Trade Compliance Consulting

Corporate Trade Compliance: Critical to your Success

2012-02-05T13:52:00.000-08:00

Complying with export regulations may seem like nothing more than an exercise in filling out complicated forms. However, knowing your business complies with all applicable export regulations gives your business a competitive edge. Overseas customers don't want to risk being involved with international trade violations, even indirectly. By assuring your international clients and customers of your corporate trade compliance, you help build your brand worldwide.

International Trade in a World Economy

The 21st century marketplace is global. For many sectors, healthy growth requires international trade. Countries like China and India are growing economic players on the world stage, and developing international trade helps you maintain your success even when markets at home are slower. From socks to tablet computers, international trade is a must for success today.

Ignorance is Not Bliss

Some businesses think they are unaffected by export regulations and only find out about them after unknowingly committing violations. Even if your business has little to do with technology or defense, it still may be subject to export regulations. One of the first things any business should do when going international is invest in corporate trade compliance consulting to determine which rules apply and how to comply with them.

Penalties for Non-Compliance

A corporate trade compliance consultant should be well-versed in penalties that apply when regulations are violated. The International Emergency Economic Powers Enhancement Act of 2007 enacted civil penalties of $250,000 or more and criminal penalties consisting of fines of up to $1 million plus the possibility of 20 years in prison. Furthermore, the Commerce Department publishes names of violating companies in Federal Register notices, and these are often used against non-complying companies by competitors.

Don't Be Afraid of Going International

Making your business international should be exciting and should make you feel proud. Investing in the services of a corporate trade compliance consultant early in the process will help you gain international success while avoiding trade violations. It simply isn't worth it to engage in international trade without knowing exactly which export regulations apply. Corporate trade compliance consulting should be part of your plan for a successful global enterprise.

The Role of the Customs Trade Compliance Consultant

2012-02-01T19:08:00.000-08:00

Not only is trade compliance the only legal way to operate, it has also become a competitive advantage in today's world of international trade. It isn't just defense manufacturers and huge multinational businesses that have to worry about trade compliance, but any business that operates internationally. Proper trade compliance saves money, improves efficiency, and helps insure against incidents that cause negative publicity.

Agencies Involved in Trade Compliance

A competent export trade compliance consultant knows the regulations and practices of multiple government agencies such as:

· U.S. Department of State Directorate of Defense Trade Controls
· U.S. Customs and Border Protection
· U.S. Department of Treasury Office of Foreign Assets
· U.S. Census Bureau
· U.S. Department of Commerce Bureau of Industry and Security

Ensuring ongoing compliance is a big task. Regulations change frequently, and keeping on top of the latest developments is daunting, particularly for the smaller business.

Risks for Failure to Comply

Most failures of compliance with international trade regulations are due to simple ignorance of policies. All violations can result in serious criminal and civil penalties and loss of material goods. International trade is vital to today's businesses, and entrepreneurs should not avoid the international market out of fear of regulations. Knowledge of regulations, import compliance consulting, and export trade compliance consulting can save businesses a world of trouble by preventing violations of trade regulations.

Do You Need a Customs Trade Compliance Consultant?

If you answer "no" to any of these questions, then you may benefit from import compliance consulting or the services of an export trade compliance consultant:

· Has our CEO or President issued a formal trade compliance policy statement?
· Do we have a designated trade compliance officer?
· Are employees who process international transactions updated on trade regulations every six months?
· Do we classify exports with Export Control Classification Numbers or other required numbers?
· Do we have documented import / export compliance and auditing procedures?

The risks of failing to comply with trade regulations are too big to ignore. Give your business the best prospects internationally by ensuring it abides by all necessary international trade regulations.

Import Compliance Consulting Advice from the Pros

2011-11-16T15:43:00.000-08:00

Any company that imports into the United States must comply with the Customs Modernization Act (1993). Also known as the “Mod Act,” this law forever altered the relationship between importers and exporters and the U.S. Customs and Border Protection (CBP) Agency. Before the act, importers relied upon the actions of Customs to declare value, classify and assess duties on imported merchandise. But after it, importers were made legally responsible for valuation, classification and rate of duty applied to entered merchandise.

What was the effect?

Like many new laws, the language in the Mod Act was ambiguous, perhaps deliberately so. It speaks of companies using “reasonable care” with regard to the merchandise they import. When importers do not abide by this “reasonable care” guideline, their transactions are often delayed due to incorrect, inaccurate, or missing documentation.

