by | Oct 31, 2012 | Exports

Notes on a crash course in creating Export Management & Compliance Programs

by Peter A. Quinter & Melissa Groisman, guest columnists

Last month, Peter Quinter, Chair of the Customs and International Trade Law Group at GrayRobinson, joined Jonathan Barnes, Special Agent with the Miami Field Office of the Office of Export Enforcement for the Bureau of Industry and Security (BIS), US Department of Commerce, in running Export Compliance Bootcamps for Florida-area exporters, freight forwarders, and other trade and transport service providers. Here are highlights:

Special Agent Barnes shared many stories about his vast and varied experiences as a BIS Agent, and offered very pragmatic advice for any exporter to address the most common causes of civil enforcement cases regarding export violations:

  1. Incomplete transaction information
  2. Ignoring red flags
  3. Human error
  4. Incorrect SED/EEI filing

When going into more detail on each of these subjects, Special Agent Barnes spent a lot of time talking about Category #3 – human error. He strongly urged all exporters at the Bootcamps to take the time to create an Export Management and Compliance Program (EMCP). Although having written compliance program in place is not required of all exporters, it is an enormously effective tool to help an exporter manage its export transactions and detect human errors. It is also (as we’ve observed as attorneys) a positive factor in mitigating any potential penalty assessed by BIS for a violation.

Special Agent Barnes also stressed the importance of correctly creating and implementing an EMCP. Many times exporters attempt to create these EMCPs on their own and wind up creating more problems for themselves. Special Agent Barnes recommended working with BIS as well as with a customs and trade attorney to design an effective EMCP.

What is an EMCP?

An EMCP takes individual decisions and pieces of information and builds them into an organized, integrated system for managing export-related decisions and transactions to ensure compliance with Export Administration Regulations (EAR) and license conditions.

While EAR allows flexibility in the manner in which US companies meet compliance requirements, BIS strongly recommends that all parties dealing with export transactions maintain a vigorous and effective EMCP incorporating nine key elements:

1. Management commitment: Senior management must establish written export compliance standards for the organization, commit sufficient resources and ensure appropriate senior organizational official(s) are assigned overall responsibility for the compliance program.

2. Continuous risk assessment. This requires training staff to recognize red flags. Two resources:

3. A formal, written ECMP: Effective implementation and adherence to written policies and operational procedures.

4. Ongoing compliance training and awareness.

5. Cradle-to-grave export compliance security: Screening of employees, contractors, customers, products, and transactions and implementation of compliance safeguards throughout the export life cycle including product development, jurisdiction, classification, sales, license decisions, supply chain, servicing channels, and post-shipment activity.

6. Adherence to regulatory recordkeeping requirements (EAR Part 762).

7. Internal and external compliance monitoring and periodic audits.

8. Internal program for handling compliance problems, including reporting export violations.

9. Taking corrective actions in response to export violations.

Next steps – what should an exporter do to create an EMCP?

First, audit your own exporting processes and see how you are currently doing in comparison to requisite EMCP provisions. You can download BIS’s EMCP Audit Module: Self-Assessment Tool here.

Second, thoroughly read the BIS Compliance Guidelines: How to Develop an Effective Export Management and Compliance Program and Manual, available here. This official BIS 166-page document provides an exporter with a strict and specific set of guidelines for establishing an EMCP effectively.

Next, contact an experienced export compliance attorney to draft and assist in the implementation of the EMCP, including training of affected employees in the logistics, compliance, or export departments of the company.

BIS has made it clear that establishing and implementing an effective EMCP is key for all exporters and this responsibility should not be taken lightly. Companies should not be afraid to ask for help from BIS directly, skilled and experienced consultants, or customs and international trade attorneys.

Please call or email Peter Quinter with any questions or comments at [email protected] or (954) 270-1864.

Copyright © 2012 GrayRobinson

About the authors

Long-time Datamyne Blog contributor Peter Quinter is a Shareholder in GrayRobinson’s Miami and Ft. Lauderdale offices and Chair of the Customs & International Trade Law Group. Mr. Quinter principally represents persons and companies involved in international trade and transportation. He is editor of the GrayRobinson Customs and International Law Blog, where a version of this column originally appeared.

Melissa Groisman Steinfeld is an Associate Attorney at GrayRobinson, member of the firm’s Customs & International Trade Law Group, and a contributor to its blog.

The opinions expressed in this article are those of its author and do not purport to reflect the opinions or views or Descartes Datamyne. In addition, this article is for general information purposes only and it’s not intended to provide legal advice or opinions of any kind and my not be used for professional or commercial purposes. No one should act, or refrain from acting, based solely on this article without first seeking appropriate legal or other professional advice.

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