Detailed compliance policies help keep companies on the right side of the law.

But this needs to be balanced with an understanding that no policy can ever contemplate every possible risk. They need to proscribe behavior that is not permitted, while recognizing that few decisions fall on one side or the other of a bright line.

Employees should know more than just “why” compliance is important. They should know who presents risks of improper payments (like government officials), what kinds of requests are inappropriate, where the company faces the most risk, when to involve others in a transaction and how to decline an improper request.

That requires a compliance program that provides practical information that is relevant to employees in an interesting and engaging way. It’s a challenging process, but it can be done.

Here are some strategies to develop a compliance program that does more than simply reiterate the rules:

1) Create cascading compliance

Management tone is crucial to the success of a compliance program, but it is not enough for the C-Suite to tell employees that compliance is important. Top-level executives should communicate with employees about the company’s values, why compliance is important and that the company is prepared to walk away from bribe-tainted deals.

When employees see that the C-Suite is committed to compliance, they are more likely to share that commitment. Institute and enforce mechanisms whereby employees are encouraged to disclose compliance issues.

When employees see that candid communication is valued, they will be more likely to share information.

2) Make it practical and relevant

In addition to bright-line rules and prohibitions, help employees recognize risks, coach them on appropriate ways to respond to improper requests and support them when they avoid potentially improper situations.

This can be done through practical, scenario-based training, with realistic case studies that employees can work through in teams. Encourage employees to discuss why they chose a particular response and why other responses might not be appropriate.

When providing the best response, explain why other responses were less good. Case studies should be relevant to the industry you work in and the locations in question. Employees in pharmaceutical sales in China should not be trained using case studies about freight forwarders in Nigeria.

Everyone relates more easily to information that is relevant to what they are doing and where they work.

Carefully selected examples will also demonstrate that headquarters understands the local challenges they face.

3) Find the weak spots

To ensure training is relevant, visit foreign branch offices and subsidiaries regularly and speak with the employees. Discussions with employees out on the front lines can be a tremendous source of valuable and timely information.

They will know which government officials are demanding bribes, if any, or if other companies are offering bribes. Find out what the challenges are in specific locations. What do employees believe to be “reasonable and customary”?

What techniques have they found useful in the past for circumventing extortionate government officials? Do they believe that an industry-wide initiative might bolster their efforts? What positive suggestions do they have to address the problems they face?

And then tailor your compliance programs to address those specific risks and embrace the best of these suggestions, thereby improving your program and assuring employees that their concerns have been heard.

On a similar note, conduct exit interviews when employees are leaving to provide them with an opportunity to voice any concerns they may have been unwilling to address while still employed.

4) Keep it interesting

Employees will be less engaged in a compliance program based on strict rules.

There are many ways to make a compliance program interesting, engaging and effective.

Periodically send employees short videos on specific topics to re-enforce training or provide practical advice between required training sessions.

Include compliance quizzes in communications. Hold town-hall meetings or lunches to discuss hot topics and trends in compliance, and encourage employees to ask questions. Schedule team-wide exercises that incorporate contests or other activities related to compliance.

These strategies will keep employees interested and engaged and contribute to a stronger sense of community and a better culture of compliance. While a rule based program tells employees what not to do when choices are reasonably clear, prescriptive programs fall short when choices are less clear.

In these situations, employees need to be confident in their ability to apply good judgment based on candid discussion and scenario-based training. They need to know who they can approach with questions. And they need to know that their company will support them on the legitimately close calls.

How do you communicate the grey areas of your compliance program?

The post 4 strategies to overcome the grey areas in your compliance program and avoid corruption appeared first on Trade Ready.

Any good contract protects you and your customer when you do business together. But when you start selling abroad, you have to think about your sales agreements in a different way. In this post, we’ll look at six strategies for writing solid contracts that will help you avoid problems with foreign customers and governments.

1. Get the language right

Make sure you and your customer agree on the language to be used in the contract and on the meaning of each clause. If the contract is in English, but your customer wants a native-language translation, both contracts must specify which version has legal precedence. If the non-English version is to take precedence, have your legal counsel verify that the intent of the translated contract agrees exactly with the intent of the English one. If there’s a dispute, you don’t want your customer to claim that a clause wasn’t properly translated.

