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Exploring Export Development Opportunities: Selling Compliance. By Cindy Peeters TCO/FSO/Director of Corporate Services. Why do you care about Export Compliance?.
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Exploring Export Development Opportunities: Selling Compliance By Cindy Peeters TCO/FSO/Director of Corporate Services
Why do you care about Export Compliance? • No. 1 – it’s the law. If you export hardware or technology either out of the country or while in the US to a foreign person there are regulations to be followed. • Penalties can be steep – here are a few: • Loss of US Export Privileges • Multi-Million Dollar Fines • Imprisonment • Loss of US Govt. Contracts • Loss of Reputation
Appoint a TCO & Empowered Official Register with State Dept. if you manufacture Defense Articles Product & Tech Matrix Intangible Export Log Denied Party Screening End Use/End User Diligence Destination Control Statements Visitor Control Foreign Visitor Management Shredder Program Import Procedures Embargos & Sanctions Knowledge AES knowledge including licensed shipments Quote/Design Review Involvement Documented Procedures How to apply for a License both commercial and defense Knowledge of when a TAA or MLA is needed TRAIN Audit Program TRAIN MORE Elements of a Compliance Program
Who needs to be Sold on Compliance? • CEO/President/General Manager (Senior Management) • Engineers • Salespeople
Senior Management • Pressures include: • Budget • Production Schedule • Bottom Line
Selling Compliance to Senior Management • The Message: U.S. export and import compliance are governed by laws that are not arbitrary, and are, no less important than tax laws. • The Payoff: Good compliance offers benefits for managers, such as improved customer service, adherence to delivery schedules, and lower transaction costs. • Actions: Keep them in the loop. No manager likes to be surprised!
Pressures Include: Product Innovation Design and Manufacturer Cost and Delivery Selling Compliance to the Engineers
Selling Compliance to Engineers • Like product design, Compliance has components and critical performance factors • Platform or project for the design: military or civil? • General functionality or use of the product: determines USML or ECCN classification • How it’s designed? i.e. If we design in an ITAR chip the commercial product becomes ITAR. • Form, fit, function: Can we make this a dual use product?
Selling Compliance to Engineers • The Message: Engineers are not only concerned with the quality of their products, but very often have time limitations to deliver them. If compliance is ignored in the timeline, the completion date may be met, but the delivery date will be missed because a license was not applied for in time, or the data required for the license application is incomplete. • The Payoff: If the engineers share the information that they know with their TCO in a timely manner, they will be more likely to meet their delivery deadlines as well as their production deadlines. • Actions: Have TCO involved in design process to help determine classifications up front.
Selling Compliance to Salespeople • Pressures Include: • Competition – they want to win every job • Delivery Promises – licenses can take time • Profits / Commission
Selling Compliance to Salespeople • Many potential customers eager to get our products • Due to compliance regulations, we cannot sell to certain people and certain countries who are denied parties or prohibited from receiving certain technologies • Why would anyone want to sell a product to a customer that they could not deliver? • Customer demands for COTs items
Selling Compliance to Salespeople • The Message: It is in a salesperson’s best interest to work with their TCO to qualify the customers and their ability to buy our products, both financially and within export compliance regulations, prior to making a commitment to sell. The earlier that this happens in the sales cycle, the greater the chance to complete a sale successfully. • The Payoff: Because of the restrictions of U.S. export regulations, salespeople can pursue the most promising leads by understanding to who they can sell, and under what conditions. • Actions: Empower your salespeople by training them! TCO’s need to be involved in quote & sale.
Results • Once critical departments are on board and compliance becomes part of the process you will see positive results: • Increased International Sales are possible because you have tackled the export issues at the beginning of the process. • Your customers will look to you for solutions for marketing and selling their products globally. • You will become the expert!
Key Areas to Consider • Become a team member, not a compliance cop. We are often considered to be the following by those whose help and support we need the most: • Nuisance • Bother • Hindrance • Obstacle • Let’s fix this image! • Management Support • Procedures / Train / Audit • Utilize current processes to add export/import requirements. Create new processes if needed so people have a place to look for guidance. • Provide the RIGHT kind of training based on these procedures. • Audit the process • When issues arise, find root cause and adjust your training and procedures based on audit results. • Audit again. • Create tools to inject yourself into the everyday process
