveyed are subject to either the Export Administration Regulations (EAR) or the International Traffic in Arms Regulations (ITAR) or both, one would expect a greater commitment to training,” the Amber Road report stated.

Another possible reason for the discrepancies in training plans versus actual training investment could be that some executives are under the impression that their companies are offering more training that what they actually are, the report said. Fewer than half of companies (48%) said they had an actual budget for trade compliance training.

Other than facing possible fines and other violations for failing to comply with trade laws, not understanding trade compliance could prevent a company from earning more money.

Lack of awareness about the benefits of trade compliance is causing many companies to leave money on the table,” the report said. “Many organizations are not taking advantage of preferential trade programs, including duty drawback, free trade agreements (FTAs) and free trade zones, yet companies with trained staff that can take advantage of these programs can save millions of dollars.”

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