Avalara’s Craig Reed on World Cup Cross-Border Compliance

The World Cup has kicked off, and as fans unite to cheer on their teams and heavily contribute to the local economy, businesses prepare for what promises to be a busy period of commerce. 

After founding TradeStream Technologies, acquired by Avalara, Craig Reed has amassed a wealth of knowledge that businesses are finding themselves increasingly needing. 

Cross-border commerce doesn’t need to be a hurdle in global trade. Yet, hidden fees and import costs are posing as a threat to companies looking to scale. 

In this exclusive Q&A with Finance Chief, Craig Reed, General Manager of Cross-Border at Avalara, explains how business can remain confident in the face of fragmented import compliance rules. 

As the World Cup drives global commerce, what is one piece of advice you would give to UK businesses? 

My biggest piece of advice is to treat import and export compliance as part of your company’s wider growth strategy, rather than as a back-office task for finance teams. UK businesses that do this will be positioned to capitalise on moments like the World Cup.

The tournament is creating a surge in consumer demand, from merchandise and food to broader trade opportunities. As retailers move quickly with pop-ups and ecommerce sales around these types of events, it’s important to remember that even short-term activity in other markets, like the US in this instance, can create significant compliance obligations and cross-border complexities.

I would encourage businesses to map out where they will be selling, storing inventory and fulfilling orders beforehand. That way, they can better understand what import costs and obligations they will face. Addressing compliance early also means they can focus on growth, rather than dealing with costly compliance headaches further down the line.

What challenges are posed by fragmented import compliance rules?

The biggest challenge for cross-border sellers is that there is no single system to follow. In the US, sales tax is managed at state and local levels, which means businesses are dealing with thousands of different jurisdictions, each with their own rates and rules.

For UK retailers used to a centralised VAT system, that can come as a major shock. What seems like a simple global sales expansion into a new market can become operationally complex. This is especially the case if they are selling across multiple states.

It also creates a real data challenge. Businesses often rely on disparate systems to track transactions, determine liability and file returns. Manually managing obligations across thousands of jurisdictions simply isn't scalable. Without the right technology in place to automate and integrate these processes, businesses risk costly errors and will struggle to stay compliant as they grow.

Are CFOs evolving to use AI in cross-border compliance? 

Yes, CFOs are recognising that manual processes cannot keep up with the pace of cross-border commerce. As such, AI is becoming a significant area of investment. Finance leaders are looking to technology to shift their role beyond compliance, creating room for their teams to unlock broader growth opportunities for the business. 

Avalara's own CFO Pulse Survey found that 68% of CFOs believe they are moving beyond compliance to become growth leaders. 

We are also seeing a shift towards using automation and AI to manage compliance reporting and filing in real time. That is where AI can have an immediate operational impact, reducing manual effort and improving accuracy across the board.

Is import compliance complexity a barrier to international expansion? 

It can be, particularly for smaller businesses that don’t have dedicated compliance teams. Many retailers underestimate how quickly complexity builds once they start selling internationally. Every new market brings its own rules, rates and filing requirements, and that compounds fast.

It’s very overwhelming, especially in markets like the US which has complicated state sales tax rules.  What’s more, Avalara research found that 82% of UK businesses say cross-border trade is more complex than it was a year ago.

In some cases, businesses delay expansion or limit their footprint because they are not confident that they can stay compliant in new markets. During major events like the World Cup, this represents a significant missed opportunity. Cross-border compliance systems and processes should allow for seamless, scalable growth rather than hold it back. 

What long-term obligations are presented by even a short amount of activity by business owners?

This is one of the most underestimated risks in cross-border commerce. Running a pop-up shop,or selling through an online marketplace can create sales tax nexus in the US. Once a nexus threshold is crossed, the business may be required to keep reporting and paying state sales tax in that on a continuing basis, even if the original activity was only temporary.

That can come as a surprise to businesses that treated short-term expansion as low risk, particularly during major events like the World Cup. It’s why it’s so important to understand that local tax and import compliance obligations do not always end when a big event does.

What could more business owners do to better learn about cross-border compliance requirements? 

The most important step is to plan ahead and ask the right questions early. Too often, import compliance is only considered once a business is already operating in a new market.

UK businesses should take the time to understand where they might create new compliance obligations (such as state sales tax nexus in the US), regardless of whether that is through selling goods or partnering with online marketplaces. 

Consulting with compliance experts and using automated tools will make a significant difference. Getting that clarity early is what separates businesses that act responsibly on opportunities like the World Cup from those that watch from the sidelines.