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

2. CURRENT CLIMATE MANY REGULATORY CHANGES
(You have to Keep Up With Them)
“EXPORT CONTROL REFORM”
* Singular licensing Agency
* Singular Control List
* Singular Enforcement Agency
* Singular IT Data Base
Targeted Enforcement (Collaborative Effort)
Ambiguous Regulations/Convoluted
Coordinate and Communicate – A MUST

3. WHATZ HAPPENEN
Criminalization of corporate wrongdoing
Dramatically increased Penalties
High scrutiny on corporate ethics
Accountability for directors and individual managers
Evolving enforcement initiatives & tools
Global Compliance a MUST
REFORM????????

4. CHANGING ENVIRONMENT HIGHER SCRUTINY = NEW COMPLIANCE CULTURE
Post 9/11 – Corporate Governance
Laws & Regulations constantly shifting
- Foreign policy (“as the world turns”)
Global Trends
- Nonproliferation (“the know standard”) – U.S. “EPCI” – Regime “catch all”
- Anticorruption Laws (FCPA)
- Greater Regime participation – Mexico/Singapore/Malaysia/Taiwan
- Transhipment “Best Practices”
- Compliance and Enforcement issues of U.S. Corp’s foreign affiliates
Enforcement Initiatives
- Spot audits – AES data/license data/PLC & PSV/safeguard trips/ web search
New Investigatory Tools
- Global harmonization of resources
- Intelligence sharing
- Automation of export reporting (enforcement targeting)
- Tenfold increase in Penalties
HIGHER SCRUTINY = NEW COMPLIANCE CULTURE
Speaker Gary

5. What can happen if it goes wrong?
Fines (CONGRESS PASSED 10/03/07)
$50k TO $250k IEEPA
Negative Publicity
Denial Export Privileges
Disruption of Business
Jail Time

6. 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THIS WAS WITHDRAWN BY BIS

7. The “Corporate Challenge” How to get 100% of employees & their managers to work to the same standards of integrity (and tell you if they see problems)?

8. 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

9. Starting point: 7 elements of an effective (beyond paper) program
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
A global working group was appointed in June 2002 to lead the development of the Code of Conduct and the associated change management, communications and training plans.
Working group consisted of representatives from the LoBs, SHEQ, HR, IM, corporate relations, risk management and the legal function.
Focus Groups will take place during March.
Feedback will be incorporated into the implementation programme and plans for each LoB and function.
no “double standard”
non-retaliation
performance alignment
avoid discretionary authority to managers likely to violate
promotions & new hires
continuous risk assessment & improvement
review & amend program after breaches occur

10. 5-Step Implementation Process*
1. Compliance risk assessment & prioritisation
2. Compliance Planning
5. Management Review & Certification
3. Implementation
& Operation
4. Measurement, Evaluation & Corrective Action
*Integrated into existing risk management processes

11. Export Compliance Decisions
1. USE COMMON SENSE!!
Everybody Has it??
2. Document Decisions
Demonstrate your D2
“Due Diligence”
3. Abide by the Exporters Cardinal Rule
WHEN IN
IT OUT, NOT:
IT OUT 11

12. EVERYONE'S
ACCOUNTABLE