In a recent study of 480 finance and supply chain professionals, CreditSafe found that 42% would still work with a supplier that had been sanctioned or involved in corruption, bribery, fraud, money laundering, or slave labor. This, despite the fact that 83% run a compliance check at least quarterly.

Matthew Debbage, CEO of the Americas and Asia for Creditsafe, suggests this contradiction belies a serious vulnerability in global supply chain management. “Many companies are simply running compliance checks to tick a box and show that they did the necessary due diligence. But they’re not using the results to protect the integrity of their global supply chains. It’s
more of a tick-box exercise than anything else. And this needs to change if brands want to restore customer confidence and position themselves for long-term revenue growth. That’s the purpose of compliance checks – to give you the information you need to avoid working with unethical, corrupt suppliers and, ultimately, prevent your company from incurring financial and
reputational damage as a result.”

How often do you run a compliance check on your international suppliers to determine if they have been sanctioned or involved in corruption, bribery, fraud, money laundering, or slave labor?

Source:  “The Murky Waters of Overseas Manufacturing,” CreditSafe – May, 2023 – page 10

Credit executives are often parties to these compliance checks. Moreover, they have a responsibility to make sure their customers have not been sanctioned. That, too, requires ongoing monitoring that goes beyond the initial credit approval.