But dilatory tactics are not the only weapon the CBP has at its disposal. They can also assess fines and penalties at their discretion. In some cases, the imported merchandise is forfeited and sent back to the exporter. What are importers to do?

For huge, multinational corporations, the answer is easy. They simply hire a licensed customs broker of trade compliance consultant, or a team of them, and keep them on staff. But for small companies it is not that easy. Few of them can afford to hire a full-time broker trade compliance consultant.

Smaller firms can avail themselves of the services of an import trade compliance consultant, who will assess their current level of compliance and recommend the most effective and affordable practices that will ensure their compliance with the CBP. What are the benefits?

Import compliance consulting can help any firm reduce the cost of imported items, eliminate holds or delays on imported merchandise, and minimize fines and penalties associated with noncompliance on imports and exports.

James M. Anzalone is the president of a firm that provides global trade compliance solutions to businesses of all sizes. Compliance Assurance LLC focuses on import compliance consulting in the United States. With over 17 years of experience, Mr. Anzalone has personally developed a number of programs that have made attaining comprehensive compliance much easier and more affordable for his clients.

Addressing Your Company’s Supply Chain Security

2011-10-13T05:33:00.000-07:00

In an era when supply chain security is as important as the contracts your company has secured for the export of product, choosing a supply chain security consultant to make sure the transport logistics and systems are compliant with the most current regulations and guidelines. With Compliance Assurance supply chain consulting, you can be sure that your company is implementing the best system, ensuring delivery of the exports as well as all the necessary training and tools needed to exercise the best possible practices suited for the individual needs of your company and clients throughout the world.

Recent years have seen an unprecedented effort on the part of the international community to establish supply chain security standards for the export of physical goods as well as technological data. Unfortunately, we are still some ways off from having one uniform set of regulations or even one organization with which to obtain guidance. In today’s international market, the supply chain security consultant must not only be able to establish export compliance programs that address the myriad of regulations and initiatives currently in effect, but also tailor compliance practices to suit each industry and company.

The effective supply chain consulting obtained from Compliance Assurance will not only ensure that a compliance program is established to adhere to the applicable regulations, but that each department and employee is trained and confident in their understanding of the program’s implementation. As your supply chain security consultant, Compliance Assurance can provide training to every level of management as well as every employee. Our supply chain security consulting services can include the production of a supply chain security manual to support the training and to serve as a reference for managers and employees as they implement the supply chain security program.

As the international business community strives to keep pace with increasing exports and our federal government strives to increase national security, it is important to remember that the role of supply chain security consulting is not finite. Compliance Assurance is the supply chain security consultant that will continue to serve your company’s needs through independent audits, seminars and workshops to keep your employees informed and confident in the implementation of the best supply chain security practices.

Keep Your Corporate Trade Compliance Policy Strong

2011-08-10T10:10:00.000-07:00

In the last decade, the Federal laws and regulations regarding corporate import and export trade have become increasingly complex, and with a ramping up of the policing and enforcement of trade policy and restrictions, there is no room for error in this business. Under current Federal law, infringement of Federal trade compliance regulations can incur a hefty fine of between $500,000 and $1 million, and can carry a jail sentence of five to ten years per violation. Given that most companies can face over one hundred alleged violations within a single case of Federal trade compliance infringement, having a weak or risky trade compliance policy or strategy just isn’t worth the risk.

Staying Out Of Trouble

The best way to stay out of trouble is to have your corporate trade compliance policies periodically evaluated by an experienced compliance practices firm like Compliance Assurance LLC. Their assessment teams are highly skilled in executing an in-depth review of your company trade policies and strategies for dealing with Export Administration Regulations (EAR), International Traffic In Arms Regulations (ITAR), or compliance with the Office of Foreign Assets Control (OFAC). The comprehensive internal audit focuses on compliance risk analysis, written management and corporate compliance procedures, structure and control within the organization, customer transaction and screening processes, identification, handling, and tracking of regulated items, export and transfer procedures and screening, licensing, testing, and documentation procedures, record keeping, internal monitoring , control, violation report and corrective actions, as well as employee compliance awareness and training.

Once a thorough assessment of your current compliance policies and strategies is complete, their corporate trade compliance specialists will help your employees to recognize the areas of vulnerability or risk in your current compliance plan. They will assist your company in strengthening those areas of you compliance policy, develop and implement better strategies, and train your employees in recognizing and overcoming such weaknesses in the future. Their goal is not just to come in and reorganize your compliance structure, but to ensure that your employees will continue to successfully manage and troubleshoot your corporate compliance policy even after the experts have gone.

