MA. EXPORT CENTER COMPLIANCE EXPORT EXPO Presented by : Paul Divecchio –DiVecchio & Associates Phone: (617) , Fax: (508)

International Trade Compliance Is: A Company Insurance Policy to Minimize Risk Exposure. 2

WHATZ HAPPENEN Criminalization of Corporate Wrongdoing High Scrutiny on Corporate Ethics Accountability for Executives and Senior Managers Significant Regulatory Changes (LOTS & CONVOLUTED) ECR Implementation - a Challenge for Governing Agencies Evolving Enforcement Initiatives & Tools RESULTING IN Managing Global Compliance to be a MUST

ACCOUNTABILITY Knowledge includes not only actual knowledge of an event, but also an awareness of “high probability”* 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 THIS WAS WITHDRAWN BY BIS

KEY COMPANY ISSUES Licensing Jurisdiction – Commerce vs. State Licensing Classification – up to date and accurate Compliance Screening – comprehensive & global Technology Transfer – collaboration & safeguards Security – facility, IT, etc. Auditing – Global Compliance Assess Education & Training – ongoing & practical Policies/Procedures – comprehensive & implemented

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

senior management commitment & resources clear written standards & controls effective training & communication consistent monitoring, evaluation & reporting “walk the talk” & visible decisions compliance resources & positioning unambiguous beyond “legalese” job related & continuous multimedia metrics & measurement confidential channel to report concerns reports to senior management & Board consistent enforcement due care in delegating authority program oversight continuous risk assessment & improvement review & amend program after breaches occur avoid discretionary authority to managers likely to violate promotions & new hires no “double standard” non-retaliation performance alignment Starting point: 7 elements of an effective (beyond paper) program

PROCESS ASSESSMENT Learn how the business actually runs: gather information from every part of the business that presents compliance risks –Learn the trade lanes –Learn the information lanes –Find where the business will be in five years Assess the information Evaluate your processes and procedures and write a report describing the gaps Practice Note: One size does not fit all. You cannot write clear, practical steps for each business operation until you know, what they do, and how they do it

Export Compliance Decisions Everybody Has it?? WHEN IN IT OUT, NOT: IT OUT WHEN IN 3. Abide by the Exporters Cardinal Rule 2. Document Decisions 1. USE COMMON SENSE!! Demonstrate your D 2 “Due Diligence”