2. Check for compliance with laws and taxes

You’ll be asking for trouble if you don’t have your contract reviewed by legal counsel familiar with local laws and taxes. For example, suppose you send personnel abroad to install products you’ve sold to a foreign customer.

Because you’re working in the customer’s country but your firm is non-resident there, you could get hit with large, unexpected taxes when it’s time to get paid.

So be sure to get competent advice on local tax laws before you finalize your contract, and include clauses that will protect you. The same applies to laws and regulations related to things like customs clearance, labour codes and technical standards.

3. Don’t litigate—arbitrate

If you get into a serious disagreement with a foreign buyer, do your utmost to avoid litigation in a local court, since this will usually put you at a severe legal disadvantage.

You’ll be much safer if your contract specifies that any disputes will be sorted out through arbitration.

Your contract should also state that arbitration will take place in a neutral country. This is to ensure that the arbitrators won’t be swayed by local interests.

4. Don’t deliver to the door

In most overseas markets, you should deliver your goods only to the port of entry and no farther. If you agree to move them within the buyer’s country, you’ll be at the mercy of unfamiliar and possibly unreliable logistics systems, and will be responsible for damaged goods or late delivery. In addition, your customer should accept full responsibility for getting your goods across the border, including dealing with customs, obtaining import licences and paying all taxes and duties.

5. Nail down “acceptance”

In any sale where customer acceptance—and thus payment—depends on the product’s specifications or performance, put a “deemed acceptance” clause into your contract. This should tie the acceptance of the goods to specific conditions or events, never to something as vague as “customer satisfaction.” That kind of ambiguous wording can give some buyers an excuse to keep you dangling because they’re not “satisfied.”

6. Protect yourself from contract risks

What if a customer cancels your contract without just cause? Or a buyer goes bankrupt? Or your key import permits are revoked? To protect yourself from risks like these, you can use insurance solutions from Export Development Canada (EDC). EDC’s solutions can cover all these hazards and more, from a customer’s refusal to accept your goods to a political upheaval in your foreign market. The bottom line: with the right EDC insurance in place, you’ll get paid even if your customer doesn’t come though.

Want to learn more about managing contract risk? Visit EDC’s website to download your copy of ABCs of International Contracts and watch a video with me and my EDC colleague, Dominique Bergevin. We also have a webinar coming up on May 6, so be sure to register today.

The post 6 ways to lower risk when selling to foreign customers appeared first on Trade Ready.

Global trade veteran and one of our newest board members, Alexander Malaket (CITP), will soon be moderating our first #TradeElite discussion on Twitter (Twitter chat). This offers all participants a great opportunity to network with professionals and businesses in the international trade community.

It’s our pleasure to invite you to take part in this casual discussion on Risks and risk management in international business.

Topic: Risks and risk management in international business

Date: Feb 6th 2014

Time: 2.30 p.m. – 3.30 p.m. EST (you can jump in and out at any time during the chat)

Chief Moderator: @ARMalaket_OPUS

Alexander Malaket (CITP).

Alexander is a globally recognized specialist in international business, trade and trade finance. He is President of OPUS Advisory Services International Inc. (Canada), and the Founder/Managing Director of Trade Finance Associates Pte. Ltd (Singapore).

Supporting Moderators: @FITTNews
Your friendly FITT Twitter sidekicks Daniella and me.

Special Guests:

Sarah Cogliati, Account Manager at Export Development Canada @SarahCogliati

Sarah works with Canadian companies across Western Canada. EDC helps support Canadian exporters with Bonding guarantees, Financing programs and Risk Mitigation solutions (Accounts Receivable Insurance and Political Risk Insurance).

Doug Taylor (CITP). @globethoughts

Doug is a creative, results-driven lateral thinker with a wealth of international business experience. He’s the Managing Director of Pacific Business Intelligence Ltd. (Canada).

Craig Atkinson (CITP). @craigaatkinson

Craig is a rising star in international trade and development who has been living and working abroad for the past two years. He founded his own consultancy Lexmerca International Trade in 2010, and he is currently consulting in Geneva, Switzerland with the International Trade Centre (ITC).

