Tag: Supply Chain

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Compliance Into the Weeds

Impacts on Compliance of Russian Invasion of Ukraine

Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. This week, Matt and Tom take a deep dive into some of the impacts on compliance from the Russian invasion of Ukraine. Highlights include:

·      How will the invasion impact your Supply Chain?

·      What are the attributes of a compliance program that can lead your corporate response?

·      What about cyber?

·      Will all this lead to a more holistic ERM response?

Resources

Matt in Radical Compliance

Categories
The ESG Compliance Podcast

ESG Supply Chain Compliance with Travis Miller and Jared Connors


Assent Compliance’s Travis Miller and Jared Connors join us as they discuss their work in conflict minerals supply chains, how ESG compliance plays a role, what companies should do to interpret data and increase efficiency and recovery, and the future of risk management.
▶️ ESG Supply Chain Compliance with Travis Miller and Jared Connors:
Key points discussed in the episode:
✔️ Companies are starting to realize the significance of making a commitment to ESG through responsible sourcing.
✔️ Outsourcing usually occurs in the most regulated, most dangerous, and least profitable businesses.
✔️ Business continuity planning is crucial in risk management, more flexible disaster response, and efficient operations. Aside from environmental and social, risk is also a financial concern.
✔️ The most important letter of ESG is P – product, people, and policies. Middle-aged workers are the most vulnerable and highly targeted in inhumane business practices and violations.
✔️ Dig deeper into organizations and understand their commitments to mitigate and prepare for risk.
✔️ Non-financial risks are pressuring investor disclosures.
✔️ ESG is reorienting the global market and the world. Large-scale environmental and social scandals ruin reputation and business.
✔️ Educating the supply chain contributes to overall company efficiency and risk management.
✔️ Compliance toolkits should be utilized even outside the company. The legal space has become the ideal practice ground for compliance.
✔️ Companies should be proactive in detecting supply chain issues internally.
✔️ Translate technical speak to an executive language to gain interest from the C-level suite.
✔️ Assess supply chain maturity.
✔️Companies are now compelled to make a change due to their global influence. Consumers’ cries for environmental and social accountability are now heard – all thanks to social media.
Jared Connors is a senior subject matter expert on Corporate Social Responsibility at Assent Compliance, the worlds’ leader in supply chain data management.
His expertise involves achieving ESG goals by understanding and mitigating potential supply chain risk, the transition from CSR to ESG, how companies can take a holistic approach to ESG, and ESG-related regulations, such as those pertaining to human trafficking and slavery, conflict minerals, and anti-bribery, anti-corruption.
Travis Miller is General Counsel at Assent Compliance. He manages Assent’s worldwide legal activities, advises the Board of Directors on legal matters, and oversees corporate compliance, governance initiatives, and other commercial transactions. Before coming to Assent, he served in various high-level counsel positions with companies such as Microchip Technology, Foresite Group, and St. Jude Medical.
Resources
Assent Compliance on Twitter
Assent Compliance on LinkedIn
Jared on Linkedin
Travis Miller on Linkedin
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Do you have a podcast (or do you want to)? Join the only network dedicated to compliance, risk management, and business ethics, the Compliance Podcast Network. For more information, contact Tom Fox at tfox@tfoxlaw.com.

Categories
Daily Compliance News

April 22, 2022 the Funding Secured Edition


In today’s edition of Daily Compliance News:

  • Do Supply Chain bottlenecks lead to corruption? (WSJ)
  • Funding secured. (WSJ)
  • When Facebook calls. (WSJ)
  • Carl Icahn-friend of the pig. (WSJ)
Categories
Daily Compliance News

April 14, 2022 the Blatter to Face Trial (Finally) Edition


In today’s edition of Daily Compliance News:
·      Top CA lawyers prosecuting Activision Blizzard leave. (WSJ)
·      Sepp Blatter, Michael Plantini to face trial (finally). (ESPN)
·      Isle of Jersey seizes $7bn in Abramovich assets.  (NYT)
·      WH and businesses blast Texas Gov. trucker policy.  (WaPo)

Categories
The ESG Report

Jared Connors – Using Tech to Support ESG


 
In today’s ESG Report, Tom Fox is pleased to be joined by supply chain risk management professional extraordinaire, Jared Connors. They’re discussing the work done at Assent Compliance Inc., one of the leading organizations in supply chain sustainability management. 
 

 
Becoming a Leader in the World of ESG 
Assent has worked on a variety of regulations to support its clients’ compliance journeys, including substance and modern slavery regulations. Within that context, there are often reputational impacts of compliance. At Assent, the natural extension is to encourage customers to assess their suppliers’ abilities to support and adhere to these regulations. 
 
The Impact of the Conflict Minerals Regulation 
The Conflict Minerals Regulation was one of the first regulations to promote greater transparency of the upstream supply chain and is a pioneering regulation that’s driven companies to look beyond their Tier 1 suppliers. According to Jared, the Conflict Minerals Regulation isn’t just about source of origin verification, but also about chain of custody.

