8 Elements of an Effective Export Compliance Program

Global logistics is no longer the realm of only large multinational organizations — worldwide connectivity has also ushered small and medium-sized businesses into the international arena. As such, export compliance is a consideration for supply chain managers in companies of all sizes, and an effective export compliance program (ECP) is a necessity for many.

What is an ECP?

Globally operated supply chains are increasingly complex, making it difficult for supply chain decision-makers to not only determine which export regulations apply to their companies but also to ensure their operations are always in compliance with government regulations. Oftentimes, those in violation are caught completely off guard when cited, unaware they’re involved in any wrongdoing. ECPs establish guidelines to help logistics leaders avoid that shock — and the associated penalties and fines — as well as reduce violation risks by ensuring they have the right compliance procedures in place for their businesses.

Potential noncompliance ramifications are considerable and should serve as motivation for developing ECPs. According to the U.S. Department of Commerce Bureau of Industry and Security (BIS), “Often times, the costs of the violations go beyond penalties and fines. Additional costs include hefty legal fees, damage to one’s reputation, delays in the export process, and loss of future business.” Putting the right safeguards in place can help mitigate noncompliance risks, helping savvy supply chain experts and their employees keep global operations on track.

Elements of an effective ECP

Through an effective ECP, organizational leaders develop, implement, and maintain concrete written operational policies and processes. A team effort is crucial to ECP success because logistics decision-makers must secure top-level buy-in throughout their organizations. This helps ensure compliance by allowing all employees, including managers, to evaluate and take action so “what should happen, does happen and what shouldn’t happen doesn’t happen … on a daily basis.” According to the BIS guidelines, in effective ECPs, supply chain managers should:

1. Commit to compliance, starting from the top and including every employee.
2. Assess, identify, and define the preventable risks their firms face and how to mitigate them.
3. Determine which compliance regulations they are subject to and whether they need to take action — such as obtaining a license to export — to gain and maintain compliance.
4. Create guidelines and processes to help determine which records they need to keep and for how long.
5. Implement an ongoing companywide training program to ensure every staff member is aware of his or her role in maintaining compliance.
6. Conduct regular product-level and organization-wide audits to evaluate how effective their compliance measures are.
7. Design a well-developed plan for discovering, handling, and correcting export violations.
8. Assign an export compliance team whose members develop an export compliance manual.

Part of ensuring logistics leaders are meeting regulation standards includes having visibility into the entire supply chain. Without the proper insights into all aspects — from purchasing certain materials to having the proper licensing and understanding current trade laws — risks can slip through the cracks much easier.

Visibility is crucial to compliance

The need for supply chain visibility might seem obvious to maintaining compliance, but that doesn’t make it any less critical. Supply chain leaders require visibility to carry out most elements of an effective ECP, including threat and risk identification and mitigation, audits, export violation corrections, and more. To achieve export compliance through an ECP or otherwise and to gain greater visibility, smart logistics executives are leveraging technology. Today’s real-time logistics data delivery solutions help these professionals better anticipate and respond to changing environments, including the ever-evolving regulatory landscape. In addition, partnering with third-party experts can help supply chain decision-makers leverage the latest technology for better visibility as well as stay on top of the latest regulations and compliance standards. This can help ensure they are not only operating efficiently but also wisely and within regulation requirements.

[cta]Companies like nVision Global — with its comprehensive suite of web-based logistics tools, its global establishment, and its expertise in international regulations — are well-equipped to help you manage your worldwide supply chain. Our experts also offer consulting services, including transportation provider and vendor compliance. To find out how to take strategic control of your supply chain, visit nvisionglobal.com or call 770.474.4122.[/cta]