Export Compliance Program First Element: “Management Commitment”
July 8, 2021
(The Exporting Source)
by Blake Gill *
Welcome back friends! Our last topic was an introduction
to the Export Compliance Program or ECP. We went over the basic elements of
an ECP and some factors of the organization that may affect the outcome of the
ECP. As promised, we will take a deeper dive now into the first element of the
ECP.
If this is the first time creating an ECP, you will begin with the last
element of build and maintain your ECP; obviously with a focus on the
“build” part. For simplicity’s sake, we will begin our deep dive into
Management Commitment. This is one of the most critical aspects of the ECP and
required for all organizations. If your organization does not have support from
management for export compliance, the efforts will be doomed from the
beginning!
You will need to explain the importance of export compliance and provide the
basic purpose of the ECP and how it will help the organization protect national
security and foreign interests. One of the best factors one can use when
explaining export compliance to management is to emphasize the devastating
monetary penalties that can occur if violations were to occur without having any
type of ECP in place. There are an immense number of examples of seven- and
eight- figure fines dished out by the government. The government even has the
power to dictate how your organization carries out export transactions with
consent agreements. If the business is ever lacking on their buy-in to a robust
ECP, fines and potential debarment from exporting is a great topic to get their
attention!
Management will need to understand that compliance comes before sales. They
need to understand the cost of training for export compliance comes before
cutting costs of training to tighten the budget. One sale being pushed to be
executed without having the proper export compliance review could cost the
company exponentially more than that one sale. Cutting the training budget on
export compliance could lead to an uninformed workforce that has a higher risk
of violation. These factors are bad for business overall and management will
need to have the same respect for compliance as the Export Compliance
responsible does.
Most organizations with a robust ECP will have a management commitment
statement that is included with the most top-level policy and procedure. This
commitment should be captured in the employee handbook and include an employee
acknowledgement form with employee signature. Finally, management will need to
be committed by providing the proper resources and budget to the department
responsible for export compliance. If a management team claims to support the
efforts of an export compliance program but there is a struggle for the
financial support, you are in for a battle! That is a sign of not having a true
commitment and the remaining efforts will come with great difficulty.
That wraps up our discussion for the first element! Make sure you come back
for our next discussion, breaking down the next element of risk
assessment.
* Blake Gill is an experienced International Trade Compliance professional with a demonstrated history of work in the technology industry. He has many years of experience working with export control, customer screening and item classification over a wide variety of products. Additionally, Blake has performed the duties of Empowered Official at multiple international companies.
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