Lexis Nexis Risk Solutions
Lexis Nexis Risk Solutions,

August 26, 2022

The relentless supply chain pressures following the onset of the pandemic are ratcheting up even further as the Russian conflict with Ukraine grinds on. Maintaining a durable and highly-responsive supply chain is mission-critical. Logistics companies, shipping lines, freight and air providers are at the epicenter of helping their clients preserve supply chain integrity and protecting their own businesses from a trade compliance misstep. This article explores top considerations for improving supply chain security in today’s turbulent geopolitical environment.

Outpacing Trade Volatility with Optimal Risk Visibility

The sheer velocity and volume of sanctions against Russia open significant vulnerabilities across the global trade landscape. The net count of new Office of Foreign Assets Control (OFAC), Office of Financial Sanctions Implementation (OFSI) and European Union (EU) sanctions designations against Russia-related programs totaled over 2,300 in the first 41 days following the Russian invasion of Ukraine.1 Plurilateral sanctions targeting people, entities and ports-of-embarkation were immediately followed by expansive trade restrictions covering an unprecedented level of granularity around Dual-Use Goods, Airspace, Technologies, Export Controls and more. The extensive and ever-growing list of potential global sanctions violations tied to Russia and Belarus and goods banned by the Bureau of Industry and Security is evolving in real time. Logistics, freight, shipping and air companies need to match that pace by maintaining real time risk visibility across every point of the supply chain and leveraging up-to-date screening intelligence reflecting the immediate scope and specificity of current sanctions requirements and trade restrictions.

End-to-End is Not Enough in a Tenuous Global Trade Environment

Current geopolitical and macroeconomic events are contributing to more fragmented and complex global supply chains. The levels of fragility and friction inherent in today’s global trade climate foster greater opportunities for risk to enter a supply chain through a third-party participant or at the point of re-export. Thoroughly screening all engaged trading parties and their associates before onboarding a relationship is an essential first step in any trade compliance procedure. Understanding the potential risk represented by players involved in a supply chain, and their connections, across the manufacturer, the logistics company, the freight forwarder, the shipping company and the vessel helps mitigate many compliance and trade issues upfront. End-to-end trade screening is integral, yet the dynamic nature of sanctions against Russia and other geopolitical events demand an additional, more optimized step in trade and compliance screening. Proactive and ongoing monitoring of the pertinent parties involved in a trade provides a more continuous and more current view of potential supply chain risks and helps businesses respond to the high frequency of ongoing updates to sanctions lists and trade restrictions. Sanctions and trade violations have the potential to entirely halt production and wreak long-term havoc on a company’s reputation, revenue targets and shareholder value. Ongoing monitoring adds a better optimized layer of protection against the supply chain risks that few businesses have the margin of error to overlook.

Keeping Digital Footprints on Your Risk Radar is Critical

Effectively monitoring risk in today’s global trade climate means extending assessments to include the digital footprint of participants in your supply chain. Market chaos and geopolitical uncertainty breed creativity in bad actors seeking to evade sanctions and trade restrictions. Digital channels offer a level of increased anonymity and complex technologies, such as VPNs (Virtual Private Networks), Proxies and The Onion Routing Project (TOR) browsers, help obfuscate or hide a consumer’s identity or location during a transaction. Digital sanctions threats have been on an upward trajectory in recent years and recent events only exacerbate this trend. The LexisNexis® Digital Identity Network® recorded a 250% increase in payments made on devices using a TOR browser or VPN in the days immediately following the Russian invasion of Ukraine.2 Demand for VPNs in Russia increased 2,692% between February 24 and March 24, 2022.These dramatic increases illustrate the importance of using compliance tools equipped to dynamically assess digital identities, device intelligence and location-based risk to prevent digital sanctions evaders from impacting your supply chain ecosystem.

Fortifying Supply Chain Integrity Across the Full Lifecycle of a Trade

Successfully maintaining a secure and agile supply chain in today’s accelerated risk environment gives your business competitive advantage in the crowded global trade market. Your customers want the confidence that your compliance strategy optimizes supply chain integrity by outpacing the real time obstacles and continuously changing sanctions and trade restrictions. Proactively protecting your business against sanctions and trade violations signals that your clients’ supply chain objectives are your top priority.

LexisNexis® Firco™ Trade Compliance Manager takes supply chain visibility to a new level by delivering a more comprehensive view of vessel journeys and interactions along the way. An end-to-end view across the trade helps compliance teams automate and document risk decisions while streamlining critical workflows. Trade Compliance Manager provides alerts of port entrance and anchorage and potential ship-to-ship transfers, including vessel names, location and type of transfer. The solution also offers alerts for AIS transponder anomalies, “dark activity,” and the potential activity taking place during dark periods. Firco Trade Compliance allows users to access 10 years of extensive vessel history data, including vessel movement, port entrance, anchorage and departure, ship-to-ship transfers and dark activity. This expanded level of visibility across the trade helps your business answer the increased specificity of today’s dual-use goods trade restrictions and plurilateral sanctions oversight.

The accelerated regulatory pressures surrounding global trade show little sign of abating. Taking steps to increase risk visibility across your supply chain and fueling decisions with real time sanctions and trade intelligence is critical. The right compliance strategy can help your business survive today’s turbulence and spot trade risks before they impact key relationships and your reputation.

Learn more about our trade compliance solutions.

1. https://risk.lexisnexis.com/insights-resources/article/perfect-sanctions-storm
2. LexisNexis® Risk Solutions Internal Research Analytics
3. Sun, Menqui, “Compliance Pros Rethink use of IP Addresses to Enforce Sanctions Amid Russia Ukraine Crisis”, Wall Street Journal, April 1,