EXPORT COMPLIANCE TIPS

EXPORT COMPLIANCE TIPS

All of the supply chain management in the world won't do you any good if your shipment gets held up at customs. And all of the consultants in the world won't do you any good if your company isn't prepared to make a top-to-bottom commitment to export compliance. The Bureau of Export Administration offers excellent compliance tips on its website (www.bxa.gov/). While compliance programs must be tailored to the specific needs of companies, the BXA tips provide a framework for setting up a compliance department and establishing priorities for various compliance functions.

It's a great place to start. Especially helpful are the export management guidelines, which can help exporters build a comprehensive, in-house export management system. The guidelines provide six administrative and eight screening elements that are the cornerstone of a successful system. All of the elements are described in detail. The first of the administrative elements is probably the most important. It is management policy that calls for senior management to convey a clear commitment to following export regulations. That commitment must be communicated to all employees involved with export controls.

It sounds simple - and it is - but many companies don't take this basic first step. The BXA suggests that companies prepare and distribute a policy statement that conveys unambiguous support for compliance efforts. The statement should be included in an export management system manual and distributed to all employees involved with export-related work. According to the BXA, that includes just about everybody: sales, customer service, marketing, legal, shipping, order entry, traffic and engineering. The system also should be supported by new-employee orientation and ongoing training.

The second administrative element suggests clear identification of persons with compliance duties. Those with export control responsibilities need authority commensurate with their titles, and formal lines of communication with key personnel in other departments must be clearly established. The BXA recommends distributing the list of the individuals and their responsibilities throughout the company.

Other administrative elements include a program for record-keeping, a continuous training program, internal reviews and a system for consulting with the BXA if questions arise about specific export transactions. The BXA re-commends that the training program include topics such as the organizational structure of export-related work and departments, the role of the export management system administrator, company procedures for export management systems and export regulatory requirements. Other topics that need to be addressed are re-gulatory changes and new requirements, destination and goods restrictions, new customer review procedures and what to do if red flags are raised for an export transaction. Training schedules should include at least one brief refresher session per month and an annual review. At smaller companies, where a single person may be in charge of compliance, the BXA recommends that a backup employee be capable of assuming all export control duties if the primary person is absent.

Internal reviews are a critical component of an export management system. They are the only sure-fire tool for ensuring that the firm's export transactions are in compliance with export administration rules. A qualified individual can conduct the audit, which should include a review of all documents to ensure that they are properly maintained and are compliant. The BXA recommends that the reviewer flow-chart the order processing system, interview export-related personnel and analyze sample transactions. The reviews should be done annually, at least, and need not include procedures that have no bearing on a company's business, such as a sensitive nuclear or chemical/biological weapons screen. The last administrative element - notification - asks that exporters have a system in place for contacting the BXA if specific export transactions raise any red flags. These could include suspicions about the end use or end user of the exported goods.

Questions about specific end uses or end users can be directed to the BXA's Office of Exporter Services, at (202) 482-4811. If exporters suspect that a foreign customer is using goods in an inappropriate or illegal fashion, they can contact a local BXA Export Enforcement field office. The agency's headquarters, which can be reached at (202) 482-1208, can provide those numbers. The BXA website offers an EMS Audit Module that is especially helpful in determining if your system is covering all of the bases. From the website you can also access the BXA's list of denied persons and entities and the State Department's list of persons who have lost their export privileges under the Arms Export Control Act.

Next Week: Export management system screening .