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Export Compliance

Export Compliance. Global California 2009 April 3, 2009 Santa Clara, CA. EXPORT CONTROL BASICS. Export Controls are based on item, destination, end-user and end-use. Export controls are designed to protect the national security, foreign policy and economic interests of the United States.

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Export Compliance

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  1. Export Compliance Global California 2009 April 3, 2009 Santa Clara, CA

  2. EXPORT CONTROL BASICS • Export Controls are based on item, destination, end-user and end-use. • Export controls are designed to protect the national security, foreign policy and economic interests of the United States. Source ; Bureau of Industry and Security Office of Export Enforcement

  3. PENALTIES Criminal: 20 years imprisonment $250,000 fine ($1,000,000 corporation) Civil: $250,000 max per violation or 2 x value of export and potential Denial of export privileges Source ; Bureau of Industry and Security Office of Export Enforcement

  4. PENALTIES Avoid becoming an Enforcement Statistic. Make export compliance a priority! Requires top-down commitment from the CEO to the warehouse. Look for Changes to the BIS Regulations Example – September 22, 2008, 115 new entries to the BIS Entities List creating a license requirement for the export of all items subject to the EAR. Source ; Bureau of Industry and Security Office of Export Enforcement

  5. BASIC COMPLIANCE TOOLS • Have an Export Management and Compliance Plan. • Write clear operating guidelines, distribute to all personnel and provide training. • Identify and publish all export control functions, responsible personnel, and their contact information. Source ; Bureau of Industry and Security Office of Export Enforcement

  6. HOW TO DESIGN A COMPLIANCE PROGRAM • Compliance program design – there is no “one size fits all” • Use Export Management System Guidelines • Cited in 15 CFR sec 766 sup. 1 • Described in detail on the BIS Web Site • Use Internal Compliance Plan Guidelines • 15 CFR sec 752.11 • Industry Best Practices Source ; Bureau of Industry and Security Office of Export Enforcement

  7. PRINCIPLES OF AN EFFECTIVE COMPLAINCE PROGRAM 1. Whether the company has performed a meaningful risk analysis. 2. Existence of a formal written compliance program. 3. Appropriate senior officials responsible for compliance program. 4. Adequate training provided to employees. 5. Company effectively screens customers and transactions. 6. Company meets recordkeeping requirements. 7. Existence of internal system for reporting export violations. 8. Conducts and maintains results of export compliance audits. 9. Appropriate remedial activity taken in response to violations. Source ; Bureau of Industry and Security Office of Export Enforcement

  8. EVIDENCE OF EFFECTIVE COMPLIANCE • Documentation • Training records • Disciplinary records for violations of company policy • Due diligence/screening checklist • Evidence of record retention • Provide results of compliance audits • Clearly written designation of responsible personnel Source ; Bureau of Industry and Security Office of Export Enforcement

  9. WHAT THE EXPORTER MUST KNOW • Correct product classification: This is the exporter’s responsibility – classify, verify, and document! • Identify all parties to a transaction; verify legitimate intermediaries and name ultimate consignee on export records. Source ; Bureau of Industry and Security Office of Export Enforcement

  10. “KNOW YOUR CUSTOMER” GUIDANCE • Be Aware of Diversion Risks! • Lists you must check prior to export: • Denied Parties • Embargoed countries • BIS Listed Entities • BIS General Orders • Exercise due diligence where Red Flags are present; refrain from/report questionable transactions. Source ; Bureau of Industry and Security Office of Export Enforcement

  11. “KNOW YOUR CUSTOMER” GUIDANCE • Research customers – internet is a great place to start. • Whenever practical talk to new customers about their markets and product applications. • Learn to identify and recognize “Red Flags”. • If there are “Red Flags” inquire. Source ; Bureau of Industry and Security Office of Export Enforcement

  12. NUCLEAR WEAPONS Centrifuge High Speed Thermal Cameras Mass Spectrometer Vacuum Pumps BIOLOGICAL WEAPONS Bacterial Strains Coated Valves and Pumps Fermenters Presses Source ; Bureau of Industry and Security Office of Export Enforcement CHEMICAL WEAPONS Precursor chemicals Coolers/Heat Exchangers Mixing Vessels MISSILES Composites Machine Tools Filament Winding Equip Accelerometers Vibration Test Equipment EXAMPLES OF DUAL USE ITEMS

  13. HOW VIOLATIONS HAPPEN IN GOOD COMPANIES • Overwhelmed by end of quarter orders and processing. • New personnel using outdated go-by documentation. • Export manager on vacation (cross train back up personnel). • Lack of communication with sales staff and foreign distributors. Source ; Bureau of Industry and Security Office of Export Enforcement

  14. INCOMPLETE/INCORRECT EEI INFORMATION • Incorrect ECCN • Improper use of NLR (No license required) • Incorrect Ultimate Consignee • If your forwarder completes your AES filing, ensure shipping instructions are clear and defined Source ; Bureau of Industry and Security Office of Export Enforcement

