3 juni 2012

International Trade & Compliance dr. Richard Hoff

2

The compliance challenge

Importer Exporter

Bank A Bank B

goods/ information

$

3

The compliance challenge

Importer Exporter

Bank A Bank B

goods/ information

$

export

controls

export

controls

sanctions &

embargoes

sanctions &

embargoes

taxes &

tariffs international

law

registration

& licenses

licenses

anti

corruption

AML/ CFT

4

International complexity

every trade transaction is governed by a

different set of rules…

5

What would you expect?

6

However, from practice….

the compliance officer/ department:

prevents business

does not understand business

needs to fix ad hoc issues, TODAY!

always asks for too much budget

business overrules?

does compliance add value?

7

Business case for compliance

Non-compliance

with EU, US and

local sanction &

export control laws

and regulations

Distortions supply

chain

Bad performance

towards OEMs,

suppliers, …

Reputation risk,

market position,

financial loss,…

Delays in licensing

procedures,

suspension,

debarment, non-

payment

Black listing, excluded

from access to export

controlled items, export

privileges, banking

Legal risk,

business

continuity,…

Prosecution under

criminal,

administrative or

civil law

Legal costs, claims,

reputational loss,…

8

Drivers for compliance

laws & regulations

enforcement

reputation

supply chain demands

banks are starting to ask questions

cost of non-compliance

9

Compliance takes position…

10

Example conversation

This deal means a

great opportunity

Did we check all

regs & licenses?

Come on! We need

this one!

But we need to

make sure that… My people tell me

that it is OK

And if we don’t do it our

competitors will We’ll go for it. Next

item.

11

The compliance challenge

how can my organization

be certain that our trade

transactions meet all

regulatory requirements?

how can I be sure that this

specific transaction can be

executed?

export

compliance

framework &

organization

transaction

due diligence

12

What is needed to comply?

superior knowledge of regulations (& why)

full understanding of:

business processes

the way risks & regulations impact business

a system to get a grip on a complex and

changing ‘universe of transactions’

a positive business culture (& why)

the people to do it

13

Compliance arena

culture

regulations people

business

process

business

process

output/

transaction

input/

transaction

license management

product classification

transaction screening

communication

keeping track of

regulations, red flags

list management

employment checks

training

risk analysis

reporting

post-transaction

14

culture

Software system as KSF

regulations people

business

process

business

process

output/

transaction

input/

transaction

software system: ‘E&E’

– track regulations

– list management

– product classification

– screening, alert handling

– license management

– transaction due diligence

15

Compliance has position!

knowledge

regulations

the way risks & regulations impact business

clear framework

fit with business culture

operational compliance

right people

adequate support

connected with business processes

16

The next step…

identify key risk areas/ trade transactions

export compliance framework, including

role of compliance

implement concrete measures with a view

to the 5 key elements

operate

17