2. MEC EXPORT COMPLIANCE AWARENE$$ Presented by : Paul Divecchio –DiVecchio & Associate Phone: (617) 513-3230, Fax: (508) 393-3645 Email: pauldivec@earthlink.net

4. 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”

5. What You Know! Stated & Implied

6. Don’t be an Ostrich ! ENHANCE EXPORT OPPORTUNITIES RISK AVOIDANCE Company Objective

7. CURRENT CLIMATE Mandatory AES Compromised (DHS vs. Census) Patriot Act Penalty Increase - $10K to $50K PRC – “Catch All”-conventional military Enforcement Oversight - AGRESSIVE Industry Compliance Initiative – A MUST

8. What can happen if it goes wrong? Fines Negative Publicity Denial export Privileges Disruption of Business Jail Time

9. Methods of Enforcement Industry Sources - Informants Intelligence Sources Outreaches Safeguards Verification Program Visa Application Review Program Export Document Review (Targeting) ( SED/AES, Airway Bills, Bills of Lading) Public Sources - Newspapers, Trade Publications, Internet

10. KEY EXPORT COMPLIANCE RISKS WRONG JURISDICTION (Boeing –L3) CLASSIFICATION (NONE/WRONG) GLOBAL DENIED PARTY REVIEWS SLOPPY PAPERWORK EMBARGOES – DIVERSIONS ANTIBOYCOTT COMPLIANCE TECHNICAL DATA TRANSFER –EMPLOYEES –OUTSOURCE –CUSTOMER’S DATA –SPONSOR LETTERS FOR VISAS

11. Some helpful websites www.bis.doc.gov - Bureau of Industry & Security (BIS), U.S. Dept of Commerce -BIS EAR, press releases BIS web site “RESOURCE LINKS” takes you to other federal agency web sites www.census.gov/foreign-trade/schedule/b/index - U.S. Census Bureau - Schedule B Nos. www.treas.gov/offices/eotffc/ofac – Office of Foreign Assets Control (OFAC)- summary sheets on embargoed (and other) countries www.cbp.gov/xp/cgov/export/aes - U.S. Customs and Border Protection - Automated Export System (AES)

12. EFFECTIVE COMPLIANCE PROGRAMS EXECUTIVE COMMITMENT Corporate Governance – establish a “code of conduct” Compliance Focal Point Location/Authority/Skill Sets/Budget/Recognition Compliance Team Engagement – High Morale Global Compliance All Divisions Subs/Branches/JV Unaffiliated Compliance Assessments (not audits) Include acquisitions Education – Corporate Awareness U.S. and Overseas Affiliates

13. HOW TO ACHIEVE ! KEY COMPANY ISSUES RESOURCE COMMITMENT Classification of products/technology Technology Transfer Monitoring Company Export Compliance Manual (formal) Company Personnel Awareness (training/education) Integration of Compliance with acquisitions Subsidiary Compliance Pro-act with governing licensing agencies Automation of the Compliance Program

14. Company Compliance “Today” Corporate Education (company awareness-global) Corporate Training (operational personnel) Roll out Formal Compliance Program Form Compliance Committee Automate Compliance Checks Wherever Possible