International Trade Leader: compliance and supply chains

01

Leading a trade compliance programme

In simple words

One careful person can keep one shipment safe. A company with many shipments needs a system, like the rules and checks a hospital uses so every doctor washes their hands, not only the careful ones. A compliance programme is that system for trade.

Before this course: Global Trade Operations: customs, logistics and risk (course 2.25.3). Earlier you learned the basics of trade (course 2.25.1) and how to run a small trading business (course 2.25). You can already build a shipment file, classify goods, work out customs value, use brokers, insure cargo, manage payment risk and keep a risk register. Now you lead the system that keeps a whole company's trade legal and its supply chain steady.

Key facts

Compliance is a leadership job. The people who sign contracts and approve shipments decide whether rules are followed when time is short. If leaders skip checks "just this once", everyone learns that checks are optional.
A widely used model. The US Treasury's Office of Foreign Assets Control (OFAC) published A Framework for OFAC Compliance Commitments. It says each risk-based sanctions compliance programme should include at least five essential components:

Component	What it means in a trading business
Management commitment	Leaders approve the programme, give it people and money, and support a "culture of compliance"
Risk assessment	Review customers, supply chain, intermediaries and counterparties, products and services, and geographic locations
Internal controls	Written policies and procedures, screening, record keeping, and fixing weaknesses that are found
Testing and auditing	Independent, objective checks that the controls really work
Training	Regular training, matched to each person's role, with resources people can find easily

The same five parts work well for customs, export controls and responsible sourcing, not only sanctions.
Risk-based means stronger checks where the risk is higher: new customers in high-risk places, goods that could have military uses, complex ownership, unusual payment routes.
A simple risk score is likelihood (1 to 5) x impact (1 to 5). Score each risk, then put most effort on the highest scores.
Common root causes of failures listed in the OFAC framework include: no formal programme, misunderstanding which rules apply, faults in screening software, poor due diligence on customers (for example their ownership and business dealings), compliance done differently in different parts of the company, and non-standard payment or commercial practices.
Write it down. A programme you cannot show on paper is hard to prove and hard to teach.

Example (practice numbers)

Risk	Likelihood (1-5)	Impact (1-5)	Score
Wrong HS code on our main product	3	4	12
A customer is on a sanctions list	2	5	10
A supplier uses forced labour	2	5	10
Port delay	4	2	8

The classification risk scores highest, so the first control is a reviewed classification library (Lesson 4). The sanctions and forced-labour risks have low likelihood but the highest impact, so they still need firm controls.

Step by step

Write a one-page compliance policy signed by the owner or CEO: why it matters, who owns it, and that anyone can stop a shipment they think breaks the rules.
Name one person accountable for trade compliance, and give them time and a budget.
List your risks across customers, suppliers, intermediaries, products, countries and payment routes.
Score each risk with likelihood x impact and sort the list from highest to lowest.
For the top five risks, write the control, the owner and how often it runs.
Plan one independent test of your controls each year (someone who does not run the control checks it).
Plan short training for each role: sales, purchasing, logistics, finance.
Check: you can show a written policy, a scored risk list, controls with owners, a test plan and a training plan.

LESSON 01Leading a trade compliance programme

LESSON 01 / ANIMATED LESSON / AI VOICE00:00 / 01:10

Voice

Read the video script

[Host] "Careful people make careful shipments. Systems make a careful company."
[Text on screen: Commitment, risk assessment, controls, testing, training] "A strong compliance programme has five parts, starting with leaders who back it."
[Screen: risk table with likelihood times impact] "Score each risk, and put the most effort where the score is highest."
[Text on screen: Anyone can stop a shipment] "Make it safe for anyone to stop a shipment that looks wrong."
[Host] "If it is not written down, you cannot prove it and you cannot teach it."

Try it now

Write your one-page compliance policy and a scored risk list with at least eight risks. Choose controls and owners for the top five.

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Copy this, open Claude, paste it, and Claude will walk you through the lesson step by step.

For a grown-up: Claude is for adults (18+). Copy this, paste it into Claude, and use the answer to explain the lesson to your child.

I'm learning "International Trade Leader: compliance and supply chains" on The Future Market. Lesson 1: "Leading a trade compliance programme".

What the lesson teaches:
- Compliance is a leadership job. The people who sign contracts and approve shipments decide whether rules are followed when time is short. If leaders skip checks "just this once", everyone learns that checks are optional.
- A widely used model. The US Treasury's Office of Foreign Assets Control (OFAC) published A Framework for OFAC Compliance Commitments. It says each risk-based sanctions compliance programme should include at least five essential components:
- Component - What it means in a trading business
- Management commitment - Leaders approve the programme, give it people and money, and support a "culture of compliance"
- Risk assessment - Review customers, supply chain, intermediaries and counterparties, products and services, and geographic locations
- Internal controls - Written policies and procedures, screening, record keeping, and fixing weaknesses that are found
- Testing and auditing - Independent, objective checks that the controls really work

The exercise I'm working on:
Write your one-page compliance policy and a scored risk list with at least eight risks. Choose controls and owners for the top five.

I'm stuck. Please:
1. Explain the main idea in plain, simple words with one everyday example.
2. Walk me through the exercise one small step at a time. Ask me what I've done so far before giving the next step.
3. Don't just give me the final answer. Help me do it myself, and check my work when I share it.

I'm a parent helping my child (about 8 years old) with a lesson called "Leading a trade compliance programme" from the course "International Trade Leader: compliance and supply chains".

Here's what the lesson says:
One careful person can keep one shipment safe. A company with many shipments needs a system, like the rules and checks a hospital uses so every doctor washes their hands, not only the careful ones. A compliance programme is that system for trade.

The activity:
Write your one-page compliance policy and a scored risk list with at least eight risks. Choose controls and owners for the top five.

Please explain this so an 8-year-old understands: short sentences, a fun everyday example, and no hard words.
Then give me 3 simple questions I can ask my child to check they understood, and a way to do the activity together, one tiny step at a time.

Open Claude

Sources

OFAC, A Framework for OFAC Compliance Commitments: ofac.treasury.gov/media/16331/download?inline

My notes

I learned this

02