Reputational Damage 
Jared tells a story that highlights the significance of reputational damage, and how it can facilitate an organization’s downfall, “This started out with reputational impacts and led to a lot of other tangible risks from a monetary perspective.” 
 
Direct and Indirect Engagement 
Directly engaging suppliers involves asking them about internal controls, management procedures, and their ability to provide metrics on certain topics. This, however, is insufficient, and therefore, indirect evaluation is required. “You can’t just look at the first level,” says Jared, “You have to get deeper.” These further evaluations are necessary to understand if suppliers can “walk that talk”, because that should have huge implications in doing business with them. 
 
RESOURCES 
Tom Fox’s email
Jared Connors | LinkedIn | Assent
 

Categories
Innovation in Compliance

Taxman: Tax and Supply Chain


 
As the Taxman five-part series nears the end, Tom Fox and Tracy Howell tackle an important topic that has become more prominent over the years: tax and supply chain. 
 

 
How Tax Can Help Supply Chain
Supply chain in a traditional sense focuses on the acquisition of goods, in particular the quality, cost, and delivery. There can be a substantial tax component in each of those steps to help companies attain goods at the lowest possible cost. Consequently, if supply chain does not have a relationship with tax, it can result in additional surprise costs being attached to goods. Data beyond the cost of goods, material, and service can be used to model and predict the additional tax burden so that better procurement decisions can be made. 

Mitigating the Risk of Mission Creep 
Establishing a connection between tax and supply chain in an organization is good, but the relationship needs to be kept fresh for a positive impact. In a company, people may be focused on so many different things that they forget to interact. Creative people tend to expand their roles and look for goods and services in different locations, which can be the cause of a mission creep. Hence, having constant close interaction between supply chain and tax allows for changes in functionality to be documented and implemented into the organizational framework.
 
Elements of a Tax-Efficient Supply Chain
Tom and Tracy discuss the elements of a tax-efficient supply chain. This includes:

  • Examination of the entire scope of what’s being manufactured and sold to allow the creation of tax opportunities to bring value based on special purpose entities. 
  • Coordination of transactions in a supply chain with transfer pricing. 
  • Compliance with tax laws and regulations. 
  • Documentation of the process. 

 
Resources
Tracy Howell | Email | LinkedIn 
 

Categories
Blog

Tax and Compliance: Tax and Supply Chain

What is the intersection of tax and compliance? Why does a Chief Compliance Officer (CCO) or compliance professional need to sit down with the corporate head of tax? How does a corporate tax function fit into a best practices compliance program? It turns out there is quite a bit a compliance professional can learn from a tax professional. Moreover, there are many aspects of tax which should be considered by a CCO and compliance professional from an overall risk management perspective. Unfortunately, these questions are rarely explored in the compliance community.
To explore these issues (and remedy this lack of awareness) I recently sat down with noted tax professional Tracy Howell to explore these and other questions. We tackled these issues and others in a five-part podcast series for Innovation in Compliance. Today, we consider the role of tax in the Supply Chain. We also expand that to compliance, because compliance also has a huge role in this area.

Obviously, this topic has become more prominent over the last couple of years during the pandemic. Over the past couple of weeks, with the Russia invasion of Ukraine, it has become even more hyper-critical. One of the things we saw in the pandemic was that many companies with long established Supply Chains, perhaps not single source suppliers, but close to single source suppliers, found themselves scrambling when huge swaths. With the Russian invasion of Ukraine, we have had the largest amount of economic sanctions delivered by any administration in the modern era. Companies are struggling with not only responding to the sanctions but responding to the business dislocation from Russia and Belarus to Ukraine and into eastern Europe.
Clearly Supply Chain is critical for an organization, especially an organization that manufactures and has any substantial delivery of materials and services. There is also the question of where the highest risk in your Supply Chain might be. Is it in the critical component(s) in the acquisition of goods? Is it in the delivery of services? Or is it simply in the manufacturing process itself? Moreover, if you think of Supply Chains as only having a traditional focus on the acquisition of goods, comprising both the quality of the goods and the cost of the goods, and concluding with the delivery of the goods for consumption or later sale; you are missing a key component. That key component is tax and as Howell stated, “there can be a substantial tax component in each one of those steps of acquisition costs. If you are buying goods in foreign jurisdictions that can be transaction taxes, such as GST or VAT.”
Howell provided the following example. “If a company’s buying raw materials in a third country, in the shipping terms, we’d normally say title transfers in international waters, that’s a good thing for the buyer. Because that means if I’m buying something and I take title in international waters, it should not trigger any transaction taxes. However, if you are not paying attention to where you acquire goods from and then you take title within the country of origin’s territory, guess what? That could trigger up to a VAT liability of 15 to 20%. This means that if your Supply Chain is not interacting or does not have a relationship with tax, and the taxes can add a 15% to 20% component to the cost of goods in a transaction, which dramatically impacts the company’s cost of goods sold (COGS).”
However, if there is a good relationship between tax and Supply Chain, there can also be additional benefits tax brought to the fore and such benefits are more critical in 2022 and beyond because they can help a company plan for disruptions in the supply chain. For instance, if Supply Chain looks for alternative suppliers, or a different geo-region for component parts, tax can step in and do an analysis that would at least give them an estimate of what the tax costs are going to be.
Howell said that tax can provide “Supply Chain with the data that is beyond the cost of good, or the cost of material, or the cost of service. A tax professional can do so by modeling out the liability that a multinational could incur, including up to five different possible sources for goods and materials. From there you can extend your model out to see what the additional tax burden would be in each one of those scenarios. From there you can check to see if there are any tax incentives that either exist or that your organization can go negotiate.”
But the risk management that tax can bring to Supply Chain does not end there; particularly once tax and Supply Chain have established a relationship and it is understood how tax can assist Supply Chain in the procurement of goods and services. Through a documented process, it creates and entire framework for the organization to use going forward because at any given time Supply Chain will be looking for goods and services in different locations. Howell said, “you can have a mission creep. It is important for tax to have that relationship with Supply Chain so as their functionality changes and your organization is acquiring new goods in different locations, you can document the changes, and update your framework as needed when new tax issues can come to play.”

