ACTIONS
Objective:
To provide clear guidance to company employees regarding notification, escalation, and corrective action for times when there are problems or suspected problems with export transactions.
Procedure:
An essential part of a company’s export management and compliance program are procedures which provide clear guidance to all employees, including contract employees, concerning what actions to take in the event of suspected incidents of export-related noncompliance.
An effective notification program for reporting suspected incidents of export-related noncompliance includes:
1. Management that is fully committed to conducting business in compliance with the letter and spirit of the law and committed to fostering a safe environment for employees who raise questions or concerns about compliance;
2. Internal and external reporting procedures for suspected violations of noncompliance; and
3. Corrective and disciplinary actions for noncompliance with company compliance policies and procedures and incidents contrary to U.S. export law.
Management Commitment
For any notification program to work, employees, including contract employees, must feel that management at all levels of the organization is truly committed to export compliance. This commitment must be effectively communicated, often and broadly. Employees should not only be encouraged to report suspected export violations but also know that management views reporting suspected violations as an integral part of the company’s compliance program and an important part of the responsibility and duty of each employee’s job. Management must convey to employees that in addition to
knowing the legal and ethical responsibilities that apply to their jobs, it is an employee’s duty to speak up if they are unsure about the proper course of action or need advice, if they believe another employee is doing, or may be about to do, something that violates the company’s compliance program, or if they believe that they have personally been
involved in noncompliant activity. Management must instill within all employees the personal commitment to do the right thing.
The most important thing Management can do to foster a culture of compliance within their employees is to lead by example. Employees must have a high level of assurance that export compliance is management’s overriding concern in all export decisions and will never be sacrificed for profit or personal gain. It is critical that employees know that they will be free from retribution or retaliation from other employees or management if in good faith they raise questions or concerns about compliance. In fact, employees who have both the conscience and confidence to step forward when actions are suspect are one of the best defenses a company has to ensure that it does not break any export compliance laws. Management should also ensure that employees they supervise have adequate training, knowledge, and resources to comply with the company’s compliance program. They are responsible for monitoring compliance of the employees they supervise,
enforcing compliance standards consistently, and reporting incidents of noncompliance to the proper management level.
It should be made part of performance plans, performance evaluations, and the promotion process, that employees voice concerns when they see a possible problem. Additionally, employees who speak up should be lauded, perhaps in a monthly company compliance newsletter, even if the problem reported resulted in no violation, but only in a change in procedures to expedite compliance and business.
Internal and External Reporting Procedures
As part of a company’s export management and compliance program, all employees should be given clear instructions on where suspected incidents of export-related noncompliance should be reported. Suspected incidents can be reported in a variety of places in a company including an export compliance office, legal department, or ethics hotline. The office or individual(s) assigned the responsibility for taking reports should be publicly identified. The name, room number, telephone number, and e-mail address of the notification office or person(s) should be made available to all employees, especially those involved in export-related activities. In addition, companies may consider
providing a mechanism or venue through which employees can make reports
anonymously and can be assured that those reports will be confidential and shared on a ‘need-to-know’ basis.
Written procedures should be developed explaining the internal procedures to be followed by the appropriate company personnel when a suspected incident of export
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▪ investigative report documentation requirements, making it clear to employees that it is in their and the company’s best interests to strictly adhere to documentation
requirements;
▪ management notification procedures if noncompliance is discovered; ▪ documentation requirements of remedial action taken;
▪ follow-up reporting procedures to management regarding corrective actions taken; and
▪ notification procedures to the reporting employee regarding the outcome of the investigation.
Written procedures should also be developed establishing procedures for reporting violations to the U.S. government. The Commerce Department has a Voluntary Self- Disclosure program under which the disclosure will be considered as a mitigating factor in an export enforcement investigation. However, in order to be considered “voluntary,” disclosures must be made prior to the time the U.S. Government obtains knowledge of either the same or substantially similar information from another source and initiates an investigation or inquiry. In addition, the voluntary disclosure must be made with the full knowledge and authorization of senior company management. To make a voluntary disclosure, contact the Director of BIS’s Office of Export Enforcement, as per Section 764.5(c)(7). To maximize mitigation, also disclose what corrective action is being taken and any other mitigating factors, including how you have implemented all nine key EMCP elements included herein.
Corrective and Disciplinary Actions
Every problem is also a learning opportunity to enhance your company’s EMCP and its business and compliance processes; therefore, be sure to incorporate lessons learned into your training and awareness programs.
Since your EMCP should make it clear in every section that employees are both responsible and accountable, companies should also consider developing a graduated scale of disciplinary action for employees who do not comply with the company’s export policies and procedures, and should also define disciplinary actions to be taken in the event of export violations or negligence. Disciplinary actions should be considered on a case-by-case basis depending upon the seriousness of the incident, and can range from oral/written reprimands to termination. When warranted, the use of administrative or financial penalties is probably one of the most effective tools a company has to warn other employees that noncompliance will not be tolerated.
COMPLIANCE GUIDELINES SUMMARY
Having an Export Management and Compliance Program will help prevent our U.S.- origin dual-use goods and technologies from being used against us, and in that regard, the jobs of all involved with exporting have a national security component to them.
A well-implemented EMCP that include all nine elements described here, will help companies to thrive and will serve as a mitigating factor in an enforcement proceeding. Use the following checklist to evaluate your EMCP:
EMCP Self-evaluation Checklist
► Are management commitment and managerial involvement clearly apparent? ► Are sufficient resources, including qualified and dedicated employees, committed to support the compliance program?
► Are there established mechanisms through which employees feel safe and comfortable reporting concerns regarding noncompliance activity?
► Do you have established compliance policies, procedures, and standards of conduct for export operations and personnel?
► Is there a sufficient level of written operational guidance to ensure day-to-day compliance?
► Are there effective lines of communication throughout export operations? ► Has your organization built compliance partnerships and applied programs globally?
► Does your organization provide training to all employees on export-compliance policies and specialized training on policies and procedures for those directly involved in exports and the export-compliance program?
► Have you implemented checks and safeguards, including screening of parties and activities, throughout all export processes?
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► Do you continuously evaluate and modify your program to enhance prevention and detection of noncompliance risks?
Investing in an EMCP that is well integrated into your current business processes can lend predictability, consistency, and security to your export transactions, as you ask the right questions and undertake the right analyses regarding parties to your transactions and uses of your items. A well-implemented EMCP, including detailed step-by-step
procedures tailored to the specifics of your business, can also lend sustainability and longevity to your business, as well as the business partners you’ve included in the process, especially given the recent heightened penalties for export violations. Your partners at the Office of Exporter Services in BIS are waiting to assist you in developing your EMCP; contact us today at (202) 482-0062, or through our “Compliance Program Assistance” link on our BIS website (www.bis.doc.gov).
To have your draft EMCP reviewed by BIS, please send it (electronically and/or hard copy) to:
Tom Andrukonis, Director
Export Management and Compliance Division Office of Exporter Services
Bureau of Industry and Security U.S. Department of Commerce
1401 Constitution Ave, N.W., Room 2099 Washington, D.C. 20230
Telephone: (202) 482-6393