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D19 · GOVERNANCE

SC Governance, Compliance & EthicsGobernanza SC, Cumplimiento y Ética

The rulebook — legal, regulatory, and ethical frameworks within which the supply chain must operate.Las reglas que protegen la cadena de sí misma y del entorno.

Scope boundary:Alcance: D19 covers supply chain governance (governance frameworks and accountability structures, procurement compliance including 3-way match and vendor onboarding, anti-corruption and anti-bribery including FCPA and UK Bribery Act and Mexico anti-corruption law, trade sanctions and export controls including OFAC and BIS and Denied Party Screening, and supplier audit programs with corrective action and continuous monitoring) and ethics, human rights, and labor standards (responsible sourcing including conflict minerals and OECD human rights due diligence, labor standards compliance including ILO conventions and US UFPLA forced labor prevention, supplier code of conduct implementation and UNGP grievance mechanisms, gender equality and supplier diversity programs, and supply chain transparency and traceability including blockchain and origin certification).
Governance Dimension · D19
5 Sub-dimensions · Click to expand L2 detailClic para expandir detalle L2
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L2 · Supply Chain Governance
Governance frameworks & accountability structures, procurement compliance (PO authorization, spend controls, 3-way match), anti-corruption & anti-bribery (FCPA, UK Bribery Act, Mexico law), trade sanctions & export controls (OFAC, BIS, DPS), and supplier audit programs with corrective action.
› L2N2
The governance and compliance layer of the supply chain — governance frameworks, procurement controls, anti-corruption programs, sanctions screening, and audit systems that ensure the supply chain operates within legal and regulatory boundaries.
L3 Sub-componentsSubcomponentes L3 5 items · click to explore elementos · clic para explorar
01
Supply chain governance frameworks: policies, controls & accountability structures
COSO ERM + segregation of duties in procurement. SOX Section 404 applies to Mexican subsidiaries of US-listed companies. ISO 20400 Sustainable Procurement standard.
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02
Procurement compliance: PO authorization, vendor onboarding & spend controls
3-way match eliminates 95% of payment errors. RFC/SAT vendor validation + bank account verification prevents BEC fraud. Spend authority matrix is the foundational procurement governance tool.
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Anti-corruption & anti-bribery in supply chain: FCPA, UK Bribery Act & Mexico law
FCPA applies to global SC partners of US-listed companies. UK Bribery Act: strict liability for failure to prevent bribery by third parties. Facilitation payments (“mordidas”) are illegal under all three frameworks.
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04
Trade sanctions & export controls: OFAC, BIS & Denied Party Screening
OFAC SDN violation: up to $1M USD per transaction + criminal prosecution. Automated DPS against 200+ sanction lists is mandatory for any company doing international trade.
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Supply chain audit programs: supplier audits, corrective action & continuous monitoring
Tier 1 critical: annual full audit. CAR: 30 days for critical findings. Remote audits 60–70% as effective as on-site. SMETA social audit mandatory for suppliers to European retailers.
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L2 · Ethics, Human Rights & Labor Standards
Responsible sourcing (conflict minerals, OECD human rights due diligence), labor standards compliance (ILO conventions, UFPLA forced labor prevention), supplier code of conduct & UNGP grievance mechanisms, gender equality & supplier diversity, and supply chain transparency & traceability (blockchain, origin certification).
› L2N2
The ethics and human rights layer of the supply chain — responsible sourcing, labor standards compliance, supplier codes of conduct, diversity and inclusion, and traceability systems that ensure the supply chain respects human rights and operates with integrity.
L3 Sub-componentsSubcomponentes L3 5 items · click to explore elementos · clic para explorar
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Responsible sourcing: conflict minerals, human rights due diligence & OECD guidelines
Germany LkSG (2023): mandatory human rights due diligence for >3,000 global employees. SEC Rule 13p-1: annual conflict minerals disclosure for US-listed companies.
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Labor standards in supply chain: ILO conventions, child labor & forced labor prevention
US UFPLA (2022): rebuttable presumption that goods from Xinjiang involve forced labor. Mexico Protocolo de Actuación sobre Trabajo Forzoso (2024). CBP WROs can detain shipments.
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03
Supplier code of conduct: implementation, monitoring & grievance mechanisms
SCoC signed by 100% of Tier 1 suppliers as contract condition. Anonymous ethics hotline for supplier workers required by UNGP.
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Gender equality & diversity in supply chains: WEPs, supplier diversity & inclusion
Diverse suppliers: 2–10% cost advantage in leading global company procurement evaluations. WeConnect International certifies women-owned businesses for supplier diversity in Mexico.
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Supply chain transparency & traceability: blockchain, QR codes & origin certification
Blockchain traceability: audit cost reduction 70–80% vs. paper. Mexico COFEPRIS pharmaceutical traceability mandatory since 2023. QR codes link product to full supply chain journey.
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L2 · Trade Compliance & Customs Management
Import/export compliance, sanctions screening, export controls (EAR/ITAR), free trade agreement utilization, and trade facilitation programs (C-TPAT, AEO) — the regulatory infrastructure of international SC.
› L2N2
Import/export compliance, sanctions screening, export controls (EAR/ITAR), free trade agreement utilization, and trade facilitation programs (C-TPAT, AEO) — the regulatory infrastructure of international SC.
L3 Sub-componentsSubcomponentes L3 5 items · click to explore elementos · clic para explorar
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Import/export compliance: HTS classification, customs valuation, and duty management
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Sanctions screening and restricted party management in SC
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Export controls: EAR, ITAR, and dual-use regulations for SC operations
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Free trade agreement utilization: Rules of Origin and certificate of origin management
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Trade facilitation programs: C-TPAT, AEO, and trusted trader status
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L2 · Anti-Corruption, Sanctions & Financial Crime
FCPA and anti-bribery compliance, OFAC sanctions, procurement fraud prevention, beneficial ownership transparency, and whistleblower programs — protecting the supply chain from financial crime risk.
› L2N2
FCPA and anti-bribery compliance, OFAC sanctions, procurement fraud prevention, beneficial ownership transparency, and whistleblower programs — protecting the supply chain from financial crime risk.
L3 Sub-componentsSubcomponentes L3 5 items · click to explore elementos · clic para explorar
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FCPA and anti-bribery compliance in SC: third-party risk management
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OFAC and financial sanctions compliance in procurement and logistics
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Supply chain fraud prevention: procurement fraud, invoice fraud, and collusion
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Beneficial ownership and supply chain transparency in the anti-corruption context
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Whistleblower programs and ethics reporting in SC operations
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L2 · Digital Governance & AI Ethics in SC
AI governance frameworks, data privacy compliance (GDPR/LFPDPPP), blockchain for traceability, SC cybersecurity governance, and smart contracts — the digital rule system for the autonomous supply chain.
› L2N2
AI governance frameworks, data privacy compliance (GDPR/LFPDPPP), blockchain for traceability, SC cybersecurity governance, and smart contracts — the digital rule system for the autonomous supply chain.
L3 Sub-componentsSubcomponentes L3 5 items · click to explore elementos · clic para explorar
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AI governance in SC: accountability, explainability, and human oversight
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Data privacy compliance in SC: GDPR, LFPDPPP, and cross-border data transfers
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Blockchain for SC traceability: from pilot to production-grade implementation
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SC cybersecurity governance: protecting the digital supply chain from attacks
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Smart contracts and digital procurement: legal validity and operational implementation
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