The International Trade Blog Export Compliance
Make Shipping Solutions a Part of Your Export Compliance Program
On: April 5, 2017 | By: Lisa Nemer | 4 min. read
What’s the first thing an export enforcement officer will ask if you are being investigated for an export violation? According to Bryce Bewley of the Bureau of Industry and Security (BIS), the export enforcement officer will ask to see your Export Compliance Program (ECP).
When I attended the BIS Update Conference I sat in on a round-table discussion with Bryce whose job in the Office of Exporter Services’ Export Compliance Division is to encourage companies that export to develop an ECP. While an ECP is not required by law, it will help protect your company from costly export violations and can mitigate penalties.
BIS has a guide called Export Compliance Guidelines: The Elements of an Effective Export Compliance Program. If your company doesn't have an ECP or hasn't updated it in awhile, I'd really recommend doing so with the help of this new guide.
Shipping Solutions Professional export documentation and compliance software can be an important part of your ECP. Here are the elements of an effective compliance program and how Shipping Solutions can help.
Top management must take export compliance seriously in order for the rest of the company to fall into line. To bolster your case with your management team, show them the scary Don’t Let this Happen to You! booklet published by BIS that details actual investigations of export violations and the penalties companies pay. Once you've gotten management buy in, use the sample Management Commitment Statement in the new BIS guide to communicate that commitment to employees.
Know your company and how the Export Administration Regulations (EAR) affect your business. Do your goods require an export license? If so, is that license issued by the Department of State or the Department of Commerce? What are your Schedule B codes? Are you reviewing them annually? The new BIS guide identifies common risks and how to mitigate them.
Document Your Export Compliance Program
Form a task force of employees from all parts of the company who can capture all the steps in the export process from sales to shipping. You can’t control your export process if you don’t know who is doing what.
Use the Shipping Solutions Professional Shipment Log to enter the steps of your ECP, and then use the Shipment Log with each shipment to show you are following your ECP.
To setup the Shipment Log, go to Databases and then click Shipment Log Items. Some sample tasks are already there, but you can add or change them to match your ECP. Then when you create a shipment, the tasks will be listed on the EZ Start-Shipment Log screen. Train employees to enter the Date Completed and Initials column during each step of the process, and don’t allow a shipment out the door until all steps are complete.
Make sure your staff understands why the steps in the ECP are important. Train often so that compliance tasks don’t get lost with staff transitions. Have your CEO or other top leader sit in on ECP training to show they take it seriously. The BIS guide outlines a two-tier training program, one for all employees and one for your export compliance team. It also lists resources for training materials.
Pre- to Post-Sale Security and Screening
Run restricted party screenings of customers during initial discussions and right before shipping. Rules and lists can change. If the shipment requires a license, make sure you apply early and are aware of any license conditions.
The Shipping Solutions Professional Export Compliance Module allows you to run restricted party screenings so you aren’t shipping to someone on one of the government’s restricted parties lists. The Export Compliance Module also helps you determine if your products require an export license based on the country you are shipping to.
Decide on the method and requirements for storing documents. In general, you must be able to recreate a sale up to five years later. For licensed goods, keep documents five years past the expiration of the license. Guidelines for record-keeping are included in Part 762 of the EAR, and the new BIS guide summarizes them for you.
By creating your shipments in Shipping Solutions, you always have accurate records of the export paperwork you used for each shipment. For added security, use the locking feature in Shipping Solutions to lock your shipments once they are complete so that they can’t be changed.
The Shipping Solutions Export Compliance Module audit trail stores all the screenings you have run, so you can pull up any screenings you ran for a particular shipment at any time. The date the screening was run is shown as well as the parties screened and the results.
Audit export compliance procedures and documentation on an annual basis. Try to have someone other than your company’s export compliance officer do the audit. The BIS Guide includes checklists that can be used to audit your ECP.
Understand the Process for Violations
Include guidelines in the ECP for what to do if you think you’ve violated an export law. Steps for voluntary self disclosure are defined in the EAR Part 764. Once export enforcement is at your door, the chance for voluntary disclosure is over.
The BIS guide states the case for acting early. It says even if you need to do a full investigation, it is best to make an initial voluntary self-disclosure and then submit a complete disclosure once you've done the internal investigation. Voluntary disclosures must be made with the full knowledge and authorization of senior company management.
The staff of the Export Management and Compliance Division won’t write your EMCP for you, but they will review it and offer suggestions. And for any questions about the Shipping Solutions export software, give us a call at 651-905-1727
This article was first published in January 2016 and has been updated to include current information, links and formatting.
About the Author: Lisa Nemer
Lisa Nemer leads the customer service and finance teams at Shipping Solutions, a software company that develops and sells export document and compliance software targeted specifically at small and mid-sized U.S. companies that export. If you have ever called Shipping Solutions with a question or problem you've probably talked to Lisa! Prior to joining Shipping Solutions, Lisa spent 14 years in finance and technology-related jobs for a Fortune 500 company in Minneapolis.