Quality within a compliance program

June 24, 2021

(The Exporting Source)

by Blake Gill *

Oops, they did it again! A well-known company has recently agreed to pay some hefty fines for violations of the ITAR. I won’t spill the beans and spoil all the details, but the company was dinged for the same or similar actions before. They promised to get their act together, clean up the mess that allowed the violations to occur, and ensure it doesn’t happen again.

When the regulatory bodies hand down fines, usually there is an amount stipulated to go towards your compliance program to help the company mitigate the factors that led to the mishandling. The government takes this very seriously and expects these fines to help lead to a more robust and reliable program. Since we have an example of the same violation occurring after those same mishaps were disclosed, the fine is substantial at $13 million. How can this happen? You caught your slip-up and properly disclosed it to the authorities, yet the same violation occurred again only a few years after?

In my experience, most successful businesses have a direct correlation between quality and compliance functions. From afar the two programs are similar in that they are dictated from regulatory bodies, they both have cost-saving initiatives, and most importantly both rely on an auditing function to ensure all the policies and procedures are being followed.

There it is, the audit function. Auditing your functions against the agreed-upon terms in the policy and procedure can be your saving grace when it comes to statutory compliance. That is simply because you don’t make the rules here. The rules are handed to you on a silver platter! The government almost writes your compliance program for you with all the resources made available, including published examples of what not to do.

If there is any lesson to be learned here, it would be to treat your compliance program as a quality function. It is of the highest importance, practically written for you, and you’re even allowed to catch your own mistakes without penalty in some cases. So, break out those audit hats and show your company you mean business! After all, putting a program in place is only the first step; making sure the business performs within those boundaries is where the real fun begins.

* 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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