|Our Mission: The District Export Councils contribute leadership and international trade expertise to complement the U.S. Commercial Service’s export promotion efforts through counseling businesses on the exporting process and conducting trade education and community outreach.|
|Principles of an Effective Export Compliance Program|
|Wednesday, June 13 2012 13:15|
By: Margaret Jones Hopson
Jackson Walker L.L.P.
(Second of a 3 Part Series)
Introduction: In the first installment of this series, we discussed that U.S. export controls, specifically those found in the Export Administration Regulations (EAR), apply not only to companies dealing internationally in military, high tech or otherwise sensitive goods and technology, but to activities that are wholly domestic and not readily recognized as international, as well.
We outlined ways in which the EAR applies to their activities. We also discussed that the consequences for violating the EAR are stiff: criminal and administrative penalties of up to $250,000 or twice the value of the transaction and a fine of up to one million dollars and/or up to 20 years in prison, respectively. For both civil and criminal violations, a denial of export privileges may result.
In this installment, we will discuss the elements of an effective EAR compliance program. The final installment will instruct exporters on how to deal with potential violations of the EAR.
Principles of an Effective Export Compliance Program
Not only can an effective compliance program help an exporter to avoid violating the EAR, such a compliance program is entitled to great weight in the mitigation of a violation of the EAR. The BIS employs 9 guiding principles to assess effectiveness of an export compliance program.
Conclusion: The far reaching nature of the export control laws in the U.S. generally, and the many ways in which an unwary exporter can violate the EAR, specifically, can be overwhelming. However, an effective compliance program can assist an exporter in complying with the EAR. Such a compliance program can be surprisingly modest in cost. In the final installment of this series, we will discuss what to do if you discover potential EAR violations.
Coming July 2012:
Third of a 3 Part Series – What to Do If You Discover You May Have Violated the EAR