The Descartes Systems Group Inc. (DSG) Earnings Call Transcript & Summary

Hello and welcome to our webinar session 5 Trends Every Trade Compliance Professional Should Know in 2024. My name is Asif, and I'm a Senior Marketing Manager with Descartes, and I'll be the moderator for this session. We scheduled an hour for this webinar with some time available at the end for any Q&As. You can submit any questions you have via the panel. You'll see with the go through webinar. We'll try and answer as many of them as possible sort of during and at the end of the session as well. If we do not get any plan to answer all the questions, we will provide a follow-up email with all the question and answers. The webinar is also being recorded, and we will provide a link with -- in a follow-up email. So now let's get started. Today's session is presented by Nicolas Urien, Trade Management Strategy Partner at Dojo, Thibaut Grandjean-Vernet, Trade Compliance Operations Lead Partner at Dojo; Konrad Preuninger, Senior Account Executive at Descartes. So I'll turn it over to you, Nicolas, to kick things off first.

Yes. Thanks, Asif. Thanks for the invitation. I'm very happy to be here with you today. So like you said, my name is Nicolas. I'm one of the partners at Dojo. Dojo is a company specialized in trade compliance management. So I think this is a topic of today. So happy to be here. And I'm not alone today. I'm also with Thibaut, which is also one of the partners at Dojo. He is our trade compliance lead. And yes, let's start, before we kick off, if I may, a bit of self-promotion. I have the chance together with Thibaut to be the co-host of podcast about trade compliance management. The name of the podcast is Six Days In Suez. It's a podcast where we invite trade compliance leaders to share their vision, about customs and trade compliance management. So if you like to hear trade compliance leaders, please follow us. The website is sixdaysinsuez.com. We're going to have amazing guests for the new season starting in a couple of weeks. So -- and you can also have our episode available on Spotify and Google podcast. That's for the self-promotion moment. And now maybe let's start indeed with the topic of today. But before we start, maybe a few intro remarks about the topic of today, 5 Trends Every Trade Compliance Professional Should Know in 2024. Just to be clear, we're not -- together with Thibaut, we're not fortunate tellers, right? And the idea today is not to be exhaustive. A trend is a trend. It's always against subjective. And there are undoubtedly many other trends in trade compliance in 2024. So we don't have a crystal ball. And therefore, we're not going to talk about sanctions, new potential sanctions, new -- potentially new trade barriers. The idea here is really to be a bit much more actionable about what we're going to say. We want to focus on actually what concretely matter for trade compliance manager, especially in-house customs and trade compliance manager. And in short, this presentation is for us an excuse to share some good practices in this domain. What we're going to present today are actually trends we have identified over the last quarters of 2023 and that we believe we expect to gain momentum in 2024, right? And last remark, our focus will be mainly EMEA. But of course, we'll be delighted to hear if those trends are also shared by our audience based in the U.S. or any other region in the world. So maybe let's start now with the first one.

Yes. Thanks, Nicolas. Hi, everyone, I am Thibaut. I am one of the partners of Dojo. So this first trend -- and we wanted to be provocative on that because it's not [indiscernible] first because it is, in our opinion, one of the biggest mistakes we've seen within companies in 2023, and we know it will continue into 2024. In short, if you want an advice for 2024, go back to the basics of trade compliance management. We all know that we are all in a constant firefighting environment, and it's sometimes difficult to define a clear strategy, but we also know that many trade professionals have the bad habit because they want to do good work of taking on new subjects and just finding bumps of overwhelmed. They are foundations that are basic to customs and trade compliance management. And for example, classification is one of them. And we'll dive into that a bit later, but classification must be at the basic of everything. So the idea here is not, of course, to say that new subject should not be managed. That hasn't to be the focus or everything, but -- that new subject should not be managed. But for instance, many of you've certainly worked on section issues this previous years, but the idea is to keep in mind that if you don't go back to the foundations of what we do, the foundation of the matter, we will continue to carry risk and put the company under pressure for other things because we don't master the basics. Your role, even if it is disgusting, is to alert on the importance of this issue of the basics, also in the new ones, but back to definition. And this can be done whenever you're taking a new position, but you can also use an external audit to do that because this will give you support to go back to the basics and to go back to this very, very specific foundations that the ones of trade compliance.

