Export Compliance For Businesses – Risk Management And Technology

By Author: Linqs Inc
Total Articles: 59
Comment this article

New exporters face a hard time through export compliance for more than one reason. Apparently, a small business plays catch up with resources and barely affords to pull the compliance or export clearance requirements. The strictly administered laws control transfer of goods, services, or technology to all destinations of the world. Let’s understand how businesses can avoid risks and utilize tech-based solutions for export compliance.

Not just protecting national security and economic interests, the export control of technologies, data, and information also prevent wrongful acquisition. As for now, the exporter or USPPI (US Principal in Interest) has to investigate on their part and provide all important information for export clearance.

This multidisciplinary framework of export compliance sets a daunting stage for exporters. Though taken in a positive sense to uphold US foreign policy and national security interests, it can prove overwhelming new and genuine exporters. Right from a compliance program to training to reporting of violations can instill the ideal practices for an exporter and its employees. And, ...
... it doesn’t come with an assured guarantee that it shall occur overnight.

For compliance risk management, exporter companies or organizations should consider the following six basic steps:

Classify the products

How to know whether a product is eligible for export or not? Exporters should classify their product with the ECCN (Export Control Classification Number) by exploring across EAR (Export Administration Regulations) and discover the reasons for control. The five-character ECCN code can be searched through BIS (Bureau of Industry & Security) website. A product that doesn’t have ECCN will fall under EAR99 and are not subject to control by any governmental agency.

Export license for destination country

Embargoes on foreign destinations or countries like Iraq and Syria prevent any transfer of goods or technological information or services. Exporters must refer to the Commerce Country Chart to check if they require an export license for the same items.

Screen procedure

Exporters need to screen customers, partners, dealers, traders, etc. to identify if they are engaged in any illegal activities, such drug trafficking, terrorism, proliferation of weapons for mass destruction, etc. The latest export controls software helps exporters/employees to screen all entities within a short frame of time. It offers a superior mechanism to make operations quick and easy.

Red flags

A product can be put to good or bad use, but how to know that? Exporters are responsible for the product and they have the right to know how it will be used by the customer or procurement companies. Identifying the red flags is crucial here, especially if there are suspicions.

Awareness of deemed exports

Not just goods, technical data and blueprints come under export restrictions. Exporters should check for deemed exports by following points 1 and 4.

Document compliance

A simple and easy solution may come forth, which is to give it to a freight forwarder, but it’s never ideal. Outsourcing liabilities doesn’t fare good on response. Document compliance, even with the involvement of third-parties, is important. Not doing the same may invite penalties.

About The Author:-

Linqs Inc writes about export control laws and regulations administered and implemented by the US governmental agencies. He explains briefly about export control and various compliance measures. He elaborates on the need of a consultant for export compliance that small business operation struggle with implementation.

Linqs software helps you with Anti Money Laundering (AML) and KYC screening of customers or trading partners before entering a deal with them.