MEC EXPORT

COMPLIANCE AWARENE$$

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

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”

What You Know!What You Know!

Stated & ImpliedStated & Implied

• Don’t be an Ostrich !

• ENHANCE EXPORT OPPORTUNITIES

• RISK AVOIDANCE

Company Objective

CURRENT CLIMATE

• Mandatory AES Compromised (DHS vs. Census)

• Patriot Act Penalty Increase - $10K to $50K

• PRC – “Catch All”-conventional military• Enforcement Oversight - AGRESSIVE• Industry Compliance Initiative – A MUST

What can happen if it goes wrong?• Fines

• Negative Publicity

• Denial export Privileges

• Disruption of Business

• Jail Time

Methods of Enforcement

• Industry Sources - Informants

• Intelligence Sources

• Outreaches

• Safeguards Verification Program

• Visa Application Review Program

• Export Document Review (Targeting) ( SED/AES, Airway Bills, Bills of Lading)

• Public Sources - Newspapers, Trade Publications, Internet

KEY EXPORT COMPLIANCE RISKS

• WRONG JURISDICTION (Boeing –L3)• CLASSIFICATION (NONE/WRONG)• GLOBAL DENIED PARTY REVIEWS • SLOPPY PAPERWORK• EMBARGOES – DIVERSIONS• ANTIBOYCOTT COMPLIANCE• TECHNICAL DATA TRANSFER

– EMPLOYEES

– OUTSOURCE

– CUSTOMER’S DATA – SPONSOR LETTERS FOR VISAS

Some helpful websites• www.bis.doc.gov - Bureau of Industry & Security (BIS), U.S.

Dept of Commerce -BIS EAR, press releases

• BIS web site “RESOURCE LINKS” takes you to other federal agency web sites

• www.census.gov/foreign-trade/schedule/b/index - U.S. Census Bureau - Schedule B Nos.

• www.treas.gov/offices/eotffc/ofac – Office of Foreign Assets Control (OFAC)- summary sheets on embargoed (and other) countries

• www.cbp.gov/xp/cgov/export/aes - U.S. Customs and Border Protection - Automated Export System (AES)

EFFECTIVE COMPLIANCE PROGRAMS EXECUTIVE COMMITMENT

• Corporate Governance – establish a “code of conduct” • Compliance Focal Point • Location/Authority/Skill Sets/Budget/Recognition

• Compliance Team• Engagement – High Morale

• Global Compliance • All Divisions• Subs/Branches/JV• Unaffiliated

• Compliance Assessments (not audits)• Include acquisitions

• Education – Corporate Awareness • U.S. and Overseas Affiliates

HOW TO ACHIEVE ! KEY COMPANY ISSUES

• RESOURCE COMMITMENT

• Classification of products/technology

• Technology Transfer Monitoring

• Company Export Compliance Manual (formal)

• Company Personnel Awareness (training/education)

• Integration of Compliance with acquisitions

• Subsidiary Compliance

• Pro-act with governing licensing agencies

• Automation of the Compliance Program

Company Compliance“Today”

• Corporate Education (company awareness-global)

• Corporate Training (operational personnel)

• Roll out Formal Compliance Program

• Form Compliance Committee

• Automate Compliance Checks Wherever Possible

< Maintain a Robust Program >