Sarah Barnes (CITP). @icecorplog

Sarah has been in the logistics industry for over 17 years, and currently works as the Director of Marketing and Client Partnering at Icecorp Logistics. Through her extensive experience and knowledgeable insight into the movement of freight, customs clearance and warehousing, she is focused on helping her clients through the complexities of the industry.

How you can take part

Alexander will be posing a few questions and observations around the chat topic.

E.g.:

These will be discussed and answered by the international trade community, including our special guests and you.

E.g.:

Please do use this opportunity to provide your perspectives on questions, have your own doubts addressed, and engage with the moderator, special guests, and each other.

Find someone’s answer or perspective to be particularly helpful or insightful? Go ahead and retweet (RT) it! This is a common method of supporting other participants while sharing the value with your own networks.

You can also simply observe (lurk), but we’ll miss your participation. The idea is to get involved; learn and share valuable information with each other.

New to Twitter chats? What you should do:

Login to Twitter (www.Twitter.com) and follow these very simple rules.

1)   It is NOT OK to use the chat to blatantly promote your products. Instead, add value to the conversation and help others gain confidence in your knowledge.

If your product is highly relevant to the topic at hand you can position it as an option AFTER you provide other valuable tips.

Blatant promotion is often ignored and considered low in credibility.

2)   Always, always use the hashtag #TradeElite when you ask a question or reply to a tweet related to this Twitter chat. If you don’t, the other participants probably won’t know that you’re part of the conversation.

E.g.: If you’re asking a question.

Note: The special guests will prioritize replies to your questions after they answer the main moderator’s questions. Depending on the level of activity, your questions may remain unanswered. Don’t be discouraged, and continue to take part in the conversation.

TIP: Cut the #TradeElite hashtag into the clipboard or your notepad so you can easily insert it into relevant tweets.

3)   Track the conversation by using the ‘search’ option in Twitter to isolate tweets relevant to the chat. Use #TradeElite in your search box.

We recommend that you use a Twitter client like Hootsuite (free version available) to make it easy to track the chat in a dedicated area.

TIP: Refresh your browser often so you’ll see the latest tweets.

TIP: If you come in late, when you join the chat spend a few moments scanning the tweets around the hashtag (#TradeElite). Who’s talking? What are the hottest topics being discussed?

4)   If you’re answering a question posed by the moderator, preface the answer appropriately.

E.g.: A2 (Answer 2) to answer question Q2

There can be multiple answers and perspectives for the same questions. You’re encouraged to provide your own answers and insights or add value to the perspectives of our special guests and other participants.

5)   You can use other relevant hashtags along with the main chat hashtag

E.g.:

6)   DO NOT use the hashtag unless it’s relevant to the chat topic and the ongoing conversation.

7)   Do let your current Twitter followers know you’ll be participating in a Twitter chat about 2-5 minutes before the chat. This will warn your network to expect a high volume of tweets from you during that time.

8)   Participate with a positive attitude. Present your views, even if you dissent, in a respectable manner. Negativity will only isolate you from the community.

9)   The chat may extend past the designated time period. Feel free to continue with the conversation beyond the time when the moderators announce the end of the chat. After the chat, do follow up on the conversations by visiting and following Twitter profiles that can add value to your existing network and developmental goals.

As you may have deduced, this free-flowing chat will be held in the spirit of learning from each other, sharing valuable tips, and establishing valuable connections with our peers in the international trade community.

Let’s help each other thrive in global trade! We hope to see you there!

The post You’re invited to the #TradeElite Twitter discussion on global trade: Risks and risk management appeared first on Trade Ready.

Late or non-delivery of goods, foreign exchange and country risk offer new and unique challenges to the would-be international trader.

Despite such risks, and given the global choices available, the rewards of international business—and the imperatives of competition—are leading an increasing number of companies to explore and conquer foreign markets.

To deal successfully with risk, the importer or exporter must first understand the risk tolerance of their organization, and then determine the nature of the risk involved in a potential transaction. After doing a thorough assessment, the firm can develop measures to reduce, manage or optimize the risks identified. The following are the three most common types of risk encountered in international commerce:

1. Commercial risk
2. Country risk
3. Foreign exchange

Learn more about these 3 risks in this video excerpt from the online FITTskills International Trade Finance training course.

The post The 3 kinds of risk in international trade finance appeared first on Trade Ready.