And maybe if I may add, Thibaut, indeed those foundations are almost always data-oriented foundations. It's indeed not a trend. Like you said, it was a bit provocative from us to put that as the first trend. But it's really exactly like you said, something we see in so many companies that are not, let's say, ready on the foundations of trade compliance management. Indeed, it's always data-oriented foundations. It's not always easy because it's time consuming. It's often boring projects that when you have to clean your customs master data personally, I call it customs master data detox. Like I said, it takes time. And what is always challenging for in-house trade compliance leaders, especially those who have been there for many years in the same company, is that they have to come back to their -- to the management to explain the need to get right now, that kind of project executed. And that's not a problem, by the way, if you've been in the same company for many years, and that's 2024, where you are going to say to everyone, the guys, this is the moment where we do need to clean our database. Classification is actually, we should be, like the starting point as always. And that's okay -- of course, if you join a new company, if you start a new job, it's always easier. When you join the new company, say guys, let's start with the foundation and let's potentially start with an audit and then let's start with a project around customs master data. But even if you've been in the same company for many years, you can do it. I would say it's potentially even a product that you should put as a priority for 2024. And this is what we wanted to share with you in this first trend. If there is no question, if there is no remark, we can move to the second trend, which is more a trend, I have to say. And this is a trend we have observed in 2023 for having support in many companies, in their trade compliance management transformation. And in 2024, we really believe companies will continue to transform deeply their organizations. And it will start with a shift in leadership. The role -- and that's something I'm pretty sure you all know and you have experienced that the role of trade compliance leader of in-house, a trade compliance leader has transformed and will continue to transform in 2024, shifting from a position more technical -- from a technical management position to a more managerial leadership position, right? Now management strategic skills are key to become and to be a successful to a compliance leader. And we've seen that in many companies. I'm referring again to the podcast, where we have invited some trade -- global trade compliance leaders and when you have a look at their background, it's true. Some of them are coming from -- with a trade compliance background, but many of them are not at all. And usually that's the one, who are more willing to transform. And they have one thing in common. They're all amazing leaders. They're all very good with people. And those leaders, even if they don't have necessarily the technical background that we would expect, they can be supported, by the way, by external advisers or other technical experts within the team. And that's what we see and that's what we strongly believe we're going to see also still in 2024. Now talking about transformation, we believe also that the main change regarding trade compliance management this year, but also in the coming years, will be around the management itself of the trade compliance organization. And the companies will continue to transform by focusing on their efforts on the main risk. And that's actually something very important. Yes, you have the foundation like we said in the first trend. But once your foundation are there, you cannot do everything, right? And the strongest organization will only focus on what can kill them. That's what we used to say the biggest risk. That's why I think it's mentioned on the slide. They will now execute risk-based management for good. Actually, the time of in-house customs and trade compliance team handling everything internally is over, right? And this is not simply efficient from a process point of view, from a resources point of view, looking at also all the upcoming challenges in trade compliance and customers. And to do so, the companies actually have only one option, it's to scale their trade compliance organization. To scale, they have 3 things to do. They have to continue to streamline to automate or -- and outsource their trade compliance processes, right? So that they can be more robust and more agile. The scalability, I don't know if it's a concept that some of you are aware about, but that's a counter that we see more and more in trade compliance strategy. In short, scalability means that your organization -- your trade compliance organization can absorb and increase of trade compliance activity without an explosion of your resources cost. And when your trade compliance activities decreased, you do not have to reduce your workforce internally. That's what we call a scaled trade compliance management organization. And of course, here, externalization of processes play a big role to support this path to scalability. I would finish this presentation on this trend by saying that we're going less and less to an organization where -- and that's actually a big mistake that we have seen in many organizations where the companies rely for one specific trade compliance topic on only one person, right? A good example is classification or sanctioned party screening, where you have actually one expert in-house managing everything regionally or globally for the entire company. Of course, this is very dangerous. It makes the company very fragile because when this person leaves, it creates, of course, a big risk from a compliance point of view, but also from a business continuity point of view. And this is the kind of fragility that scalability is trying to remove actually. Thibaut, you would like to share something?

