What steps can companies take to prepare and protect themselves against intensifying supply chain risk arising from trade wars and sanctions?
An extract from the 2021 edition of Asia-Pacific Investigations Review. The whole publication is available at https://globalinvestigationsreview.com/edition/1001536/asia-pacific-investigations-review-2021
Sanctions and trade restrictions are not new tools in international trade and foreign policy. Correlated with the global shift towards nationalism and protectionism over the past few years, these tools have been pulled out of the toolbox with explosive frequency. They have been used to combat wide ranging concerns including data privacy, cybersecurity, IP theft, trade deficits, human rights, environmental issues and geopolitical issues, such as in Crimea and Hong Kong.
The US–China trade war in particular has been a key point of focus for the global economy throughout the Trump administration, escalating to a feverish pace leading up to the 2020 US presidential election even as companies struggle to address the economic fallout of the Covid-19 pandemic. Economic sanctions, export controls and tariffs are ostensibly intended to rebalance the bilateral trade account, but some interpret these moves as a deliberate US led effort to fundamentally decouple the two economies. While this economic battle intensifies, what steps can companies take to prepare and protect themselves?
Recent developments in the US-China relationship have a far wider impact on global business growth prospects and supply chains. Combine this with other notable trade restrictions involving countries such as North Korea, Myanmar, South Korea and India, doing business in the Asia-Pacific region carries more risk than ever before. The Covid-19 pandemic making many businesses even more vulnerable to external risks, and no party can afford the wider impact of a full-blown trade war between the US and China.
In this chapter for GIR’s Asia-Pacific Investigations Review 2021, FRA Founding Partner Frances McLeod, Partner Drew Costello and Director Weng Yee Ng explore how these recent economic policies have altered the supply chain landscape and offer their practical guidance on how to mitigate risk and cut through the complexity. The authors draw out specifics relevant to the management of supply chains from the essential components of a sanctions compliance programme outlined by the US Office of Foreign Assets Control (OFAC)’s framework for compliance commitments.