How AI Is Helping With Global Compliance
Remaining compliant with international trade regulations is paramount to a business’s success. From an ethical standpoint, companies want to make sure their entire operation is free of human rights violations or other associations with bad actors. And from a business perspective, compliance with U.S. Customs & Border Protection (CBP) ensures your supply chain remains efficient and profitable.
But in today’s evolving world, compliance is a moving target. Advanced technology is allowing CBP to screen shipments more efficiently and effectively than ever before. It also helps them identify new risks and entities with ties to unethical business practices. As a result, CBP is frequently updating its regulations and putting the onus on importers to know where their goods are coming from. In January, they added 37 new entities to the Uyghur Forced Labor Protection Act (UFLPA) Entity List, bringing the total number to 144.
All this begs the question, how are companies (especially small to midsize companies) expected to keep up all this? One solution is through the same technology CBP uses to screen shipments: Altana. Through Scarbrough’s partnership with Altana, we can offer our customers access to their value chain mapping capability at a fraction of the cost required to access AI on one’s own. Because while AI is an incredible tool, the cost can become prohibitive to smaller businesses.
In the first six months of our partnership, we’ve been able to help many clients shed light on their supply chains and illuminate further down their list of suppliers. This part of Altana’s software is especially helpful to importers because while many companies know their Tier 1 or even Tier 2 suppliers, it gets much harder to track further down the line.
In fact, one of our clients took advantage of this service and uncovered a potential risk a few tiers down their supply chain. They started screening their imports with us in 2024 and their supply chain repeatedly came back clean. This client brought in a new commodity and once that was introduced into their supply chain, Altana immediately flagged risk factors with one of the suppliers. This allowed them to be proactive and make changes before any major problems arose.
Even if a company has a great relationship with their Tier 1 supplier, it is so difficult to expect that supplier to know everything that happens leading up to them receiving a product. It’s very likely they won’t know if suppliers further down the line are associated with Forced Labor. This is where AI becomes so helpful to importers. It allows them to track their products all the way to the raw materials, so they don’t have to rely on their suppliers’ word to know if they’re remaining compliant.
Another common misconception is that if an importer screens their supply chain once, they are good for the year. Unfortunately, this isn’t the case anymore. With the changing nature of CBP’s regulations, an entity that shows up clean one week could show up as a potential problem the next week. This speaks to the importance of consistently monitoring a supply chain to proactively avoid disruptions as much as possible.
Another Scarbrough client was an early adopter of Altana’s screening technology and consistently returned clean reports. Then after an update to CBP’s UFLPA Entity List, a supplier further down their supply chain was flagged and that risk factor impacted many other parts of their supply chain. Without consistent screening this could have become a much larger problem, but they were able to act quickly to avoid any major disruptions.
Constant changes, both from CBP and with suppliers further down the supply chain, make compliance an ever-moving target. In the past, companies could rely on a few people on their team to keep up with new regulations and releases, but those days are well behind us now. As technology and visibility continue to evolve, so too must importers. Software providers like Altana provide us with the tools to more effectively monitor our business associations, but it is on us to use those tools to meet compliance standards and engage in ethical business practices.
If you have questions about Altana or how we can leverage the platform to help your business, please reach out to your Scarbrough representative today for custom solutions.
