MA. EXPORT CENTER

COMPLIANCE EXPORT EXPO

Presented by : Paul Divecchio –DiVecchio & Associates Phone: (617) 513-3230, Fax: (508) 393-3645 Email: pauldivec@earthlink.net

WHATZ HAPPENEN

• Criminalization of corporate wrongdoing• Dramatically increased Penalties $$$$$$$• Higher scrutiny on corporate ethics

“Corporate Governance” • Accountability for Executives (Decision Makers)• Evolving enforcement initiatives & tools• Global Compliance a MUST• REFORM????????

CURRENT CLIMATE - REFORM

• MANY REGULATORY CHANGES(You have to Keep Up With Them)

“EXPORT CONTROL REFORM” * Singular licensing Agency * Singular Control List * Singular Enforcement Agency * Singular IT Data Base

• Targeted Enforcement (Collaborative Effort) – “Fusion Center”

• Ambiguous Regulations/Convoluted

• Status – The “beast” publish 1st qtr 2013 (includes definition “specially designed”) - Classification/licensing – “problematic” - Census – Changes to REGS “still coming”??????

CHANGING ENVIRONMENT

• Laws & Regulations constantly shifting - Foreign policy (“as the world turns”)• Global Trends - Nonproliferation (“the know standard”) – U.S. “EPCI” – Regime “catch all” - Anticorruption Laws (FCPA) - Greater Regime participation – Mexico/Singapore/Malaysia/Taiwan - Transhipment “Best Practices” - Compliance and Enforcement issues of U.S. Corp’s foreign affiliates • Enforcement Initiatives - Spot audits –AES data/license data/PLC & PSV/safeguard trips/web • New Investigatory Tools - Global harmonization of resources - Intelligence sharing - Automation of export reporting (enforcement targeting) - Tenfold increase in Penalties

HIGHER SCRUTINY = NEW COMPLIANCE CULTURE

International Trade Compliance Is:

A Company Insurance Policy to Minimize Risk Exposure.

2

ACCOUNTABILITY

Knowledge includes not only actual knowledge of an event, but also an awareness of “high probability”* of its occurrence.

Not this!

So … use all available information.Seek more information if you have suspicions.

*The US government would like to revise its regulations to say that you have “knowledge” of an event if a reasonable exporter would consider the event “more likely than not”.

THIS WAS WITHDRAWN BY BIS

COMPLIANCE POSITION Right Person – Right Place

SKILL SETS ARE CRITICAL

PERSONALITY-INITIATIVE-LOGIC-COMMUNICATION-CAN HANDLE STRESS

SUPPORTIVE ORGANIZATION INHERANT AUTHORITY-OBJECTIVITY-VISIBILITY

Compliance Objectives

• Increase Export Compliance Awareness

• Enhance Levels of Knowledge

• Promote Coordination/Cooperation

• Review Procedures

• Identify Needs and Resources

• Establish Company-wide Compliance

Stimulate and help:

Trade Compliance Program

• Connecting People and Processes Globally

• Automation – Trade Tools

• Maintaining a Robust Compliance Program is Critical!

Compliance is a

Living ProcessNOT a Project

2. Compliance Planning

4. Measurement, Evaluation & Corrective Action

3. Implementatio

n& Operation

5. Management

Review & Certification

1. Compliance risk assessment & prioritisation

5-Step Implementation Process*

*Integrated into existing risk management processes

PROCESS ASSESSMENT• Learn how the business actually runs: gather

information from every part of the business that presents a compliance risks– Learn the trade lanes– Learn the information lanes– Find where the business will be in five years

• Assess the information• Evaluate your processes and procedures and write a

report describing the gaps• Practice Note: One size does not fit all. You cannot

write clear, practical steps for each business operation until you know, what they do, and how they do it

Export Compliance DecisionsExport Compliance Decisions

Everybody Has it??

WHEN IN IT OUT, NOT:

IT OUTWHEN IN

3. Abide by the Exporters Cardinal Rule

2. Document Decisions

1. USE COMMON SENSE!!

Demonstrate your D2

“Due Diligence”