ONESOURCE: Navigating Complexities of Global Trade, Taxes

These days, keeping up with regulatory tax compliance is no easy task, especially when the current US administration has applied sweeping tariffs on products coming from its main trading partners, affecting transnational companies and international stakeholders.

To cushion the fallout from these tariffs, Thomson Reuters, a leading provider of business information and technology services, has developed ONESOURCE, a global trade software solution designed to help companies manage their global trade operations, including import and export compliance, customs clearance, and supply chain management. 

The Office of the United States Trade Representative reported that US total goods trade with Mexico totaled US$839.9 billion in 2024. US goods exports to Mexico during that same year were US$334.0 billion, whereas US goods imports from Mexico in 2024 totaled US$505.9 billion, up 6.4% (US$30.6 billion) from 2023. Commercial trade between Mexico and the United States has never been this strong and companies should rely on software that will help them navigate the intricacies of trade. 

“While ONESOURCE software cannot directly exempt companies from tariffs, it can help companies navigate the complexities of trade regulations and identify potential opportunities to minimize or avoid tariffs,” said Jorge Javier Franco, senior solution consultant for Thomson Reuters LATAM. 

Mexico's auto and manufacturing industries play a fundamental role in this trade scheme. Companies can benefit from ONESOURCE Global Trade in several ways. For instance, the solution allows companies to automate and streamline customs clearance processes, reducing the risk of delays, fines, and penalties. This is particularly important for the auto industry, where just-in-time production and delivery are critical, explained Franco. 

Regarding duty and tax management, the software helps companies navigate complex duty and tax regulations, ensuring compliance with Mexico's tax laws and ordinance, such as the IMMEX program (Manufacturing, Maquiladora, and Export Services Industries). The advantages are many, with cost savings and reduced risk of non-compliance among them. In regard to tariff classification, ONESOURCE can help companies accurately classify their products to ensure they are using the correct Harmonized System (HS) codes, which can impact the applicable tariff rates. 

ONESOURCE can also assist companies in identifying opportunities for Duty Drawback, which allows them to reclaim duties paid on imported goods that are later exported or used in the production of exported goods.

Regarding supply chain optimization, ONESOURCE provides a clear vision into the entire supply chain, enabling companies to optimize their logistics, reduce transportation costs, and improve delivery times. This is essential for many trading industries, especially the auto industry, where supply chains are complex and global, explained Franco. 

Free Trade Agreement - USMCA 

ONESOURCE ensures compliance with Mexican regulations, such as the Mexican Ministry of Economy's (SE) requirements for customs clearance, taxation, and free trade agreements (FTAs) like the USMCA. In short, ONESOURCE Global Trade helps companies take advantage of Mexico's FTAs, by identifying eligible products, managing certificates of origin, and ensuring compliance with FTA rules. 

“Integration with existing systems is a key element of the software; for instance, it can be merged with existing enterprise resource planning (ERP) systems, such as SAP or Oracle, to provide a seamless and automated trade compliance process,” said Franco.  

By utilizing ONESOURCE Global Trade, companies in Mexico's automotive and manufacturing sectors can strengthen trade compliance, lower expenses, and boost efficiency, ultimately improving their competitiveness in international markets.

In light of the recent tariff implementations by the Trump administration, stakeholders and  companies need to have robust policies, procedures, and controls in place to address potential risks associated with trade sanctions. One way ONESOURCE can significantly contribute to a company's efforts to address potential risks is by providing a comprehensive suite of tools and services to help manage and mitigate these uncertainties. 

Franco outlines the following solutions: 

Sanctions Screening: ONESOURCE provides real-time sanctions screening against multiple lists, including OFAC, EU, and UN sanctions lists, to help companies identify and prevent transactions with sanctioned entities. 

Risk Assessment: ONESOURCE offers a risk assessment tool that helps companies evaluate their exposure to sanctions risks and identify areas for improvement. 

Compliance Program Management: ONESOURCE provides a compliance program management module that enables companies to establish, implement, and maintain a robust sanctions compliance program, including policies, procedures, and controls. 

Trade Compliance Automation: ONESOURCE automates trade compliance processes, including sanctions screening, license determination, and export control classification, to reduce the risk of human error and increase efficiency. 

Audit and Reporting: ONESOURCE provides audit and reporting capabilities to help companies demonstrate compliance with sanctions regulations and respond to regulatory inquiries. 

ONESOURCE Case Studies 

Thomson Reuters can boast that its clients, when using ONESOURCE, have achieved great results. For instance, a prominent aerospace company leveraged ONESOURCE to establish a robust sanctions compliance program, incorporating sanctions screening, risk assessment, and compliance management. This initiative enabled the company to decrease its sanctions risk exposure by 90%, effectively mitigating potential fines and penalties. 

In another case study, a multinational financial institution implemented ONESOURCE to streamline its sanctions screening process, achieving a 75% decrease in false positives and cutting manual review time by 50%.

