What Every Multinational Should Know About … Conducting a Sell-Side Contracts Review for Compliance Risk

For multinational companies, sell-side contracts — customer, distributor, reseller, licensing, and service agreements — often define the company’s front-line regulatory exposure. These agreements govern how products are sold, priced, shipped, supported, and represented in the market, and they frequently determine who bears responsibility for regulatory compliance, trade costs, and downstream conduct. Yet sell-side contracts are often negotiated primarily around revenue, margins, and speed to close, with compliance considerations addressed inconsistently or late in the process.

As detailed in Parts I and II of this risk-assessment self-check series, we are publishing a series of self-check assessment guides covering the key regulatory and contractual risk areas for multinational companies. This article provides Part III, which is a self-check assessment for conducting a sell-side contracts review. Part II covered the topic of conducting a buy-side contracts review; Part I provided a self-check for general compliance.

Regulators increasingly look to customer-facing arrangements to assess whether compliance expectations are embedded in commercial reality. Sell-side contracts shape pricing behavior, market access, use of intermediaries, data flows, export and sanctions exposure, tariff pass-through, and post-sale obligations. Weak or inconsistent sell-side contracting practices can undermine broader compliance programs, particularly where distributors or customers act on the company’s behalf in higher-risk markets.

This self-check is designed to help companies assess whether they have a structured, risk-based approach to managing sell-side contracts, rather than a fragmented or purely sales-driven one. It focuses on governance, risk assessment, contracting standards, trade-cost allocation, and lifecycle management — not on specific regulatory regimes or boilerplate clauses. A “no” answer does not automatically indicate a legal violation, but it may signal a systemic gap that warrants attention based on the company’s markets, customers, and distribution model.

I.          Governance & Ownership

• Is there clear ownership for sell-side contracting standards across legal, compliance, sales, and finance functions?
• Are roles and responsibilities defined for: (1) contract drafting and negotiation; (2) compliance review and approval; (3) pricing and discount authority; and (4) ongoing contract oversight?
• Are escalation paths clearly defined when sales teams seek deviations from standard compliance or risk-allocation terms?

II.         Risk Assessment & Contract Scoping

• Does the company apply a risk-based framework to determine which sell-side contracts require enhanced review?
• Does the risk assessment consider: (1) customer type and location; (2) sales channels (direct, distributor, reseller, online); (3) use of intermediaries or agents; (4) government or state-owned customers; and (5) cross-border delivery of goods, services, or data?
• Are contracting requirements scaled to risk, rather than applied uniformly or inconsistently?

III.        Contract Standards & Consistency

• Does the company maintain baseline sell-side contract standards or templates aligned with its business models?
• Are compliance-related provisions: (1) consistent across regions and customer types; (2) commercially workable and understood by sales teams; and (3) updated periodically to reflect evolving risks and enforcement trends?
• Is there a documented process for approving deviations from standard sell-side terms?
• Are relevant sales personnel trained in best practices for compliance and contracting?

IV.        Integration with Compliance Programs

• Do sell-side contracts reinforce the company’s broader compliance framework, including: (1) codes of conduct or ethical standards; (2) restrictions on improper conduct by distributors or resellers; and (3) audit, cooperation, and termination rights?
• Are customers or intermediaries contractually required to comply with applicable laws relevant to the transaction?
• Are expectations clearly communicated to counterparties, not just embedded in legal language?

V.         Pricing, Discounts & Fair Dealing Controls

• Are pricing, discounts, rebates, and incentives subject to defined approval and documentation processes?
• Do contracts align with internal pricing authority and discount controls?
• Are sales practices monitored to ensure consistency with contractual terms and compliance expectations?

VI.        Tariff & Trade Risk Allocation

• Do sell-side contracts clearly address responsibility for customs duties, tariffs, taxes, and import-related charges and how to handle potential refunds?
• Are Incoterms® expressly specified, current, and consistent with the company’s logistics and delivery practices?
• Do contracts clearly allocate responsibility for: (1) importer of record status; (2) customs clearance; and (3) payment of duties and tariffs?
• Do contracts address unexpected or newly imposed tariffs, including: (1) changes in tariff rates or classifications; (2) new trade remedies or retaliatory tariffs; and (3) shifts in country-of-origin treatment or enforcement posture?
• Is there a defined mechanism for price adjustments, renegotiation, or termination in response to significant trade-cost changes?
• Are limitations placed on retroactive or unilateral tariff pass-throughs?
• Are customers required to cooperate in documenting and resolving tariff disputes where trade costs are contested?

VII.       Contract Lifecycle & Change Management

• Is there a process to ensure sell-side contracts are reviewed and updated when business or regulatory risks change?
• Are contracts revisited following: (1) entry into new markets; (2) changes in sales channels or distribution models; and (3) significant regulatory or tariff developments?
• Are any legacy obligations from expired contracts identified and addressed?

VIII.      Monitoring, Enforcement & Remediation

• Are there mechanisms to monitor compliance with sell-side contractual obligations?
• Is there a defined process for addressing: (1) customer or distributor non-compliance (2) repeated breaches or circumvention of controls; (3) misalignment between contract terms and actual practices?
• Are contractual remedies — such as remediation, suspension, or termination — used in practice when warranted?

If you would like to help analyzing the results of your compliance self-check, please reach out to the authors or your Foley relationship attorney.

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Our white paper on Managing Import and Tariff Risks During a Trade War outlines a 12-step plan to provide practical steps to help importers navigate the tariff and international trade risks in the current tariff and trade environment, while the companion white paper on Managing Supply Chain Integrity Risks provides practical advice to deal with heightened supply chain risks pertaining to goods imported into the United States, including the increasing use of detentions by Customs.