BIS Update 2011

2011-07-19T14:26:00.000-07:00

Well true to this year's BIS Update 2011 namesake - Implementing Export Control Reform - attendees were shown proof of real progress made in reforming America's outdated system of export controls. Quick to dismiss previous year's skeptics, Under Secretary of the Bureau of Industry and Security, Eric L. Hirschhorn, in his opening remarks, commended the agency for its tremendous efforts over the past 16 months and pledged that there is more to come.

Mr. Hirschhorn's remarks echoed the familiar origins of export control reforms (ECR) with the early meetings with President Obama, then National Security Advisor General James Jones, and former Defense Secretary Gates charge for changes to the existing export control system. He also pointed out the obvious flaws in a system that requires the same level of government scrutiny to the export of every nut, bolt and screw for a F-18 fighter aircraft that is applied to the entire aircraft. But this year's remarks had much more to report than just words. Under Secretary Hirschhorn reported on several recent (and well timed) changes and proposed changed to our current system of export control reforms.

The most touted of reforms, echoed by other speakers throughout the day, was last Friday's Notice of Proposed Rule that moves certain items from the U.S. Munitions List (USML) to the Commerce Control List (CCL) and creates the framework to move additional items from Department of State (defense articles) to Department of Commerce (dual-use) jurisdiction. This proposed rule fulfills several objectives of export control reforms. First, to allow our government to focus its efforts on the most critical items to destinations of concern. Secondly, this move would eliminate the Dept. of State registration requirement for many manufacturers as their lower-level components would no longer be subject to their jurisdiction. Additionally, this would eliminate the "see through rule" which makes items manufactured offshore subject to U.S. reexport control if they contain any U.S.-origin ITAR parts or components, regardless of the value or significance of those U.S.-origin items.

Under Secretary Hirschhorn also spoke about the recently implemented license exception, Strategic Trade Authorization (STA), which allows for the license free export of many dual-use commodities to 36 (mostly European) countries and an additional 8 countries for items controlled for NS-only reasons. According to Hirschhorn, the STA exception would have potentially will eliminated 3000 of the 22,000 licenses BIS issued last year. He also stressed that the STA does not "decontrol" these items but will reduce the level of control so as to facilitate trade with U.S. allies. An important aspect of STA is that it will pave the way for future license exceptions for items moving from the USML into the proposed "600" series ECCN classifications.

Mr. Hirschhorn was quick to point out that the U.S. government will continue its comprehensive sanctions against Cuba, Iran, North Korea, Syria, and Northern Sudan. Additionally, there are no plans to alter the U.S. prohibitions on exporting Munitions List items to China or dual-use items for military end use in China.

These key proposed and implemented controls were not the only highlights of Mr. Hirschhorn's speech. He also addressed continuing efforts of the BIS to increase its education and outreach by addressing the DHS Form I-129 export control certification, consolidated end-user screening list, and items to be added to the agency's export compliance tool kit including industry practices. Finally, he addressed the importance of export enforcement activities and the President's executive order to increase coordination among export control enforcement agencies and the expectation for companies to self-police and file voluntary self-disclosures when required.

This year's BIS Update is certainly not short on substantive regulatory changes. As with all things, the devil is in the details and it remains to be seen how the export community will deal with these significant changes now, or soon to be, in play. The breakout sessions that followed brought up a number of very good questions that will need to be addressed in order for these reforms to work in the real world. Stay tuned for future posts on how exporters can put these export control reforms to work at their companies.

A full transcript of Under Secretary Hirschhorn's remarks can be found on the BIS website or at the following link: http://www.bis.doc.gov/news/2011/hirschhorn_update.htm.

Protect Your Business by Hiring A Corporate Trade Compliance Specialist

2011-07-11T10:49:00.000-07:00

If your company deals regularly with international import or export trade, you know that compliance with international trade regulations is a serious business. A few decades ago, the regulatory process may have been simple enough for your assistant to keep track of your corporation’s trade compliance, but with the added complexities and strict regulatory crackdowns brought on by today’s political and economic climate, more and more companies are using professional means of tracking their trade compliance. Mega-corporations have taken to setting up their own trade compliance departments, but smaller companies may not have that option, or it may be too cost-prohibitive. Corporate trade compliance consultants like Compliance Assurance LLC can keep your company compliant without sending your books into the red.

