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MA. EXPORT CENTER COMPLIANCE CLINIC

MA. EXPORT CENTER COMPLIANCE CLINIC. Presented by : Paul Divecchio –DiVecchio & Associates Phone: (617) 513-3230, Fax: (508) 393-3645 Email: pauldivec@earthlink.net. CURRENT CLIMATE MANY REGULATORY CHANGES (You have to Keep Up With Them)

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MA. EXPORT CENTER COMPLIANCE CLINIC

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

  2. CURRENT CLIMATE • 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) • Ambiguous Regulations/Convoluted • Coordinate and Communicate – A MUST

  3. WHATZ HAPPENEN • Criminalization of corporate wrongdoing • Dramatically increased Penalties • High scrutiny on corporate ethics • Accountability for directors and individual managers • Evolving enforcement initiatives & tools • Global Compliance a MUST • REFORM????????

  4. CHANGING ENVIRONMENT • Post 9/11 – Corporate Governance • 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 search • New Investigatory Tools - Global harmonization of resources - Intelligence sharing - Automation of export reporting (enforcement targeting) - Tenfold increase in Penalties HIGHER SCRUTINY = NEW COMPLIANCE CULTURE

  5. What can happen if it goes wrong? • Fines (CONGRESS PASSED 10/03/07) $50k TO $250k IEEPA • Negative Publicity • Denial Export Privileges • Disruption of Business • Jail Time

  6. 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

  7. The “Corporate Challenge”How to get 100% of employees & their managers to work to the same standards of integrity (and tell you if they see problems)?

  8. 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

  9. 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

  10. 1. Compliance risk assessment & prioritisation 2. Compliance Planning 5. Management Review & Certification 3. Implementation & Operation 4. Measurement, Evaluation & Corrective Action 5-Step Implementation Process* *Integrated into existing risk management processes

  11. 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

  12. EVERYONE'S ACCOUNTABLE

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