Yes. And on that, Nicolas, I just wanted to add on to your point on what you were saying is that this is indeed a major change in the trade -- in the organization and also the way trade compliance team are conceived. What we've been seeing is that indeed, we have more managerial leadership, managers that are here to also manage projects or manage task, then they have external people or other type of teams to perform the repetitive things. But in general, the strong core trade compliance team are starting to get more -- like way smaller than they used to be because you have less people performing repetitive tasks. They tend to be better trained from a technical standpoint, but also from a managerial strategic standpoint. So they have of a grasp on the challenges they are to face and also -- going back to pay. They are also better paid because you need a better quality and you need also people, who are getting bigger compensation when it becomes their IT managing risk. And this is what we've seen. And on that, I think one of the cornerstones of putting that kind of strategy in place is to have also is to provide these people with effective external partners. You can give them the eligibility to the possibility to change volume and to change resources assessed as a job evolved. So this is a major trend. This is something that we'll continue to transform. And I think this will also shape the coming years.

I think if there is no question, then we can move to the next trend. Of course, everyone, we can take the questions afterwards during the Q&A session with pleasure. So now let's move to indeed to the third trend that we wanted to share with you today. It's a trend, again, that's undoubtedly will accelerate in 2024. And I have to say it's a good thing. Many companies keep on having structural problems in managing their brokers. They have basically too many of them. They struggle to retrieve data, no KPIs, no SOP in place. Sometimes mistakes are done. And this is why many companies decide and will continue to launch a strategy to select a limited number of brokers globally -- regionally and globally based on very specific criteria. This is what we call brokerage rationalization project, could be also brokerage optimization project, whatever, and the objective is the same. Just also to give you an idea, recently had a client, I think he had just for Europe 20 different brokers before we started the project. I did not even know we had 20 brokers in Europe available for large scale companies. Anyway, and you can ask, by the way, the [ folders ] and the brokers. This is really a trend. They have more and more projects where we ask them to apply to tenders to become the broker -- the main broker for a specific region for companies. But again, like we said before on the other -- on the two first trends and especially the second one, this cannot be done without preparation, right? Brokerage rationalization. And I'd like to share with you today a bit of insights regarding also the type of that kind of project we have managed for companies. First, you have to keep in mind, it will take time, right, if you want to rationalize your brokers. And it can be challenging, especially during the deployment phase when you're going to move from multiple brokers to 1 or 2 or 3 different brokers that you have spotted, but the most important part before you start actually to keep in mind and to do is that you have to define clearly your objective for this project. You have to go back actually to why you're going to use a broker, right? What's the objective to use a broker? And there are not a lot of objectives you can -- you have when working with a broker. There are only actually 3. Operational excellence, cost mitigation and data availability/system -- okay. Operations, costs, data and system. Advice, you can't have everything. You must actually choose what is your first priority when you're going to do this project of rationalization and you have to focus your energy on that one, okay? Especially when -- and that's what we advise of course, you have to open a tender, an RFP, RFQ, you call it whatever you want, how you want, and when you're going to try to contact all the brokers to answer to this tender. Actually keep in mind of always your objective, why are you moving from a situation where you have multiple brokers to just a few? Is it because you want to have a reduction of your cost? Is it because you want to import and export faster so you need a broker that will be like perfect in terms of customs clearance processes and customs lead time? Or you have -- and that's usually the reason why companies are doing it to give you a feedback based on what we have seen on the market. Most of the times, the companies are doing a brokerage rationalization project for data because they don't have -- especially in Europe, they have a problem -- having multiple brokers. If they want to put in place some kind of audit of their trade compliance and customs data and also just basically to do some post entry checks, this is a problem. So they want a centralized repository where they're going to have all the data, and that's the reason why they're going to move to 1 or 2 brokers to get their data. But you have to keep in mind, you can't have those 3 objectives with your broker, right? You have to pick up your first objective, and that's also a very important when you are going to design your scoring metrics, right? You're going to open a tender. You are going to have answers, but you can ask questions, of course, to the brokers, but more importantly, you're going to have the scoring metrics to assess and to evaluate the quality of the broker that is going to propose you to work with, right -- to work with you. And that's very important. And of course, you must establish clear criteria based on your objective. Again, cost is very important for you, then it has to represent 50% of the total evaluation, the total rate you're going to give to the candidate. And that's very, very important to keep in mind. Another remark is regarding in this process of selecting the right broker. So you need to pick up -- first, you have to keep in mind your objective, strong scoring metrics. But you have to work closely with your procurement and purchasing teams, of course. Trade compliance custom, usually, it's not their stuff, right? They don't really know brokers. They don't really know what actually they should expect from a third service supplier like a broker. You're there to help them, right, to guide them. But more importantly, they are there as well to ask the bad question, the difficult question to the broker to challenge them, right? Why? Because if they do it, it's not you, so you don't destroy, let's say, the relationship with your broker, which is key -- which will be key on the long run when you're going to select one specific broker. Last remark from my side, think about contingency plan. We always advise not to select one broker globally or even regionally. It's always better to have 2 brokers. Having already 2 brokers in place for large-scale company, it's already a great achievement most of the time. But again, it's -- take it as a real project, it can take time, but you'll get direct benefits having that kind of project set up. Thibaut, I don't know if you have any other remarks you'd like to share?