Developing a Corporate Compliance Policy

These days, obscure and newly interpreted regulations are giving today’s international trade companies a workout, and there’s no lenience for errors. One simple slip in international trade compliance can result in exorbitant fines, penalties, and interest fees- even possible criminal charges and jail time. It’s vital for the continued success of your company and its ranking members that you have a corporate compliance policy in place, and that it is up to date and rigorously implemented. Corporate trade compliance specialists are adept at assessing a company’s needs and developing a sound corporate compliance policy, or auditing and revising policies that are already in place.

At Compliance Assurance LLC, expert consultants don’t just evaluate your current compliance strategy and develop new procedures, they will work hand in hand with your employees to ensure they have the training and knowledge they require in order to understand and implement your corporate trade compliance policy. Their specialists are skilled at managing the project so you don’t have to, and as an added bonus, they will educate your employees on identifying regulatory compliance issues, implementing solutions, and working out strategies to avoid or deal with future compliance issues. Effective, experienced compliance assistance will help your company maintain safe and legal trade practices, and stay competitive in today’s ever-hardening market.

The Importance of Export Compliance Training

2011-06-12T12:16:00.000-07:00

The United States government has some of the world’s strictest export regulations. Failure to comply with those regulations can result in fines, restrictions in your ability to export your products and even prison sentences for your company’s officers and parties responsible for ITAR compliance. To make things even worse, the ITAR regulations are subject to frequent updates and changes, making it difficult for employees to keep up with the intricacies of export compliance and export compliance documentation. Comprehensive export compliance training is your best defense against being hit with stiff fines and penalties for unwittingly falling afoul of the many regulations that U.S. exporters must follow.

Sources of Export Compliance Training

While the U.S. government regularly offers seminars on the intricacies of export regulations, developing in-house export compliance training and programs can be tricky without expert advice. Engaging an export compliance consultant can help you create the framework for a comprehensive ITAR compliance program, starting with an export compliance audit to determine where your business stands on compliance and an export compliance checklist to help your company create a plan for following compliance regulations and the documentation trail you need to maintain to prove that you’re following all the rules.

The Basics of an Export Compliance Program

There are many companies that provide compliance training of various sorts. When
choosing among them, look for a consultant that will help your company develop its own internal expertise on compliance. The best compliance consultants understand that a good export compliance program starts with the senior management and is disseminated downward until it becomes part of the base of company procedure and culture.

The first steps in compliance training include reinforcing the importance of compliance, explaining the necessity for a compliance manager and soliciting support for the in-house compliance manager.

Degrees of Training for Middle Management and Support Staff

Every employee who is part of the export supply chain should be trained in not only the techniques and procedures required to remain in compliance, but the reasoning behind the regulations. New employees should be required to take the training early in their orientation and undergo export compliance evaluation within 30 days of their hire. A competent export compliance consultant will work with your company to develop the appropriate levels of training for each level of your staff.

Don’t take chances with export compliance training. Be certain that the consultant you hire understands both the regulations to which your company must adhere and the best ways to train your employees about the importance of following the rules to the letter.

Ros-Lehtinen throws cold water on export control reform - The Hill's On The Money

2011-05-12T12:44:00.000-07:00

Ros-Lehtinen throws cold water on export control reform - The Hill's On The Money

Why You Need a Corporate Trade Compliance Specialist

2011-05-09T13:46:00.000-07:00

Whether your business is involved in export or import trade, there are specific regulations with which you must comply. Once upon a time, it may have been enough for your office admin assistant to track your corporation’s compliance with international regulations, but that’s no longer true. Many larger corporations have their own corporate trade compliance departments, but that’s not always a cost effective means for smaller companies. Hiring a corporate trade compliance specialist as a consultant can ensure that your export and import practices comply with all regulations without you devoting a full-time position to the task.

Advantages of Hiring a Corporate Trade Compliance Specialist

A corporate trade compliance specialist can perform an audit of your current corporate compliance policy – or help you develop one if you haven’t already. Without a corporate compliance policy, it’s far too easy for your company to slip up on obscure or newly interpreted regulations. Failure to comply with certain regulations can result in significant financial penalties, high interest fees and penalties that cost your company a lot of money. Engaging a trade compliance specialist to perform an audit and develop a trade compliance policy will save your company time and money in the long run.

