Export reform efforts began this spring, when the Obama Administration issued orders to consolidate export regulation. The reforms will include:
- a single control list,
- a single licensing agency,
- a single primary enforcement coordination agency, and
- a single information technology system.
The government plan for implementing these reforms is a comprehensive, three phase strategy. The first phase is underway, and includes steps that can be taken without legislation. All of this appears to be good news for manufacturers. Our contacts in Washington, D.C. confirm that the first phase is in full swing; however a timeline for the next two phases is difficult to estimate.
While these changes begin to take effect, it is important for companies to remain vigilant about export compliance. Exporters must track changes to the regulations in order to avoid violations.
What does the government require exporters to track to avoid the risk of penalties?
Take a look at the list of factors issued by The Bureau of Industry and Security, the arm of the U.S. department of commerce charged with the development, implementation and interpretation of U.S. export control policy, and you can easily see the need for an export compliance program. Without implementation of company-wide procedure, it is far too easy for violations to occur. Among the many factors:
- Exporter Type
- Nature of Item Exported
- Source of Item Exported
- Item Sensitivity, Dual-Use Risk and Restrictions
- Distribution Points
- Exporter Size
- Customer Type
- Use of Product by Customer
- Location of Customers
- Subsequent Transfers/Re-exports
- Exporter/Customer Relationships
- Order Processing System
- U.S. Person Participation in support activities by which a person facilitates an export, re-export or transfer that will assist proliferation activities described in the U.S. export laws and regulations.
Starting/Enhancing your export compliance program
An export compliance program can protect your company from export violations. Your program should govern all aspects of exporting products. The backbone of the program should be an export compliance manual that outlines the company’s policies and commitment to following trade laws and regulations. To learn more about starting a compliance program, visit the Department of Commerce web site. If you have questions about export compliance, please contact the Manufacturing Team at Bingham McHale.