Trade compliance and internal controls in a dynamic environment

Increased scrutiny of white-collar crime and the rapid implementation of new tariffs in the U.S. has elevated compliance risks for companies. Firms should proactively assess and enhance existing compliance programmes to keep pace with ongoing policy changes. Forensic accountants can play a critical role in assessing the operating effectiveness of compliance programmes and internal control frameworks and advising companies during regulatory investigations.
 
Shifts in federal policies and initiatives
 
Recent changes in U.S. federal trade policy and enforcement initiatives signal an enhanced focus on protecting domestic interests. In May 2025, the Department of Justice (DOJ) released a statement outlining the harms white collar crime poses to the U.S. and its renewed commitment to hold offenders accountable through investigation and prosecution.[1] The DOJ identified 10 priority areas of enforcement, including trade and customs fraud and tariff evasion. It emphasised that enforcing trade laws helps ensure a level playing field for the U.S. in global commerce. The DOJ’s heightened focus on investigating and prosecuting white-collar crime underscores the need for companies to review their internal controls and assess whether they adequately address compliance risks considering new trade policies.
 
Enforcement of tariff-related violations under the False Claims Act (FCA) is expected to intensify as trade compliance remains a top economic and national security priority. The FCA applies to any individual that knowingly submits, or causes to submit, false claims to the government. Such individuals are liable for three times the government’s damages plus a penalty that is linked to inflation.[2] The FCA also allows private citizens to file suits on behalf of the government against those who have defrauded it (a “qui tam” suit). In fiscal year 2024, there were 558 settlements and judgements under the FCA, exceeding $2.9B in total penalties.[3] Whistleblowers filed 979 qui tam lawsuits, the highest number in a single year.[4]
 
Non-U.S. based companies must also comply with the FCA if they provide goods or services to the U.S. federal government. In calendar year 2024 alone, the U.S. government awarded more than 112,000 contracts to foreign companies, totaling $14.2 billion in obligations.[5] Any entity providing services as part of a U.S. government contract must be diligent in evaluating and ensuring its compliance with U.S. trade policies.
 
The DOJ has historically prosecuted international companies for violating the FCA. For example, in February 2024, a German airline settled an FCA case for $26.8 million after failing to remit mandatory passenger fees it had collected to the U.S. government.[6]
 
Implementation and enhancement of internal controls
 
U.S. regulators provide specific guidance for establishing effective compliance programmes for trade-related matters[7] and recommend entities subject to U.S. jurisdiction implement internal control frameworks to ensure compliance with federal regulations.[8] The key elements found in the regulatory compliance guidance and internal control frameworks include the following:
 

• Control environment:Senior leadership establishes the tone at the top by promoting ethical values, a culture of compliance, and accountability across the organisation.
• Risk assessment:Companies should routinely conduct risk assessments to identify and evaluate the significance of potential risks across the organisation.
• Control activities:Companies must establish effective policies and procedures to identify, report, and document risks.
• Testing and auditing:Routine testing and auditing compliance helps a company assess the effectiveness of their processes and can assist in identifying areas for improvement.
• Monitoring:Ongoing evaluations of current internal controls and compliance programmes to determine if they are present and functioning.

 
By integrating these components into their operations, companies can enhance their ability to navigate the complexities of trade compliance and mitigate potential risks associated with violations.
 
A strong compliance programme is built on effective internal controls. Both domestic and international organisations should ensure their internal controls, at a minimum, identify, track, and adapt to change in the following areas:
 

• Tariff obligations associated with business operations and frequently changing requirements;
• Regular and timely surveillance of trade-related documentation to ensure compliance with tariff requirements; and
• Enhanced segregation of duties to mitigate the risk of errors or fraud, including clear payment authorisation procedures to ensure only authorised personnel, businesses, and/or agencies are paid, and for the correct amount.

 
Role of forensic accountants
 
While strong internal controls can significantly reduce the risk of noncompliance with trade policies, they cannot eliminate it entirely. Even well-intentioned companies may become subject to government investigations, which can be triggered internally (through whistleblower reports, for example) or externally (via regulatory inquiries). Investigations are often lengthy, costly, and can lead to reputational damage. If regulators are involved, the investigations commonly expand in scope and extend to additional business areas and/or international operations.
 
Forensic accountants can play a significant role in trade-related matters by applying investigative expertise and financial insight to identify control weaknesses, quantify potential exposure, and help organisations mitigate economic losses and reputational setbacks. They can also assist in developing and implementing remediation plans.
 
Conclusion
 
Companies should develop a multi-faceted approach to address rapid changes in trade policy and enforcement initiatives by enhancing internal controls, strengthening compliance programmes, and engaging experienced advisors when necessary.
 
Floyd Advisoryis a consulting firm providing financial and accounting expertise in areas of SEC reporting, transaction advisory, investigations and compliance, valuation and strategy, data analytics, and litigation services. Our team has significant experience with forensic accounting and operational investigations, anti-corruption matters, financial analysis, technical accounting and financial reporting matter, and reviewing and enhancing compliance programmes. Our clients include law firms, private equity firms, Fortune 500 companies, SEC registrants, private and closely held companies, CEOs, CFOs, boards of directors, government agencies, and not-for-profit organisations, among others.
 
Brian Loughman
Floyd Advisory LLC
T: (646) 449-7268
bloughman@floydadvisory.com
 
Brian Loughman, CPA, CFF, FCA, is a Partner at Floyd Advisory. He has extensive experience advising outside counsel, executive management and other stakeholders on forensic and integrity-related matters. He has managed investigations and remediation efforts for audit committees, management, trustees and outside counsel. Investigative topics have included accounting fraud and restatement issues; bribery and corruption; trade compliance; and occupational fraud and money laundering. Brian’s experience includes leading cross-cultural teams investigating and remediating potential corruption violations. Prior to joining Floyd Advisory, Brian was the Global Markets and Americas Leader for Ernst & Young LLP’s Forensic & Integrity Services practice.
 
Ryan Brown
Floyd Advisory LLC
T: (646) 449-7273
rbrown@floydadvisory.com
 
Ryan Brown, CPA, CFE, is a Senior Manager at Floyd Advisory. He has extensive experience across a broad range of accounting and finance matters. His work includes assisting legal counsel with internal investigations, SEC and DOJ related investigations, white collar defense matters, post-acquisition disputes, measurement of damages or business losses, complex business disputes, and other forensic accounting assignments. Mr Brown has participated in teams supporting expert testimony and investigative services to bring clarity to complex financial reporting and litigation matters.
 
Libby Tagliaferro
Floyd Advisory LLC
T: (617) 586-1088
etagliaferro@floydadvisory.com
 
Libby Tagliaferro is a Senior Associate at Floyd Advisory. She has experience providing support in white collar crime matters related to alleged fraud and embezzlement, as well as advising companies and their legal counsel in complex accounting disputes. She has advised both public and private companies through federal investigations related to financial fraud and assisting companies with internal investigations related to employee misconduct, theft, and embezzlement. Ms Tagliaferro has also assisted companies in applying GAAP in contractual agreements related to profit sharing arrangements or earnouts in post-acquisition disputes.