The best trade compliance consultants will work hand in hand with your company to evaluate your current procedures, develop a trade compliance policy and create a training program to educate your employees about the new procedures and the importance of following them. By taking ownership of the entire process, a corporate trade compliance specialist can help your company identify issues with regulatory compliance, implement immediate solutions and develop a process to avoid any issues in the future.

Compliance with international customs and trade regulations seems to grow more complex with each day. If you’re doing business on a global scale, it’s vital that your company develop and implement an import and export trade compliance policy in order to remain competitive on the international marketplace. The first step in ensuring that your company stays on the right side of all regulatory agencies is hiring an effective, experienced corporate trade compliance specialist and following his recommendations.

Join Me at Tampa Bay Export Controls Seminar May 22, 2011

2011-03-18T05:13:00.000-07:00

Join me at the Tampa Bay area Export Controls Seminar May 22, 2011. I will be presenting the fundamentals of the Export Administration Regulations (EAR) and Foreign Trade Regulations (FTR) along with Department of Commerce / BIS representatives, trade compliance attorneys, consultants and other industry experts in a information-packed full-day seminar.

The event will take place on Tuesday March 22, 2011 at the EpiCenter in Clearwater, FL. Registration will begin at 8:00 am and the program will run until 5:00 pm. Lunch will be provided courtesy of OCR Services, Inc.

Register at https://emenuapps.ita.doc.gov/ePublic/newWebinarRegistration.jsp?SmartCode=1Q5X or by contacting Sandra Campbell at the U.S. Department of Commerce at (727) 893-3738 or via email at Sandra.Campbell@Trade.gov.

America's hottest export: Weapons - Full version

2011-02-11T11:00:00.000-08:00

America's hottest export: Weapons - Full version
An interesting Article from CNNMoney.

Plano woman pleads guilty to smuggling night-vision scopes | News for Dallas, Texas | Dallas Morning News | Headline | National News

2011-01-17T08:12:00.000-08:00

Plano woman pleads guilty to smuggling night-vision scopes | News for Dallas, Texas | Dallas Morning News | Headline | National News

How Do You Report a Drop Shipment in AES?

2011-01-12T09:35:00.000-08:00

http://blogs.census.gov/globalreach/

Great AES / USPPI Advice For Selling Stuff Online

2010-11-03T08:50:00.000-07:00

http://blogs.census.gov/globalreach

Federal Register | Revisions to the Export Administration Regulations To Enhance U.S. Homeland Security: Addition of Three Export Control Classification Numbers (ECCNs) and License Review Policy

2010-08-09T08:00:00.000-07:00

Federal Register | Revisions to the Export Administration Regulations To Enhance U.S. Homeland Security: Addition of Three Export Control Classification Numbers (ECCNs) and License Review Policy

12 Things Your Overseas Supplier Can Do To Expedite US Customs Clearance

2010-08-05T09:02:00.000-07:00

Are you losing sleep at night worrying that your latest import order will not clear customs in time to meet your company's or customer's requirement? Or worse, are you wondering if the shipment will clear at all due to some 'administrative' error? Trade compliance can help.

The U.S. Customs and Border Protection (CBP) has 12 suggestions that you can make to your overseas suppliers to ensure faster customs clearance of your merchandise.

1. Include all information required on your customs invoices.

2. Prepare your invoices carefully. Type them clearly. Allow sufficient space between lines. Keep the data within each column.

3. Make sure that your invoices contain the information that would be shown on a well prepared packing list.

4. Mark and number each package so it can be identified with the corresponding marks and numbers appearing on your invoice.

5. Show a detailed description on your invoice of each item of merchandise contained in each individual package.

6. Mark your goods legibly and conspicuously with the country of origin unless they are specifically exempted from country of origin marking requirements.

7. Comply with the provisions of any special laws of the United States that may apply to your goods, such as laws relating to food, drugs, cosmetics, alcoholic beverages, radioactive materials, and others.

8. Observe the instructions closely with respect to invoicing, packaging, marking, labeling, etc., sent to you by your customer in the United States. He or she has probably made a careful check of the requirements that will have to be met when your merchandise arrives.

9. Work with CBP to develop packing standards for your commodities.

10. Establish sound security procedures at your facility and while transporting your goods for shipment. Do not give narcotics smugglers the opportunity to introduce narcotics into your shipment.

11. Consider shipping on a carrier participating in the Automated Manifest System (AMS).

12. If you use a licensed customs broker for your transaction, consider using a firm that participates in the Automated Broker Interface (ABI).

To learn more about export trade compliance, contact Compliance Assurance today.

