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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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Momentive - Confidential 5
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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Company Confidential 6
Main challenge: how to prevent anyone ending there?
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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
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II. Business impact of our problem solving strategy?
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Company Confidential 9
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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Company Confidential 10
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
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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
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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
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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
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Questions?