The International Trade Blog Export Compliance
Your Company Needs an Export Compliance Program
On: September 4, 2019 | By: David Noah | 3 min. read
Most of us wouldn't take a long road trip without directions, so why would a company embark on an export journey without one?
Exporting is a complicated process. You are navigating different cultures, customs, currencies and regulations. In order to be consistently successful, you need directions that guide you past all these hurdles, both known and unexpected.
That's where an Export Compliance Program (ECP) comes in.
An Export Compliance Program (previously referred to as an Export Management and Compliance Program or EMCP) acts like a map, a compass, a life preserver and a yield sign so that you stay out of trouble and successfully complete your exports. Here’s how.
According to the Bureau of Industry and Security (BIS), “An ECP analyzes pieces of information and individual decisions and builds them into an organized, integrated system. It is a program that can be established to manage export-related decisions and transactions to ensure compliance with the [Export Administration Regulations] EAR.”
Why Your Company Needs an ECP
Most exporters never plan on doing something wrong in the eyes of the law. However, mistakes do happen, and the consequences can sometimes be devastating. Companies can face fines, lose their export privileges, and, in the most egregious cases, see people go to jail. A properly implemented ECP will help alleviate that risk.
A comprehensive ECP reduces the chance of violating export regulations.
An ECP gives you a clear plan of how to audit your company's procedures and processes yourself, so you can identify and address any potential violations before they even surface.
A well written ECP can substantially reduce penalties if your company violates export regulations, as long as you can document that you regularly follow the written ECP procedures. The BIS considers that a strong mitigating factor when determining penalties.
8 Key Elements of an ECP
According to BIS, an effective ECP includes these eight elements:
1. Management commitment.
2. Continuous risk assessment of the export program.
3. Written export authorization procedures for determining jurisdiction, classification, licensing and screening.
4. Clear record keeping responsibilities.
5. On-going training of all employees, including support staff, involved in exporting.
6. Regular audits of the compliance program to ensure it is being followed.
7. A program for handling compliance problems, including reporting export violations.
8. Scheduled reviews, maintenance and updates of the written ECP as changes warrant.
Creating Your ECP
Creating an ECP for your company does require some work, but it is absolutely worth it for the health of your company. We detail the entire process in our whitepaper, How to Create and Implement an Export Compliance Program (EMCP).
This article was first published in May 2016 and has been updated to include current information, links and formatting.
About the Author: David Noah
David Noah is the founder and president of Shipping Solutions, a software company that develops and sells export documentation and compliance software targeted at U.S. companies that export. David is a frequent speaker on export documentation and compliance issues and has published several articles on the topic.