Obviously that's point and getting back to the objectives and how you should focus on 2 of these, not 3. But I mean, brokers and in general, we do work with exceptional professionals, but you cannot expect an all-in service from them. You cannot expect them to master everything because no one can. And also more importantly, and this is something we've seen in the past, and we keep seeing again and again and again, as do not expect your customers' brokers to be in charge of your compliance. They're not your trade compliance partner. They are not your trade compliance team. They're just a service provider. His job is to make sure that declarations are being filed and submitted. They will not have control over all your data and even more if they don't have access to them. And [indiscernible] they have control but there, do not expect your broker to do that. And one of the things we also see is some of our clients tell us, "Hey, well, the broker is actually performing the sanctioned party screening." It's fine. It's a good complement, but you still need to do that internally or still need to do that by yourselves because if the broker does it, maybe you don't know how it's been done and then you already have a process in place. It might not be compliant with what you are expecting. I'm not talking about the regulation -- I'm not saying anything about the regulation, but just what was your internal requirements are. In short -- and this is the main message. I have broker rationalization. They are exceptional professionals. They deliver it very well, but do not expand them to be compliance officer. This is not part of the mission. I don't know Nicolas, if you have something to add to that? If not, we can move to the fourth.

We can to the next one.

And on the fourth one and the fact that global trend environment is becoming more and more uncertain [indiscernible] what we just said about compliance. We said at the beginning also on the presentation that we wouldn't make any prediction. And the world and the trade compliance environment will remain uncertain, and it will keep changing in 2024. And we do think and what we've seen is that easy global trade is now over. It's behind us. Like standardize, streamline set of rules published globally and applicable globally is something that will not exist anymore. We still have some general things, but still -- we have general schemes. But using [indiscernible] provider of rules is some -- it's kind of an illusion because it's something that's less and less applicable. We have -- we see that global trade policies are becoming more and more nationalized, and we see new trade buyers emerged that are not linked to duty, but more linked to regulatory requirements. The best way to deal with that is not to try to anticipate them, but spot them and work on the biggest risks. And first thing for trade compliance manager is to have the risk-based approach to identify what are the risks, how to manage that. And when we say risk, we're talking about major risks, the ones that can kill you or kill your company. This is why sanction is so important. And once you've identified your risk, all the efforts should be focused on them. It's a matter of managing that, knowing the regulation, knowing the practices, knowing the regulators and knowing how they act enough to be able to know what's your risk, what's the biggest one and how to manage them and especially in times of crisis, know how to react to them. And also going back to this new rule of trade compliance manager as do you communicate those risks internally? This should be -- that risk should be the basis of your discussion with the management -- with the top management. In this uncertain environment, you cannot manage anything. So my advice -- our advice on that is to focus on what's major. I can put the company in this. Otherwise, you'll also be overwhelmed. Therefore, put management, energy and resources on those priority risks and go back -- and I cannot say that enough, go back to the basics because everything stems from there. And those are fundamental and thus we're changing in certain environment that I was now. I don't know Nicolas, if you have something to add to that?

