export compliance management seminar 29 may 2012: key issues & complexity in global trade...

Company Confidential

Momentive case:

Key Issues & Complexity in Global Trade Management

and

How It Affects Your Business

Presented by: Delphine Neveux

Global Trade Compliance – Regional Senior Manager Europe

Rotterdam, May 29th, 2012

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Who are we?

• Word’s largest producer of specialty chemicals:

– Epoxy, binder, adhesive, coating & ink resins

– Silicon's and quartz for industrial applications.

• 20,000 customers with broad end use markets i.e.

– Automotive

– Construction

– Energy/ Industrial/Marine

– Consumer/ Durable goods

• 104 production facilities and 10,000 employees around the world

– 51 facilities in Americas

– 32 facilities in Europe

– 21 facilities in Asia Pacific

• Sales of $7.4 billion with 80% of leadership market positions.

• Owned by the US Private Investment Firm “Apollo Management L.P”

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Main challenge: how to prevent anyone ending there?

Company Confidential

Main challenge:

How to build & sustain what Governments expect from us?

• The common denominator for successful trade compliance is:

– a system of effective internal controls

• Government expectations for internal control systems have 5 common program elements:

1. Management commitment and adequate resources

2. Policies and procedures

3. Risk assessment and program oversight

4. Training, communication and auditing

5. Corrective action

COSO

Framework

II. Business impact of our problem solving strategy?

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1. Management Commitment and Adequate Resources

– Governance of senior management in compliance effort

» Policy endorsed by high ranking officials

» Participation in periodic compliance review board meetings

» Funding of needed compliance activities

– Organization fully and knowledgeably staffed

» Clear allocation of compliance responsibility and authority

» Cross functional designation of subject matter experts

» Creation of Global Trade Compliance (GTC) Group incl.

• New position for Vice President – GTC and Senior Counsel

• Appointment of 4 x Export Compliance Officers (ECOs)

• Appointment of Product Stewards across Business Divisions

• Embedded involvement of internal auditors and legal counsels

EMPC = Export Management Compliance Program

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Policies and procedures

– Global export controls policy made easily accessible on intranet

– Documented procedures of each involved functions

– Determination matrix for controlled items & Technology control plan

– Know your customer – hands out

Momentive tools and techniques

Restricted Party Screening software (interface with SAP)

– Automated screening parties and orders’ checks (incl embargoes)

– Tool available on and off-line

– Automated updates of party-lists, controlled items, regulations per country etc

SAP:

– Automated checks and blocks

– New Material Development/ Material Introduction Maintenance (NPD/MIM)

– Validation of Foreign Trade Data – restricted only to authorized users

2. Policies, Procedures and Tooling

Company Confidential

• Risk Assessment

– Trade related risks are assessed, documented, weighed periodically

– Systemic regulatory checks are embedded in new material introduction

– On going screening of all (existing and new) materials and parties

• Program Oversight/ Auditing

– Regular, periodic auditing of compliance performance

• On effectiveness of EMCP legal controls, processes and procedures

• On efficiencies of automated tools (Screening, SAP blocks etc)

• Due-diligence by integration of new businesses (ex: M&A)

3. Risks assessment and program oversight

4. Training and Communication

– Targeted training programs (internal/external/Intranet enabled)

• GTC/Legal: in depth training

• Product Stewards: determination of strategic goods

• Customer Service/Sales: “Know your customer guidance” / Red-flag/ “do’s and

don'ts”

• Site manager: Technology Control Plan/ legal controls required

– Completion tracking and performance captured

– Communication

• Periodic compliance message- broadcasted by leadership team

• Periodic reports of compliance review board meetings

• Quality internal and external considerations

Company Confidential

Mechanism for surfacing issues

– Documented process for escalation and resolution of detected non-

conformities

– Documented remediation plans

– Verification of effectiveness of action taken

– Voluntary disclosures

Recordkeeping

Conform to regulatory requirements and Technology Control Plan to:

• Facilitate easy collection of all relevant documents

• Monitor the handling of internal compliance issues and corrective actions

5. Corrective actions

Questions?