Export Compliance Program Overview

1.Management Commitment

Effective management support includes the provision of adequate resources to the compliance staff and support for compliance personnel’s authority within an organization.

2. Risk Assessment

While there is no “one-size-fits all” risk assessment, the exercise should generally consist of a holistic review of the organization from top-to-bottom and assess its touch points to the outside world. This process allows the organization to identify potential areas in which it may, directly or indirectly, engage with export controls, embargoed entities/countries, denied persons etc.

3. Export Authorization

Effective compliance programs generally include internal controls, including policies and procedures, in order to identify, interdict, escalate, report (as appropriate) when and where potential exports and licensing requirements are needed and satisfied. To the extent information technology solutions factor into the organization’s internal controls, the organization should select and calibrate the solutions in a manner that is appropriate to address the organization’s risk profile and compliance needs.

4. Recordkeeping

Recording keeping is essential, which will include evaluation of clients and customers, products, services, supply chain, intermediaries, counter-parties, transactions, and geographic locations, depending on the nature of the organization. There are requirements for record retention, the devil is in the details in knowing when the clock starts.

5. Training

An effective training program is an integral component of a successful CP. The training program should be provided to all appropriate employees and personnel on a periodic basis (and at a minimum, annually) and generally should accomplish the following: (i) provide job-specific knowledge based on need; (ii) communicate the compliance responsibilities for each employee; and (iii) hold employees accountable for compliance training through assessments.

6. Audits

Audits assess the effectiveness of current processes and check for inconsistencies between these and day-to-day operations. A comprehensive and objective testing or audit function within a CP ensures that an organization identifies program weaknesses and deficiencies, and it is the organization’s responsibility to enhance its program, including all program-related software, systems, and other technology, to remediate any identified compliance gaps. Such enhancements might include updating, improving, or recalibrating CP elements to account for a changing risk assessment or sanctions environment. Testing and auditing can be conducted on a specific element of an CP or at the enterprise-wide level.

7. Handling export violations and taking corrective actions

A hallmark of a compliance program that is working effectively in practice is the extent to which a company is able to conduct a thoughtful root cause analysis of misconduct and timely and appropriately remediate to address the root causes.

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