Just one last remark. And that's actually what mentioned -- what's mentioned as well on the slide, look for the right suppliers. And here, this is not self-promotion, just to be clear. What we clearly advice is make 2024 the year where you're going to choose the suppliers that will help you to go through those -- this uncertain global trade environment, right? That's actually the message also that we want to share today. Again, it's not only about Dojo, we're also referring to brokers, as we just said in the first -- in the previous trend. IT software, database provider, I'm thinking, of course, about Descartes, of course, your advisers. I mean maybe you've been working with the same suppliers over the last years, maybe decades, ask yourself the question, if you are fully happy with the service or if you like, "Oh, that's okay, it's not perfect, but I can live with it." We can tell you, you cannot live with it looking at what's coming this year, what was already there last year and what's coming in the coming years, right? Again, we don't have any crystal ball, but -- and the idea is not again to tell you what's coming -- what's going to happen in the future. But what we see is that the strongest trade compliance organization is not just because they do have the right people in-house, that's one element. But the second element is that they are supported by the right suppliers at any level, right? So that's the message today. 2024 would be the -- could be the good year for you to challenge your historical suppliers. Just a small remark from my side, and we can -- if there is no question, we can move to the next slide.

And I think this trend is something everyone has in mind. This part of the presentation is more EU or India or Europe-centric. But still, this is something that everyone has in mind, is the fact that trade rules are becoming more and more green rules. We're moving from an environment where duty was the main barrier to something more tangent, difficult to apprehend and also which is pretty interesting, something across teams and cross-functions. So that's the most interesting part of that. What needs to be reminded is that this will continue. In 2021, the EU Commission released a new open sustainable set of trade policy. And this new EU trade transfer policy promised a number of autonomous policy measures to foster sustainability to make sure that EU supply chain is more and more sustainable and in line with environmental goals. So this policy and this rules and this new regulations are still now starting to be implemented. There is obviously CBAM for which we started to file the first report. So hanging their people. I know it's difficult. We do have lots of perks, but we've successfully filed some of them, so we're fine. But there is the CBAM and this is something that will need to be done. That's a new reporting and then we'll have new duties linked to that. Then you have the EUDR coming up and then we will have the ban on forced labor and also corporate sustainability due diligence directive. And those are many -- one of those new issues that are actually linked to trade compliance. And many of people we talked to you, say, do they -- are they linked to trade compliance? It is for you to decide. The things that those new rules are actually using some of the trade compliance basics. So this is something that needs to -- now it's always been taken care of by trade compliance teams. But I think -- and this is also an opportunity for trade compliance people to talk to some of the people, so for example, to the sustainability colleagues. What we see is not to -- as we said, not to try to take on everything. But if you have sustainability, please go and educate them on what custom classification is all about, how does it work, what's the reason for its execution, what's an export and so on and forth. So for that and those new rules, I think every company's world and everyone has the right to decide and every team has the right to decide wherever they want to take on those challenges or if they want to pass them on to be sustainability colleagues. But those are trade compliance-based rules, which means that a little bit of education is needed for everyone. And it's also a great opportunity for trade compliance people to talk to the team and to make sure that fair matter or their work is understood by everyone. Nicolas?

Yes, 2 remarks from my side. First, a quick -- because we may have non-EU audience, so regarding CBAM, in short, that's a new obligation to -- a new reporting obligation at least for the coming 2 years on some carbon-intensive products to be imported in Europe, like steel, electricity. There are a couple of products. And actually, it started now because the first report has to be submitted for the 31st. And just to say what CBAM is and CBAM extends for Carbon Border Adjustment Mechanism. And in 2 years, duties will be applied on those products, just for the sake of people not being EU based. And my second remark was around EU Deforestation Regulation. Actually, if you only have one regulation to read, that's this one, the EU Deforestation Regulation, we call it EUDR because it somewhat -- some kind of game changer for trade compliance management in Europe because for the first time, the EU Commission comes with the concept of due diligence that has been so far presented in a limited way in the EU legislation. But now the time is over, especially with those new green trade policies, they explicitly required companies to follow a due diligence based approach with 3 clear steps: data collection, risk assessment and risk mitigation. And many experts, and we had also some insight from the EU commission that this EU Deforestation Regulation due diligence approach is now presented as a future reference for trade compliance management framework in Europe, especially for other regulations coming in the coming years. So if you have 10 minutes, because the regulation is very short, for once, I encourage you to read this EUDR regulation. That's for the last trend, I don't know if we're going to pick up questions now or we're going to move to the next slide.

