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Emerson First International Trade Compliance Conference. 15 th /16 th March 2006 – St. Louis Trade Compliance Certification and Peer Audits - Europe, Middle East & Africa. European Trade Compliance Team. Renata Jungo Brüngger - General Counsel Europe
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Emerson First International Trade Compliance Conference 15th/16th March 2006 – St. Louis Trade Compliance Certification and Peer Audits - Europe, Middle East & Africa
European Trade Compliance Team Renata Jungo Brüngger - General Counsel Europe Phil Shaw - Europe, Middle East & Africa - compliance John Andrews - Europe, Middle East & Africa – compliance Rob Atkinson - Middle East – Compliance/legal Jeffrey Jackson - Process Management Daniel – Europe, Middle East & Africa, Asia Pacific – Denied Parties
The Challenge for Emerson EMA Compliance !!!! • How to ensure Emerson divisions implement required regulatory compliance procedures covering multiple jurisdictions including US, EU and national requirements ? • How to maintain and manage the life cycle of compliance with the limited resources of the EMA compliance team ?
Territory Support Support Asia Africa Middle East
Trade Compliance - process to Self Certification Start-up report Country/ Division plan Initial notification Start-up meeting Country/Division completes Self Cert checklist Formal Audit Formal Audit report Use ECME20/22 Attain Self Certification Country/Division Implement plan Country/ Division plan
Start-up meeting Start - up Meeting • One day meeting • Senior Management attendance • Outline the Emerson compliance requirements • Question and Answer session to understand the divisions business. • Territory and Market Channels • Products – Application • Introduce the laws UN, US, EU, and national • Define Screening processes and tools • Introduce compliance Web site, checklist documents and tools. • Define Templates for completion by the Division and timescales.
Trade Compliance - process to Self Certification Start-up report Country/ Division plan Initial notification Start-up meeting Country/Division completes Self Cert checklist Formal Audit Formal Audit report Use ECME20/22 Attain Self Certification Country/Division Implement plan Country/ Division plan
Country/ Division plan Country/division plan • Assignment of Country/Division Compliance Manager, Gatekeepers and Compliance Users • Compliance of Geographical locations • Training requirements, and timeline • Identify Procedures for modification or creation. • Product Certification, US,EU and National • Submit time scale plan.
Trade Compliance - process to Self Certification Start-up report Country/ Division plan Initial notification Start-up meeting Country/Division completes Self Cert checklist Formal Audit Formal Audit report Use ECME20/22 Attain Self Certification Country/Division Implement plan Country/ Division plan
Country/Division completes Self Cert checklist Validation Audit Checklist Contents SECTION 1 - ORGANISATION SECTION 2 - PROCEDURES SECTION 3 – FORMAL RECORD KEEPIING SECTION 4 – TRAINING SECTION 5 – SALES / MANUFACTURING SECTION 6 – MANAGEMENT COMMITMENT
Country/Division completes Self Cert checklist Checklist - Question Example Section 1 Organisation Auditors Instru. Score Question No Guideline Are there written procedures to identify all trade compliance related personnel at this location? Y = 10 points N = 0 The document should be available and individuals should be aware. Verify existence and awareness of document. Interview as appropriate 1 10 COMMENTS: Document seen and part of QMS.
Country/Division completes Self Cert checklist Checklist - Question Example Section 1 Organisation Auditors Instru. Score Question No Guideline Have all employees who have taken on trade compliance responsibilities received training? Y = 10 points N = 0 The training records should be available and controlled.. Verify existence and accuracy. Interview as appropriate. 3 10 COMMENTS: Document seen and part of HR Records
Country/Division completes Self Cert checklist Checklist - Question Example Section 2 Procedures Question Guideline Auditors Instru. No. Score Is there a procedure in place for checking EU Dual-Use and Technology transfer for European designed products? Y = 10 points N = 0 points A procedure should be available. The EU Dual-Use and Technology regulations should also be checked for product restrictions. Verify existence and awareness of the procedure 7 0 COMMENTS: Document not available - action required
Country/Division completes Self Cert checklist Checklist - Question Example Section 6 Management Commitment Auditors Instru. Score Question No Guideline Is management commitment demonstrated by providing adequate resources? PJ = max.50 points min. = 0 points Adequate resources must be available to ensure that full trade compliance can be performed and maintained. Check scoring against sections 1-5. Verify management awareness & involvement and that adequate resources are available. . Interview as appropriate 1 40 COMMENTS: Auditing scheduled & records seen. Management review outstanding
Checklist - SCORE SUMMARY SCORE: POSSIBLE = ACTUAL =
Trade Compliance - process to Self Certification Start-up report Country/ Division plan Initial notification Start-up meeting Visit Country/Division completes Self Cert checklist Formal Audit Formal Audit report Use ECME20/22 Attain Self Certification Country/ Division Action plan Country/Division Implement plan
Self Certification • Signed by Senior Manager of Division • Valid for 12 months
Self Certification – vital musts • Trade Compliance plan towards Self Certification must have: • Clearly defined lines of responsibility for Trade Compliance • Detailed written procedures, which are being followed every day • Training must be in place for all involved • Required Screening procedures and proof of implementation is mandatory • Traceable and up to date record system • Trade Compliance responsibilities written into job descriptions
Common Issues found • Cases where the end user and end use is not known • Screening of all orders and shipments not being carried out • Access to Export Compliance Management Europe(ECME) tools by Divisions outside the Emerson firewall – costly implementation. • World-wide Divisions – sometimes not in alignment with compliance practices i.e. screening practices. • Divisions not willing to implement full compliance until clear Emerson policy is defined.