When Was Your Last Internal Compliance Audit?

2010-07-07T14:02:00.000-07:00

Now that you have written your compliance manual and trained your team you are "compliant", right? While that is a great start, an effective Export Management and Compliance Program (EMCP) requires internal and external trade compliance monitoring and periodic audits. In fact, the BIS considers the existence and result of an internal/external audit to be one of the nine principles of effective compliance programs for great weight mitigation in BIS's administrative cases.

When was the last time you had a thorough review of your trade compliance program? Was it performed by an unbiased, independent person or by the same individual who is responsible for the success or failure of the program?

Your company's accounting auditors would have no credibility unless they performed an independent and unbiased audit of a significant sampling of your financial transactions. By the same token, you should not accept the credibility of your trade compliance program without a similarly competent and thorough audit of your import and export transactions.

A Good Video On Export Controls In the UK

2010-06-16T09:18:00.000-07:00

Export Trade Compliance - What Every Contract Manufacturer Needs to Know About Export Compliance

2010-06-07T08:06:00.000-07:00

Contract manufacturers (CMs) have become the de facto production division for many U.S. companies. The reasons for this continued trend include outsourcing non-core competencies (i.e. manufacturing), reducing supply chain costs, reducing capital expenditures, and building flexibility into production operations.

The CM's customer who exports is required to comply with the U.S. Department of Commerce Export Administration Regulations (EAR) and the U.S. Department of State International Traffic in Arms Regulations (ITAR). The EAR has jurisdiction over "dual use" items, that is, those items with both commercial and military applications, while ITAR has jurisdiction over defense articles. But what about the CM's export compliance requirements?

CMs must first establish whether or not the assemblies or products they produce are under the jurisdiction of ITAR or EAR. For this reason it is important that the CM have a good understanding of their customer's business. Receiving drawings stamped "ITAR Controlled" are a sure bet that the products fall under ITAR jurisdiction. Are the assemblies used in defense, satellite or aerospace applications? Are the items used in telecommunications or commercial applications? If so, what are the end articles produced and what are their end-uses? CMs will likely already know the answers to these questions, which will help to determine the commodity jurisdiction.

Items under ITAR jurisdiction are defined on the U.S. Munitions List (USML), which can be found in CFR 22, Part 121. In addition to ammunition, missiles and explosives, this list includes military vessels, vehicles, aircraft, training equipment, protective personnel equipment, military electronics, optical and guidance control equipment.

It is imperative that the CM knows that the USML includes components, parts, accessories, attachments, and associated equipment specifically designed or modified for use with the equipment in each of the USML categories. Consequently, the subassemblies that a CM produces are controlled on the USML. In addition, ITAR Part 120.10 controls technical data which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles. This includes information in the form of blueprints, drawings, photographs, plans, instructions and documentation.

Items under EAR jurisdiction can be found on the Commerce Control List (CCL) in CFR 15, Part 774. The CCL includes items (commodities, software, and technology) subject to the authority of the U.S. Department of Commerce, Bureau of Industry and Security (BIS) and include "dual use" items as well as purely commercial items. The CCL does not include those items exclusively controlled for export by another department or agency of the U.S. Government. In instances where other agencies administer controls over related items, entries in the CCL will contain a reference to these controls.

If you are unsure of the export jurisdiction of an item or service, you should request a commodity jurisdiction (CJ) determination from the U.S. Department of State, Directorate of Defense Trade Controls (DDTC).

SO, WHAT DOES A CM NEED TO KNOW ABOUT EXPORT COMPLIANCE?

Under ITAR Jurisdiction
• Registration with the Department of State (DDTC). This is required even if the CM does not export the controlled items
• Notification of the DDTC of violations of criminal statutes, changes in senior management, changes in foreign ownership, and mergers and acquisitions
• Maintenance of records concerning the manufacture, acquisition and disposition of defense articles and technical data
• Application for licenses (or use of appropriate exemption) for exports of items on the USML
• Application for licenses (or use of appropriate exemption) for technology transfers of items on the USML to foreign persons or entities

Under EAR Jurisdiction

• Application for licenses (or use of appropriate exception) for exports of items on the CCL and Commerce Country Chart as required
• Application for licenses (or use of appropriate exception) for technology transfers to foreign persons or entities of items on the CCL and Commerce Country Chart as required
• Checking on end-user against government lists of prohibited parties/entities
• Ensuring that items are not intended for prohibited end-uses (i.e. WMD)

Failure to comply with these federal regulations can result in significant criminal penalties (possible prison sentences and fines) and civil action (e.g., fines and denial of export privileges).