I think we'll save this one -- the questions that we have for the end.

So here, it's more -- we said we wouldn't do any self-promotion. As it just to present what we do, we'd like to present -- just in a few minutes on real case studies we've seen from our project in 2023, present them in a few words. Also the mission of our team is to provide a company with resources they struggle to find. So we try to give them flexibility by outsourcing or taking on certain activities. And to help them focus their energy on less repetitive and more strategic task when it comes to trade compliance management. And by that -- and overall, and the main focus is to help them to ensure that their activities are compliance -- their operations are compliance because obviously, if we're able to manage a strategic lead, the whole thing and someone is taking care of the repetitive tasks then you not all covered, but better covered. So we propose here 5 case studies, including information on why our clients are interested and how we help them. And I don't know Nicolas, if you want to start with the first one?

Yes. And we're going to be faster guys on this one. Again, it's not about self-promotion. Well, at the end of the day, it's a bit, but it's also to show you examples of how you could think about externalization and working closely with a partner that could support you in your day-to-day trade compliance activities. Like Thibaut just said, it's an example from real case studies. Of course, we don't share the name of the companies. Just to show you what is feasible. I will start with the first one, the commending brokerage activities case. This one is actually -- to give you a bit of background, it's a customer who came to us -- she came to us with hiring freeze, actually, so impossible to hire a new trade compliance expert. And they have multiple brokers all around the region, no time to do a brokerage rationalization project. And basically, they wanted to get a centralized -- first, a centralized data repository with all their customs declaration, performing post-entry checks, having someone daily managing the brokerage instructions -- I mean, standard trade-offs management activities. And this is where indeed we supported by providing 1 resource, by providing also the centralization of the data and also, of course, the post-entry check activities. So that's just again to tell you that those kind of activities, which are time consuming, repetitive, a bit connected to compliance because here, for example, you do post-entry checks just to make sure that your broker is doing correctly the declarations. But the question you have to ask yourself, do I need to get in-house resources to do that where those resources I could use it for something potentially, less repetitive and "more" compliance-oriented, right? And like I think we shared many times during the presentation the topic where with biggest risk in terms of compliance. So that's the kind of support we gave on the brokerage activities. I think the 2 others, classification detox -- on-demand classification. Maybe Thibaut, you'd like to take those 1 because you are the 1 who supported classification.

Yes, on those -- I think those are like and will not present them at length. But these are 2 different companies. The first one came to us with -- in the scope of massive ERP implementation. We won't name any of the solutions out there, but we all know them. And they needed to clean their database. In this case, what we've done is we created a master data with all the classification and also provide a little bit of rationale that say -- or some of the solutions out there allow you to put the rationale for your classification, which means that you're able to -- in case [indiscernible] tiny little certification for your classification, which is something that's always helpful, but also to track down what has been filed and how you classify your goods and also which rules. And then for the main -- the most important item, what we usually do is we ask for BTIs of classification rulings just to make sure that we're on the right track. And then last but not least, and I think this is one of the most important thing we also provided training to their people to them -- make them more autonomous when it came to classify their goods because this was also the person of the project to provide closure and make sure that with this new cleansed database, they could move forward with the trade operations. And then we have the other part of the project that's on-demand classification. It's more whenever required. And once we know people very well, once we know companies very well and we know the product very well, we are able, and that's something we see for quite some of our clients -- quite a number of clients as we perform on-demand customer classification based on what has been classified before, always providing rational, always providing -- always have been going to upload the classification within the database depending on how they want to. And within different KPIs, that can go down up to 48 hours to get a feedback, not always to get an answer because we all know that classification is based on more vendors, sometimes inscription. But once you have the right data and you know your product, this is something that's completely feasible. Nicolas, if you want to take over the last two ones.