In addition, ONESOURCE has provided significant benefits to various companies. For example, an oil and gas company successfully navigated the complexities of US sanctions on Iran using the software’s real-time sanctions screening and compliance guidance. This enabled the company to mitigate the risk of fines and penalties while maintaining its business operations in the region.

ONESOURCE has supported companies across various industries by ensuring compliance with critical regulations:

• Aerospace and Defense: Assisting companies in adhering to ITAR and EAR regulations, as well as sanctions related to countries such as China, Russia, and Iran.

• Financial Services: Helping financial institutions comply with sanctions regulations, including those focused on anti-money laundering (AML) and combating the financing of terrorism (CFT).

• Manufacturing and Trade: Supporting businesses in meeting export control and customs compliance requirements under various sanctions regulations.

ONESOURCE has extensive experience with key sanctions programs, including:

• US OFAC Sanctions: Providing real-time sanctions screening against OFAC's Specially Designated Nationals (SDN) list and other US sanctions lists.

• EU Sanctions: Offering real-time screening against EU sanctions lists, including those targeting Russia, Iran, and other regions.

• UN Sanctions: Ensuring compliance with UN sanctions lists, covering countries such as North Korea, Iran, and more. 

Technology

Technology plays a fundamental role in assimilating and analyzing data, assessing risk, and gaining visibility over potential trade sanctions exposure, especially as regulations become more rigid. By employing ONESORCE technology, companies can obtain great benefits. Franco provides a detailed explanation of how technology can assist.

For instance, when it comes to data aggregation, technology can collect and incorporate data from multiple sources, such as internal systems, external databases, and public records, aimed at offering a holistic overview of a company's trade operations. 

Data analytics are advanced analytics tools that can process vast datasets to detect patterns, trends, and anomalies, enabling companies to recognize potential risks and vulnerabilities. 

In addition, technology enables companies to evaluate risks (Risk Assessment) by analyzing data on customers, suppliers, and partners while also tracking regulatory updates and sanctions lists. 

In regard to sanctions screening, automated sanctions screening tools can quickly and accurately screen customers, suppliers, and partners against sanctions lists, such as OFAC, EU, and UN lists. 

Real-time Monitoring: Technology can provide real-time monitoring of trade activities, enabling companies to respond quickly to changes in regulations or sanctions lists. 

Software Solutions for Compliance Management: These assist companies in tracking and ensuring adherence to trade regulations, including sanctions, export controls, and customs requirements.

Audit and Reporting: Advanced technology offers audit trails and robust reporting features, allowing businesses to verify compliance, generate necessary documentation, and respond effectively to regulatory inquiries. In addition, machine learning algorithms can be applied to large datasets to identify potential risks and anomalies, and predict future risks. 

Cloud-Based Solutions: Utilizing cloud technology offers scalability, flexibility, and cost efficiency, allowing businesses to swiftly implement and manage trade compliance solutions. 

System Integration: Modern technology can seamlessly integrate with existing platforms like ERP, CRM, and supply chain management systems, ensuring an automated and efficient trade compliance process.

As regulations become more rigid, technology can help companies stay ahead of the curve by: 

Providing Real-time Updates: For instance, technology can contribute to real-time updates on changes in regulations and sanctions lists, enabling companies to deliver instant updates: Technology allows companies to stay informed about regulatory changes and sanctions lists in real time, providing swift adaptation to new requirements. In addition, it streamlines compliance through automation. By automating compliance processes, technology minimizes human error and enhances operational efficiency. It also Improves transparency. For example, advanced technology offers greater visibility into trade activities, helping businesses detect and address potential risks effectively. Lastly, facilitating audits and reporting. With audit trail and reporting capabilities, technology assists companies in demonstrating regulatory compliance and responding to inquiries from authorities. 

AI, Data Analytics  and Machine Learning

The use of AI, data analytics, and machine learning play a fundamental role in expediting processes and facilitating trend spotting, red-flagging, and reporting. 

Automated data analysis, AI, and machine learning algorithms can rapidly analyze large datasets aimed at identifying patterns, trends, and anomalies. In the case of predictive analytics, machine learning models can be trained on historical data to predict future trends and potential risks, prompting proactive measures to be taken, explained Franco.

Regarding trade compliance AI, data analytics, and machine learning can help with: 

Sanctions Screening: AI-driven systems can efficiently check customers, suppliers, and partners against sanction lists, quickly detecting potential matches.

Risk-Based Approach: Machine learning models assist in identifying high-risk entities and transactions, allowing for focused screening and monitoring.

Trade Finance: AI can examine trade finance data to detect risks and anomalies, such as irregular payment patterns or suspicious transactions.

Supply Chain Risk Management: Machine learning algorithms assess supply chain data to uncover risks and weaknesses, including supplier insolvency or regulatory non-compliance.

Regulatory Reporting: AI automates the creation of regulatory reports and submissions, easing the workload of compliance teams and reducing the likelihood of errors.

ONESOURCE Global Trade is a powerful solution that helps businesses navigate the complexities of global trade and tax compliance, enabling them to focus on growth, innovation, and success, said Franco.