For more information about corporate trade compliance or to contact an export trade compliance specialist please visit http://www.wearecompliant.com.

Here are some great examples of "red flags" to check for when screening your export transactions...

2010-06-07T06:18:00.000-07:00

Watch CBS News Videos Online

Iron Man 2 Needs Commodity Jurisdiction from State Department

2010-05-12T06:02:00.000-07:00

Iron Man 2 has something for everyone, including 'trade compliance geeks' like me. There is an interesting scene where Iron Man Tony Starke (Robert Downey Jr.) is grilled by U.S. Senator Stern (Garry Shandling) where the Senator insists that Starke surrender the Iron Man suit to the U.S. government. Starke insists the suit isn't a weapon but rather a high tech prosthetic device. Starke goes on to say that "I am Iron Man, the suit and I are one. You can't have it!"

Aside from the obvious issue of government seizure of private property, this would be the place to apply for a commodity jurisdiction (CJ) from the Dept. of State where there would be a determination as to whether or not the suit was specifically designed, developed, configured, adapted or modified for military application and; does not have a predominate civil application and; does not have a performance equivalent to those of an article or service used for civil applications.

In the movie, Tony Starke (Iron Man) insists that he has effectively privatized world peace by interfering with rouge regimes' military operations. In the real world this would be considered a defense service and, therefore, the suit would not be considered a predominately civil application. Sorry Iron Man, this item falls under the jurisdiction of the Department of State and you'll need a license to export the suit. As for the confiscation of the suit by the U.S. government, you will need the help of your hottie lawyer Natalie Rushman (Scarlett Johansson).

Top 5 Mistakes Exporters Make

2010-04-26T09:53:00.000-07:00

We all make mistakes, but let's face it, some mistakes are costlier than others. It seems like almost anything you do wrong as an importer or exporter of record can cost you thousands of dollars or land you in jail. This is, in fact, the case because someone in your company is certifying that the information on your documentation is true and correct. Any deviation could be construed as a material misrepresentation of fact. But again, mistakes happen so what are the five big mistakes that an exporter can make?

1) Ignorance. We've all heard the old saying, "ignorance is no excuse for the law". The old saying is very applicable in export trade compliance. Therefore, exporters must know their business which means knowing their products and customers. Simply knowing that your products are EAR99 is not enough. Do you know who is buying them? Do you know what they are doing with them and to whom they are distributing them? Of course, you are not expected to be the world's policeman but you have a duty to understand your business and any attempt to "self blind" or cut off the flow of information normally associated with your transaction will likely be perceived as a aggravating factor in an enforcement proceeding.

2) No Management Commitment. All the knowledge in the world will not benefit you or your company if top management does not support efforts to maintain a compliant business. With knowledge comes responsibility and everyone in the company (even Sales) must be on board with your commitment to export compliance (no offense Sales guys!).

3) Lack of Training. This goes hand-in-hand with management commitment. It is not uncommon for companies to have bases no. 1 and no. 2 covered but presume that their employees are being beamed podcasts of regulatory compliance training while they sleep. Training will not only empower employees to make the right decisions to run the business but studies have shown that employees who receive high levels of training are more productive, have higher levels of job satisfaction and are less likely to leave their employer.

4) Absence of an Export Management Compliance Program (EMCP). This is not simply the culmination of items 1-4. It is a system of checks and balances, internal and external audits, etc. to ensure that there is a 'system' in place to prevent mistakes. It ensures that processes and documentation changes as the business changes. A good EMCP can adapt as the company's product, people, markets and structure changes. Many reputable firms have paid stiff financial penalties for mergers or acquisitions of companies that operated for years without a compliance program. A good EMCP will ensure that your company does its due diligence as its business grows.

5) Acting with Intent. This is the single biggest mistake a company can make. Acting "with knowledge", "having known" or "should have known" are all references to acting with intent. This is detailed in more detail in General Prohibition 10 - Proceeding with transactions with knowledge that a violation has occurred or is about to occur. These violations are not the norm for most companies but are certainly the worst nightmare for those that commit them. These are the same companies that generally try to cover up their mistakes with additional lies which become the steroid-laden food of the enforcement agencies and prosecutors. Acting with intent generally brings with it criminal penalties and covering up is an aggravating factor.