Yes, sure. Special regime management project. This one, I won't go into the details of this case study. But just to share with you guys that we've been involved in many duty management project and support -- ongoing support. In short, those are projects where companies have deployed the cost savings strategy, I would say, could be via the implementation of IPR, and that's the case here, implementation of IPR among different countries. But they don't have necessarily the resources to manage the authorization. And that's valid for IPR or bonded warehouse, but we also had project simply by also managing the preferential origin strategy of the companies collecting proof of origin, for example, determining and corrects the correct origin of the product. But here, what we want to share with you is that you may not need have to have in-house someone that will handle those, again, repetitive task because for those of you who have already managed, for example, an IPR, it's already -- it's often, sorry, very, very time consuming. And it's always better potentially to outsource them to move to a more audit-based supervision approach for those kind of activities. And of course, the benefits are huge in terms of compliance because you make sure basically you have someone that have the expertise to follow up and to manage your authorization. Last remark regarding the special region management. It's also important to keep in mind that you have to find the right partner. And again, it's not self-promotion here, it's just sometimes companies are reluctant to find the right partner for managing those kind of activities. You can find -- it's easy basically to submit an authorization to get this authorization, the challenge is how to manage it, right? So don't hesitate to propose a success fee, for example, management. It's always something that works. To be honest with you, we've been doing that just once so far, but it can be an option. If you want to make sure the partner is fully involved in managing your activities. And also, don't forget -- again, if you implement cost savings strategy, don't forget to think about your management fees, the fees or management costs, the cost to manage your trade compliance activities. This is something that many companies forget. They ask for an IPR. They obtain an IPR, for example, or they execute a preferential origin strategy where they're going to claim preferential origin on importation of products to save duties, but they forget that they need to put also resources to manage on the long run those strategies. In practice, we used to advise companies to allocate at least between 1% and 5% of the total annual savings to the management of those authorizations. The last case study is the -- already in documentation here, very, very, I would say, operational-oriented like companies exporting products where they do need certificate of origin, legalized document. I'm sure it will resonate to many of you having been involved, especially in operations in the Middle East and African countries where most of the time, you need a certificate of origin to import the product. So basically, we support with additional resources here also to streamline the processes and to make sure the documentation can be generated at the right time. That's it for the case study. I think we good -- except if Thibaut, you have something to add, but I think we're good on the case study.

No, I'm good from side. Nothing to add. Konrad, the floor is all yours.