  15. FAILURE TO INFORM ON LICENSE CONDITIONS • Identify all license conditions and identify any conflict with the sales transaction. • Resolve any conflicts before proceeding with transaction. Even if this means amending the license! • Notify intermediate and ultimate consignees of all BIS license conditions. • Submit all reporting as required by BIS license. Source ; Bureau of Industry and Security Office of Export Enforcement

  16. Summary • If you identify a violation, immediately assess and contain problem, work with your management to evaluate the benefits of voluntary disclosure to BIS/OEE. • Disclosures related to failure to obtain one-time review for use of the ENC exemption receive favorable treatment and are encouraged. Source ; Bureau of Industry and Security Office of Export Enforcement

  17. FedEx® Global Trade Manager Your free, online shipping assistant

  18. Common Challenges International Shippers Encounter:   Missing, incorrect or improperly completed documents Complying with regulations and laws FedEx Global Trade Manager September 2008

  19. FedEx Global Trade Manager Solutions With FedEx Global Trade Manager, you can: Find the proper documents required for international shipping Prepare, store and reuse customs documents online View advisories concerning your shipment Research country profiles Search an up-to-date international denied-party-screening database Use product profiles to manage your commodity information FedEx Global Trade Manager September 2008

  20. Find International Documents This tool helps you determine and print the documents needed to accompany your international shipments, both express and ground, thereby helping to ensure a smooth customs clearance FedEx Global Trade Manager September 2008

  21. Find International Documents Enter your origin and destination countries Select whether you’d like FedEx® Global Trade Manager to help you find the particular documents you need for this shipment or to show you all the available documents pertinent to the import and export countries and shipment type you specified FedEx Global Trade Manager September 2008

  22. Find International Documents Enter the product information, including: The name of the product The Harmonized System Code (you can search for this right on FedEx® Global Trade Manager) The customs value The country of manufacture You have the option to save the product information in a product profile for fast and easy access at a later time FedEx Global Trade Manager September 2008

  23. Find International Documents View the list of recommended documents for your shipment, or a document list based on the import and export countries Some of the most frequently used documents are available for online completion, including the Commercial Invoice, the Pro Forma Invoice, the NAFTA Certificate of Origin, the Certificate of Origin and the packing list FedEx Global Trade Manager September 2008

  24. Document Preparation Center Prepare, store and manage customs documents online. Save time avoiding duplicate entry of information when you save document profiles and reuse documents for future shipments. FedEx Global Trade Manager September 2008

  25. Document Preparation Center To begin, select one or more documents from to complete them online, and either print or click Ship to prepare your shipment. Save document profiles for international shipments to edit and reuse a set of documents when you repeat similar shipments. Also initiate a similar shipment with your document profiles. Each document profile relates to an international shipment you have already prepared. You can easily search and sort to access your profiles efficiently. You can also customize your view. FedEx Global Trade Manager September 2008

  26. Document Preparation Center Save partially completed documents to come back and finish at a more convenient time. Select a pending document profile to resume preparation and complete or to delete as needed. • Prepared customs documents are stored in the Document Archive for complete visibility. • View and modify each document or create a document profile to reuse the document for future shipments. • Upload your company lettered to be used with your Commercial invoice and also upload a signature image for customized and professional documents. FedEx Global Trade Manager September 2008

  27. Document Preparation Center All prepared customs documents are stored in the Document Archive for complete visibility. View and modify each document or create a document profile to reuse the document for future shipments. Upload your company lettered to be used with your Commercial invoices and also upload a signature image for customized and professional documents. FedEx Global Trade Manager September 2008

  28. Advisories This feature gives you important regulatory information for the import and export side of your transaction, as well as for the commodity you are shipping FedEx Global Trade Manager September 2008

  29. Advisories Enter your origin and destination countries, transaction currency, and shipping and insurance charges Enter the product information, including: The name of the product The Harmonized System Code (you can search for this right on FedEx® Global Trade Manager) The customs value The country of manufacture You have the option to save the product information in a product profile for fast and easy access at a later time FedEx Global Trade Manager prepares a report containing the applicable shipping advisories that you need to know about FedEx Global Trade Manager September 2008

  30. Country Profiles Provides an overview of essential, country-specific shipping information and regulatory requirements, including demographics, business information and statistics This resource enables you to research a country upfront for sourcing decisions before you ship FedEx Global Trade Manager September 2008

  31. Denied Party Screening Identifies individuals, companies and other parties that have been denied the privilege of engaging in international business transactions FedEx Global Trade Manager September 2008

  32. International Resource Center Here you’ll find several useful tools and resources designed to make international shipping accessible and straightforward, including: International shipping checklist International shipping reference guide Global trade links FedEx international shipping resources FedEx Global Trade Manager September 2008

  33. FedEx Global Trade Manager FedEx Global Trade Manager is just one more way FedEx can help simplify your shipping, saving you time and money and boosting your productivity Log in today at https://gtm.fedex.com/GTM to see how easy it is! FedEx Global Trade Manager September 2008

  34. Thank You

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