With the demand for overseas trade expected to undergo a surge of record-breaking growth over the coming decade, global risk and compliance specialists GWCI have warned British companies trading overseas to do their due diligence when dealing with international third parties for the first time or pay the price.
Citing the conclusion of Brexit as a catalyst for the forecasted growth, GWCI believes that importers and exporters will be further inclined to take greater risks on who they are willing to do business with in the future now the UK is on the cusp of entering a period of unprecedented economic opportunity.
Despite the longevity of Brexit, UK companies sold £689 billion worth of goods and services overseas last year which was up 5 per cent on 2018 – with a 0.9 per cent fall in sales to the EU compared to a 13.6 rise to the rest of the world. Selling £170.6 billion worth of goods to EU countries in 2019, international exports to the rest of the world hit £201.5 billion.
After a survey conducted by HSBC suggested that international trade is set to increase over the next 12 months, with the demand for British exports also forecasted to double by 2030, GWCI have predicted that the UK will see a rise in businesses venturing into unknown territories and partnerships, leaving themselves open to multi-million pound fines or even potential jail sentences.
Graham Welland, CEO of GWCI commented: “With the UK no longer a member of the European Union, export growth is likely to increase exponentially over the next five to ten years as the country looks to further position itself as an independent trading nation and seeks new trade deals with key partners across the world – away from the comfort blanket of Europe.
“As the country establishes itself as a newly independent trading nation, UK businesses will year on year become less reliant on the EU for trade and instead will look to strike new trade deals beyond Europe and open brand new markets to make it easier to meet global demand and further increase their bottom line.
“However, whilst exciting opportunities await for exporters across the UK, we urge businesses to heed caution when trading further afield, especially for the first time as without the appropriate due diligence British companies could quite easily be putting their reputation, brand and financial security at risk through inadvertently becoming associated with unethical or dubious organisations.
“We expect that the growth of trade out from the UK over the next decade is likely to correlate with that of an increased number of exporters falling foul of regulations and policies through unintentionally becoming associated with unethical or sinister businesses; leaving them open to serious legal and financial penalties that have the potential to not only tarnish their brand but also lose key contracts and halt the progression of their company.”
Having had first-hand experience of providing risk mitigation intelligence and advice to companies large and small for over 40 years, Graham has further advised that UK companies be proactive instead of reactive by ensuring that there are protections in place before signing on the dotted line with any overseas contracts, regardless of how lucrative they may appear to be.
With a collective experience of over 60 years in compliance, GWCI offers a pre-emptive approach where they strive to educate companies about the dangers of failing to appropriately research their markets or entering into commercial partnerships without knowing who they are or what they are involved with.
Graham added: “UK exporters are already inadvertently becoming involved with businesses that are unethical or involved with dubious activities as they are making the mistake of failing to appropriately investigate the distributor, customer or country in which they are trading into.
“At the end of the day you would not get in a car without it being insured so why is gaining risk intelligence on foreign partners and suppliers any different?
“Even by doing something as simple as a quick internet search on the company they are in talks to trade with, businesses can potentially save hundreds of thousands of pounds on legal fees to exit the contract they have agreed with a dubious partner. Or even on PR crisis management in the attempt to contain the long-term reputational damage of being associated with such an unethical or adverse organisation.
“It is also important to remember that whilst international third parties may appear legitimate on the surface, it is not uncommon for businesses to have parent companies which may have more sinister routes – that in our experience have emerged to be as extreme as organised crime and even terrorism.
“At GWCI we would remove the anxiety of dealing with foreign operators by offering bespoke, detailed reputational reports that provide all the insights and assurance that businesses need to confidently conduct business throughout the world.
“Our reports will reveal any and all misgivings that an individual or company has against them. This can range from carrying out ethical screening, consideration of the dark web, previous history of issues with bribery and corruption, company background and a screening process of the individuals involving within that company.”