Export Compliance Management
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Export Compliance Management December 10, 2013. Compliance Program. Compliance Programs are put in place to ensure adherence to the regulations and to prevent violations Compliance Programs may vary depending on the business model (EAR, ITAR, NAFTA, FCPA etc.)

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Export Compliance Management December 10, 2013

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Export compliance management december 10 2013

Export Compliance Management

December 10, 2013

Export Compliance Training


Export compliance management december 10 2013

Compliance Program

  • Compliance Programs are put in place to ensure adherence to the regulations and to prevent violations

  • Compliance Programs may vary depending on the business model (EAR, ITAR, NAFTA, FCPA etc.)

  • The Department of Commerce, Bureau of Industry and Security Compliance Guidelines Provide 9 Key Elements to Developing an Effective Export Management and Compliance Program and Manual.


Export compliance management december 10 2013

EMCP

  • 9 Core Elements of an Effective EMCP (Export Management Compliance Program)

    • Management Commitment:

      • Senior management must establish written export compliance standards for the organization, commit sufficient resources for the export compliance program, and ensure appropriate senior organizational official(s) are designated with the overall responsibility for the export compliance program to ensure adherence to export control laws and regulations.

    • Continuous Risk Assessment of the Export Program

    • Formal Written Export Management and Compliance Program: Effective implementation and adherence to written policies and operational procedures.

    • Ongoing Compliance Training and Awareness


Export compliance management december 10 2013

EMCP Cont.

  • Pre/Post Export Compliance Security and Screening:

    • Screening of employees, contractors, customers, products, and transactions and implementation of compliance safeguards throughout the export life cycle including product development, jurisdiction, classification, sales, license decisions, supply chain, servicing channels, and post-shipment activity.

  • Adherence to Recordkeeping Regulatory Requirements

  • Internal and External Compliance Monitoring and Periodic Audits

  • Maintaining a Program for Handling Compliance Problems, including Reporting Export Violations

  • Completing Appropriate Corrective Actions in Response to Export Violations


Export compliance management december 10 2013

Export Compliance Management

  • Compliance is an ongoing process - not one act

    • Day-to-day operations should include screening and checks to safeguard against violations

      • Denied/Restricted Party Screening, Embargo Country Screening, Product Screening, Antiboycott Screening and other relevant screens based on particular business model and compliance obligations.

  • Processes should be checked to ensure effectiveness, identify weaknesses and demonstrate due diligence

  • Every Compliance Program Should Include Auditing Process as well as a process for handling Violations


Export compliance management december 10 2013

SAMPLE EXPORT COMPLIANCE FLOW

Project Background

Shipment Ordered

Presented for Export

GENERAL PROHIBITIONS & OTHER SCREENING

Denied Parties Screening Anti-boycott Screening

Embargoed Countries Screening Red Flag Screening

Office of Foreign Assets Control Excluded Parties Lists

Manufacturer

Classification

Verification

Internal

Classification

(ECCN / ITAR)

ECCN

Product

File

LICENSE DETERMINATION

U.S. Munitions

List Category

SNAP-R/D-Trade

Classification

NLR

No License

Required

License

Required

BIS / DOS

Contact EMC

CANCEL ORDER

SNAP-R (or D-trade)

Application

Process

License Denied

License Received

PREPARATION OF EXPORT DOCUMENTS

DESTINATION CONTROL STATEMENT

Schedule B

or HTS

Determination

NAFTA

or Other FTA

Consideration

> $2500

per Schedule B

Confirmation #

AES

Reporting

FDA or OGA

Docs/Reporting

US CBP

at Port of Export

US Bureau

of Census

Export

File / Records


Export compliance management december 10 2013

Export Compliance Management

  • Transaction-Level and Process-Level Reviews

  • Compliance with the Regulations

    • Does the compliance program cover the relevant compliance obligations based on your business?

    • Are the compliance processes functional?

    • Are the compliance processes preventing violations and risks?

  • Compliance with Internal Program: Policies, Procedures, Manuals

    • Are the processes you developed being followed?

  • Vendor/Third Party Controls

    • Are Third Parties utilized for Compliance Initiatives?

    • Are they following compliance processes?

    • Are these processes updated to match current business practices?


Export compliance management december 10 2013

Export Compliance Management

  • Comprehensive - Corporate-level Audit

  • Focus on Companies Overall Export Management and Compliance Program; Process and Transactions

  • Through interviews with export-related personnel and management along with review of procedures, manuals, and transactional documents this Audit should Review:

  • Operational Practice compared to Written Procedures

  • Management Commitment

  • Training and educational programs

  • Order processing system

  • Export Controls/Screening process

  • Analysis of export authorization process

  • Handling of Licenses

  • Internal assessments

  • Notifications of noncompliance

  • Procedures for corrective actions & follow-up

  • Foreign national visitors/employees

  • Technology controls

  • Travel & Hand-carry items

  • Recordkeeping practices

  • Operational Practice to Procedures


Export compliance management december 10 2013

Conclusion

  • Having an Effective Export Compliance Program in place will minimize risk of noncompliance and will act as a mitigating factor in an enforcement proceeding

    • Review your Compliance Program and Auditing Process

    • Keep Audit Trails

    • Ensure proper resources, training and controls are in place

    • If weaknesses are discovered implement corrective actions


Export compliance management december 10 2013

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