Join us tomorrow for our concluding post when we consider the role of tax in a corporate ESG program. Check out the full podcast series Taxman: On the Intersection of Tax and Compliance on the Compliance Podcast Network. Check out Tracy Howell on LinkedIn.

Categories
This Week in FCPA

Episode 293 – the Ukraine Hangs On edition


As Ukraine hangs on from the Russian invasion, Jay is on assignment so fan fav Kristy Grant-Hart joins this week as a co-host with Tom to look at some of the week’s top compliance and ethics stories from the impact of the Ukrainian crisis in the Ukraine Hangs On edition. 
Stories

  1. What Russia invasion means for companies and compliance. Tom with a series in the FCPA Compliance and Ethics Blog. Matt Kelly in Radical Compliance.
  2. Dick Cassin says sanctions may lead to more corruption in the FCPA Blog.
  3. Jaclyn Jaeger looks at supply chain disruption and issues in Compliance Week (sub req’d)
  4. Matthew Murray asks if Putin invaded Ukraine to advance corruption, in GAB.
  5. Chasing oligarchs’ money, from the Washington Post.
  6. The Swiss approach to Ukraine crisis. Mark Pieth in Risk and Compliance Europe.
  7. Mike Volkov focuses on new and evolving sanctions, in Corruption Crime and Compliance.
  8. Economic nationalism and corporate governance. Martin Geller, in Harvard Law School Forum on Corporate Governance.
  9. Illicit finance and High-value art. Sullivan & Cromwell lawyers in Compliance and Enforcement.
  10. The invasion and cybersecurity. Jonathan Armstrong in Cordery Compliance.

Podcasts and More

  1. In March on The Compliance Life, I visit with Audrey Harris, Managing Director at AMI, formerly CCO at BHP. In Part 1, she discusses her academic background and early professional career.
  2. On the FCPA Compliance Report, Tom has a 2-part series with Trade Compliance guru Matt Silverman on the full extent of possible Russia sanctions (Part 1) and the corporate response you need to make (Part 2).
  3. Tom and Loren Steffy look energy issues and fallout from the Russian invasion in Greetings and Felicitations.
  4. Tom and Matt Kelly take a deep dive into the compliance weeds about the Russian invasion on Compliance into the Weeds.
  5. Silvia Surman devotes the entire week to Russian trade sanctions and economic issues in The Compliance Kitchen.
  6. Tom celebrates Texas Independence Day and the anniversary of the Alamo in a podcast with Don Frazier, Executive Director of the Texas Institute at Schreiner University on The Hill Country Podcast.

Tom Fox is the Voice of Compliance and can be reached at tfox@tfoxlaw.com. Kristy Grant-Hart is Compliance Kristy and can be reached at kgranthart@sparkcompliance.com.

Categories
Daily Compliance News

November 30, 2021 the New Blood Diamonds edition


In today’s edition of Daily Compliance News:

  • IDB debars Belgium engineering company for fraud and corruption. (FCPA Blog)
  • Are batteries the new blood diamonds? (NYT)
  • Esper sues DoD over book redactions. (WSJ)
  • NY highest court holds disgorgement is not a penalty. (D&O Diary)
Categories
Compliance Kitchen

America’s Supply Chains


The Biden Administration’s 100 day review first set of reports under the “America’s Supply Chains” Executive Order are out and we take a look at what the findings and where is the White House planning to take them.