Businesses and organizations structure programs and frameworks around lots of activities and initiatives—new products and services, expansion and acquisitions, capital projects and much more. But those that export items, or anticipate doing so, should absolutely develop a thorough compliance program.
Any business that seeks to export items abroad must comply with stringent U.S. export control regulations. Doing so is challenging, by any standard. U.S. export controls are voluminous, complex and sometimes seem counterintuitive. Too often, businesses and organizations view U.S. export regulations like they would a recipe—in other words, take certain steps in defined ways and compliance will be achieved. Yet, U.S. export control rules don’t really explain how compliance is achieved—it goes deeper than adherence to a set of formulas. As a result, it’s on the exporting entity to figure it all out. Export controls are stringently enforced and they must be followed; there’s just too much at stake to leave anything to chance.
In this respect an export compliance program accomplishes five key things:
- It helps ensure that the universe of real and potential risks within and around a business or organization are identified, qualified and quantified.
- It sets forth established guidelines and processes for compliance—specifically, determining whether a license is needed for certain items, under which conditions and under which jurisdiction.
- It helps ensure that ALL necessary steps are followed in pursuit of compliance with U.S. export controls…because any slip-up, or any omission, no matter how minor or unintentional, carries consequences.
- It drives increased organizational credibility and reliability. This translates into increased value add for your company, your partners and customers.
- It contributes to increased national and global security, which is in everyone’s interest.
How to Approach Export Compliance Program Development
Oftentimes, a lack of practical instruction on how to build a solid export compliance program leads to compliance lapses. Thankfully, there are resources available to help. Whether you’re just starting out on your export compliance journey and looking to build an export compliance program from the ground up, or you have a program in place and seek potential improvements, you’re best served to leverage an established model. At the Export Compliance Training Institute, one such model we often recommend is the Nunn-Wolfowitz Model. In 1999, the Nunn-Wolfowitz Task Force was established to devise a series of best practices around compliance program development. These include:
- Management commitment, including allocation of sufficient resources
- Training and education
- A solid license application process
- Thorough and accurate recordkeeping
- Export compliance instruction manuals
- Processes for handling suspected violations
- Strategies for handling foreign national issues
- Implementation of an export compliance intranet site
The Nunn-Wolfowitz Model is the industry’s most recognized document for export control programs, and it offers lots of practical steps, along with specialized insights based on time-tested processes. For more information on this, we encourage you to view our webinar, “Bringing Export Compliance into the New Century: A Roadmap for a Modern Export Compliance Program.”
This webinar highlights all the facets of an effective export compliance program and offers steps to travel the path successfully, including:
- Establishing a thorough yet practical framework. The webinar lays out five steps: (1) Assess your risks; (2) Assess your current controls; (3) Systematically build and run your program; (4) Monitor, oversee and communicate; and (5) Improve and fine-tune.
- Key elements and critical tools
- Customization options
- Self-assessment guidelines, including strategies for tailoring your program to your enterprise’s specific risks
- Implementation sequencing
- Strategies for building your program with limited resources using relevant data and tools
- And more
Whatever approach to compliance program building you take, it’s essential to keep it incremental, iterative (i.e., one step at a time) and pragmatic. The program should be pliable and adaptable to changing conditions over time; this is not some document intended to gather dust. It must be actively used in any and all compliance activities to help ensure business success. And finally, someone in your business or organization should be charged with overseeing it, championing it and overseeing implementation and improvements. Sometimes that’s an individual; other times, a committee serves the function. This helps ensure that compliance can be 100% handled internally, which saves considerable expense in terms of outside counsel and consulting.
One final note: All the major compliance agencies – the State Department, Commerce Department and Treasury Department – maintain their own guidelines for compliance programs, so we encourage you to utilize these as valued resources—and of course, leverage ECTI’s industry-leading e-seminars, live seminars, live webinars and 80-plus on-demand webinars for insight and guidance on developing and refining your program.
We hope this article helps you understand the many benefits of a sound export compliance program for your business or organization. As we said earlier, export compliance is a complex and detailed undertaking. Your company’s investments rely on achieving 100% compliance with all applicable export regulations and controls. That said, it is absolutely achievable—you can do it, provided you take the necessary time up front to align with an established and widely acclaimed export compliance training partner who can guide you step by step toward compliance success.
Do you have questions about export compliance challenges for your business or organization? Visit www.learnexportcompliance.com to learn about our company, our faculty, our staff and our esteemed Export Compliance Professional (ECoP®) certification program. To find upcoming e-seminars, live seminars and live webinars and browse our catalog of 80-plus on-demand webinars, visit our ECTI Academy. You can also call the Export Compliance Training Institute at 540-433-3977 for more information.
Scott Gearity is President of ECTI, Inc.