Compliance Gaps Emerging in Cross‐Border Trade

August 07, 2025

📝Editor’s Note

Cross-border trade is under stress, AI regulation is tightening, and compliance leaders are under pressure to adapt fast. In this edition, we explore the ripple effects of rising U.S. tariffs, spotlight smart AI governance practices, and review top KYC tools for global onboarding. With enforcement risks rising, the emphasis is shifting from reactive reporting to proactive risk management across systems, suppliers, and strategies.

Tariffs Target Small Traders: Compliance Gaps Emerging in Cross‑Border Trade

Reuters reports that U.S. President Donald Trump has raised tariffs on Canadian goods to 35% for items falling outside USMCA provisions, hitting small and midsize exporters hardest. Large oil and gas firms remain largely exempt—99% of Canadian energy exports qualify for duty relief under USMCA rules. 

For companies operating at the margins of trade agreements, compliance complexity has surged: tracking eligibility criteria, managing documentation, and ensuring proper origin verification are now key challenges. Stricter audits and fines await firms that misclassify USMCA status. As these policies unfold, compliance teams must evaluate trade workflows, confirm supplier compliance, and retrain staff to avoid costly missteps in global supply chains.

✅ Best Practice Spotlight

Compliance and AI best practices for 2025

  1. Begin with pilot programs to assess AI tools before full-scale integration.

  2. Validate AI models for bias, accuracy, and explainability through testing.

  3. Establish cross-functional oversight with legal, audit and tech teams.

  4. Monitor AI tools continuously with KPIs and audit trails.

  5. Train staff on new AI governance policies and update them regularly.

🛠️ Tool of the Week

Best KYC Compliance Software

We have a list of the top-rated identity verification platforms designed to support global onboarding workflows. Some key features common across these tools include:

  • Automated document verification and biometric checks.

  • Continuous screening against sanctions, PEPs, and adverse media.

  • Risk-scoring and ongoing customer monitoring.

  • Detailed audit logs and regulatory reporting support.

  • Easy API integration and support for global jurisdictions.

🌟 Leader Spotlight

Code 3 Wins the 2025 Road Safety in Policing Award

Code 3 designs and manufactures visual and audible warning systems for emergency vehicles, earned the Road Safety in Policing Award in 2025. Their innovative technology—ranging from advanced siren systems to high-visibility lighting—aims to improve officer safety and reduce collision risks during high-speed responses. The award highlights Code 3’s impact on both operational efficiency and public safety, and underscores the role that engineered safety solutions play in modern law enforcement and visual compliance strategies.

🗳️ Your Compliance Take

Here are the results of our Tuesday’s poll.

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