MA. EXPORT CENTER COMPLIANCE EXPORT EXPO

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

2. A Company Insurance Policy to Minimize Risk Exposure. International Trade Compliance Is: 2

3. WHATZ HAPPENEN • Criminalization of Corporate Wrongdoing • High Scrutiny on Corporate Ethics • Accountability for Executives and Senior Managers • Significant Regulatory Changes (LOTS & CONVOLUTED) • ECR Implementation - a Challenge for Governing Agencies • Evolving Enforcement Initiatives & Tools RESULTING IN • Managing Global Compliance to be a MUST

4. ACCOUNTABILITY Knowledge includes not only actual knowledge of an event, but also an awareness of “highprobability”* 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 THIS WAS WITHDRAWN BY BIS

5. KEY COMPANY ISSUES • Licensing Jurisdiction – Commerce vs. State • Licensing Classification – up to date and accurate • Compliance Screening – comprehensive & global • Technology Transfer – collaboration & safeguards • Security – facility, IT, etc. • Auditing – Global Compliance Assess • Education & Training – ongoing & practical • Policies/Procedures – comprehensive & implemented

6. Trade Compliance Program • Connecting People and Processes Globally • Automation – Trade Tools • Maintaining a Robust Compliance Program is Critical! Compliance is a Living Process NOT a Project

7. Starting point: 7 elements of an effective (beyond paper) program senior management commitment & resources clear written standards& controls effective training & communication consistent monitoring, evaluation & reporting • job related & continuous • multimedia • unambiguous • beyond “legalese” • metrics & measurement • confidential channel to report concerns • reports to senior management & Board • “walk the talk” & visible decisions • compliance resources & positioning due care in delegating authority program oversight consistent enforcement • continuous risk assessment & improvement • review & amend program after breaches occur • no “double standard” • non-retaliation • performance alignment • avoid discretionary authority to managers likely to violate • promotions & new hires

8. PROCESS ASSESSMENT • Learn how the business actually runs: gather information from every part of the business that presents 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

9. Export Compliance Decisions IT OUT, NOT: WHEN IN WHEN IN IT OUT 1. USE COMMON SENSE!! Everybody Has it?? 2. Document Decisions Demonstrate your D2 “Due Diligence” 3. Abide by the Exporters Cardinal Rule