Common issues found • Terms and Conditions - There are numerous occasions where operations/divisions are trading: • Without including Emerson Terms and Conditions • Without referencing Emerson Terms and Conditions • Under Client Terms and Conditions • No Trade Compliance statements on quotations or order acknowledgements • Distributor & Representative/Agent agreements • Few in place • Those in existence, often years out of date • No records of agreement (exception)
Auditing Auditing is the ONLY way you can keep legal with respect to Trade Compliance. Senior US Government official
After Self Certification - How do we handle the Emerson compliance Monster ? How to maintain and manage the life cycle of compliance with the limited resources of the EMA compliance team
Emerson Process Management - Peer Audit Process • Two Process Management employees from one facility, audit another Process Management facility. Example: UK France Rosemount Valves • Peer Auditors(2 off) are selected from European Country Compliance Managers and Gatekeepers • Schedule and Mange the skill sets of individuals who perform the audits! • Peer Auditor’s are supplemented by Trade Compliance team.
Emerson Process ManagementTrade Compliance process – Peer Auditing Every two years Senior Audit Flash Audit Attain Self Certification Peer Audit Within one year Use ECME33/34 Audit report Application for re Self Cert Action plan Actions complete Self Cert renewed
Emerson Process ManagementTrade Compliance process - Post Self Certification Every two years Senior Audit Flash Audit Attain Self Certification Peer Audit Within one year Use ECME19/20 Use ECME33/34 Audit report Application for re Self Cert Action plan Actions complete Self Cert renewed
Re - Auditing - Emerson companies • Auditing process will start 12 months after Self certification ~ during FY07 • The Emerson companies are independent entities, therefore a system of Peer Auditors is not feasible • A consideration under evaluation is that auditing for these companies will be carried out by ‘external consultants’ These are typically semi-retired employees who are experienced in this field. • This audit solution would have a large financial benefit to Emerson as well as using Auditors familiar with the company.
Summary - Self Certification - Current situation Process Management Emerson Process Management started working towards Self Certification over 3 years ago. • To date 30 Process Management companies are Self Certified and have been audited each year as well as attended two senior audits • 11 Process Management companies in Europe (some ‘recent’ acquisitions) and 8 in the Middle East, are working towards initial Self Certification. This process should be completed Q3/4FY06 Process Management Emerson Process Management started working towards Self Certification over 3 years ago. • To date 30 Process Management companies are Self Certified and have been audited each year as well as attended two senior audits • 11 Process Management companies in Europe (some ‘recent’ acquisitions) and 8 in the Middle East, are working towards initial Self Certification. This process should be completed Q3/4FY06
Self Certification - Current situation Emerson companies The path to Self certification for Emerson companies started approximately 2 years ago, but was a phased introduction. • At present there are 2 companies (EES, Liebert Hiross) which are Self Certified. • 26 Emerson companies in Europe and 8 in the Middle East are working progressively towards initial Self Certification. This process should be completed Q4FY06 • The number of companies continues to increase with acquisitions
EMA Trade Compliance Group objectives • Main objective is to have all Emerson companies in Europe and the Middle East trade compliant (Self Certified) by Q4FY06 • Following self certification, ensure all Companies continue to be trade compliant by a systematic auditing process.
So we must manage how we do business!!!! Operations Sales US/UN Export Regulations Local Export Authorities