Don't be disappointed if you were looking for specifics in the "five biggest mistakes" listed above. You might try and look again at how you are addressing items 1-4 above. If you do, you will probably already know what the five biggest mistakes your company is at risk of making.

Pre-Trade Compliance Consultants Discuss CBP "10+2" and You

2010-03-26T09:31:00.000-07:00

U.S. Customs and Border Protection (CBP) has published on January 2, 2008 a Notice of Proposed Rulemaking (NPRM) requiring importers and carriers to electronically submit additional information on cargo before it is brought into the United States by vessel. The Security Filing, also known as "10+2," is another step in the Department of Homeland Security's (DHS) strategy to better assess and identify high-risk shipments to prevent terrorist weapons and materials from entering the United States.

While the aim of the initiative is indeed noble, importers and their forwarders / brokers should understand how this initiative affects them. The proposed regulation will require a single party designated by the importer of record to submit an Importer Security Filing (ISF) containing the following ten data elements at the lowest bill of lading level:

1. Manufacturer (or supplier) name and address
2. Seller (or owner) name and address
3. Buyer (or owner) name and address
4. Ship-to name and address
5. Container stuffing location
6. Consolidator (stuffer) name and address
7. Importer of record number/foreign trade zone applicant identification number
8. Consignee number(s)
9. Country of origin, and
10. Commodity Harmonized Tariff Schedule number (6 digit)

The ocean carrier will be required to submit (1) a vessel stow plan used to transmit information about the physical location of cargo loaded aboard a vessel bound for the U.S; and (2) container status messages, which report container movements and changes in status (e.g., empty or full).

The good news is that most of these elements are already included in existing entry documentation. The bad news is that CBP will require importers or their agents to transmit this information (ISF) to CBP no later than 24 hours before cargo is laden aboard a vessel destined to the United States.

Can your supply chain handle these requirements?

• Can your foreign seller or its agents provide you with this info prior to lading?
• How will you know that the HTS is compliant?
• Can you provide the container stuffing info 24 hours prior to lading?
• Do you know the buyer of your cargo prior to entry?

These are the importer's requirements and your forwarders / brokers are not responsible for managing this initiative - you are! If you are not already, you should be discussing these requirements with your broker now. How will "10+2" affect you?

For more information on “10+2” and pre-trade compliance please visit us at http://www.wearecompliant.com

Trade Compliance - What You Don't Know CAN Hurt You

2010-02-22T13:12:00.000-08:00

Dual-use items are any items that can have both military and commercial applications. These items may appear to be innocuous but, in the hands of the wrong people, can be used for destructive purposes. Examples of dual-use items include communications equipment, machine tools, handcuffs, information security, electronics, lasers, and encryption software. In addition, there are thousands of metals, compounds and chemicals that are controlled because they can be used for military applications.

Many firms whose primary business is not considered 'sensitive' are unaware of their obligations under the EAR. Companies are proud to export U.S. products overseas but many have never given much thought to the consequence of these activities or the need for trade compliance consulting.

The penalties for violations of export laws can be severe. Companies considered household names have paid significant fines for violations of U.S. export laws. Many smaller companies have been penalized as well. Recent examples include a Florida company having paid a $1,102,200 civil penalty for illegal exports of fingerprint equipment and other crime control items and a New Jersey-based freight forwarder was sentenced to a $250,000 criminal fine and five years probation as well as a $399,000 administrative penalty for the shipment of items to India without the required export license.

The penalties for violations have recently been increased in an effort to improve trade compliance with the BIS regulations. On October 16, 2007, President Bush signed into law the International Emergency Economic Powers (IEEPA) Enhancement Act. The Act provides for civil penalties amounting to the greater of $250,000, or twice the value of the transaction that is the basis of the violation, that may be imposed for each violation of IEEPA. Willful violators can expect criminal penalties including fines up to $1,000,000 and/or up to 20 years in prison.

Questions Every Exporter Must Ask

· Have we had all of our items, technology and software classified by the BIS or other competent expert?

· Do we know our customer (i.e. do we check our customers against the government lists of denied parties, specially designated nationals, and other required databases)?

· Have our employees involved in export transactions received the necessary training to ensure compliance?

· Do we have adequate recordkeeping practices in the event of a BIS enforcement audit?

· Do we have a formal export trade compliance program in place to ensure compliance to U.S. laws and regulations?

Maintaining control of your exports is not a cost of doing business. Aside from being the 'right thing to do', it can save money, avoid negative publicity and improve export shipment flows. What you don't know can hurt you.