Yes. Perfect. Thank you very much. Good. You should see my screen in a second. Thanks, Nicolas and Thibaut, really good insight there. I know you put a lot of good work into it. I hope everyone else appreciate it as much. So I'm -- for everyone else, I'm Konrad Preuninger. I'm from Descartes, and I'm going to be touching on, let's call it, a 6 Trend. I think it's quite complementary to what Dojo presented today because the topic will be focused on sanctions. And while sanctions is not in any way a trend as it's been around for many, many decades, I'm going to be more focused on the, what's called, sanction ownership or what you may know as the OFAC's 50 Percent Rule. So if you don't know what it is already, the sanction ownership looks at the company that you're performing due diligence on or connecting your sanction screening on is owned by another entity or even an individual and that entity is a sanctioned company that deems the company of question also a sanctioned party and you, therefore, cannot do business with. So just to give another example on that, if you're screening customer A and customer A does not sit on U.S. and EU, UN, U.K., Switzerland, Polish sanctions list, wonderful news, we can continue to transact with that business partner. But if you do go and look at the ownership structure or the UBO, ultimate beneficiary owner, and find that there is a sanction entity within that very diverse ownership structure that spends around the world, that also deems customer A to be a sanction entity, and therefore, you cannot do business with. So ultimately, what OFAC is asking companies to do today or even the EU is to take it one step further, not just do your basic, what I call, level 1 sanction screening, if this company is on the sanctions list but look at the ownership structure, and are there any sanction entities because especially -- and this is why I'm bringing up today is, it's a trend that started maybe 1.5 years ago. It's become a bit more popular. And what we've seen at Descartes is for our own customers and additionally, a lot of new inquiries on a monthly basis, that this will become the norm, whether it's this year or early next year is to perform this extra step, what I call level 2 due diligence and understanding if there is a sanction entity within that customers or suppliers network. And that's really what you're expected to do. Now the problem with that is whether you're doing today, it's a very deep manual process of requesting the ownership structure for that business partner or doing it on your own and manually screening each of those, or you're outsourcing to a law firm and waiting a few weeks and paying too much money on understanding whether or not those -- there is a sanction entity. Sanction parties are very good at hiding themselves. They're getting more and more creative because they have to protect their millions or billions of dollars in revenue stream. So it's not just difficult to find it, but the other problem is it's just a one-off screening. You're only knowing at that moment can I do business with customer A. Things change, how do you know in a year or even less or more that remains the same, and you can continue doing it. So what I'm going to share with you today as you see on the screen is a very nice way to do it, probably more economical, saves lots of time and lots of money, what's called visual compliance. So this is a platform from Descartes, which you can conduct your, what I call, level 1 sanctions screening or your level 2 screening and conduct that sanction ownership. So I'm just going to give 2 examples, and then we're going to close off and go to questions, about 7 more minutes. So if there are any questions regarding, yes, visual compliance or back to Dojo, please enter it into the chat now. We'll get to them at the end of this section. So to give you an example, I'm going to type Arena Events company, which is based in Finland, but we leave our search parameters as is, but for the sanction list, I'm going to check against. I'm going to turn off our optional list, which is our sanction ownership data set. When we conduct that screening, you can see on the following page, 0 records return. This is wonderful news. That means I can go back to the business, yes, green flag, move forward to conduct business with this party. However, if I go back and add that sanction ownership data set and conduct that level 2 screening, we can now see on the following page that we had 5 records return, which means 5 potential matches. Now if you do lots of screening, you're always going to -- such thing as a hit rate and you're probably going to get some false positives. So whether or not these are all false positives, we won't get into as of now, but I know that the top hit I have on this list for Arena Events is the one of question. So if I open up this particular hit to read more about it, and this is a very simplified example. That's why I chose it just because it's easy to get through to understand is -- Arena Events in Finland is what I screened. We have additional address details, which I didn't stream, so I can go and verify that information. But why do we have a hit? And why we have a hit is because these 2 Russian oligarch, Gennady and Roman are both sanctioned by the U.S. SDN list and the U.K. Sanctions list. And because collectively, they own 50% or more of the Arena Events, company of question, it also deems Arena Events a sanction entity. Now you can see before, when we did our basic level 1 screening, we didn't get a hit and we would have conducted business with the company, but that would have been a violation, right, because we didn't look at the ownership structure and conducted screening on that. And now you see the value here is -- I'm not having to conduct this very deep manual research or outsource it to a law firm. I'm screening my customer once. If there's any sanctioned entity individual or reason I cannot do business with the company, it will flag it and detail out why that is. And that's what you can see here today. Now to finish off on this section and hand it over back to Asif for questions, is imagine we didn't get 5 records return, but we get 0 records return, and this was not a sanction entity. Wonderful news, but that doesn't mean it doesn't change in the future. And that's what I mentioned before. When you're doing it today, you're only figuring out are they sanctioned today or not. But what visual compliance will do for you is that it will continuously monitor these entities that you screen. So since I -- as you can see here, I've entered Arena Events in Finland with a date timestamp, not only do I have an audit log to reference that in the future, but visual compliance will now restream this company every day. So if the ownership structure changes, whether it's 1 week, 3 -- or 3 years from now, it will pick it up. So no news is good news, but in the case that Arena Events does enter a sanctions list in the future or any other entity that's screened, it will identify it and it will notify myself or you if you have visual compliance to inform me, "Hey, possible match here, please review, identify, if there's a match and then make a decision. So this is really the power here is quickly identifying, while conducting your due diligence as well as having this continuous monitoring that does the work for you, this very manual time-consuming task, which then gives you more time in your day to focus on some of the things that Nicolas and Thibaut mentioned today. So thank you very much for listening in briefly to my section and also, again, with Dojo and now I will hand it over to Asif for questions. And again, if anything comes up after, please reach out to us, and we're happy to have a one-on-one with you.