Export Compliance Program Seventh Element: Handling Violations and Taking Action

July 29, 2021

(The Exporting Source) by Blake Gill *

As we come to the last of functional elements of an Export Compliance Program (ECP), we arrive upon one of the dreaded topics of how to handle violations and take action. This element must be clear and concise on how an organization should handle any potential violations and the inevitable investigation.

Handling violations is not often included in an ECP or considered by management. Some management teams believe that because an export team exists, and a compliance program is in place that it will prevent violations from occurring. Let’s set the tone straight: this is NOT reality in any company. The truth is that your company is expected to have violations. Early detection and quick reactions will be the key to reducing exposure. All the previously discussed elements will aid in early detection of violations, and time is of the essence.

An internal and external reporting process should exist for reporting all noncompliance issues. A specific investigation process should exist to quickly follow up on the activities that trigger a response. Disciplinary actions should be specifically annotated within your ECP and should be enforced. A lackadaisical response to a potential violation will create a nonchalant attitude towards compliance within the organization.

Support from executive management will be extremely critical at this point. A safe environment must exist so that there is open communication and a culture that fosters compliance can grow. Employees must feel safe and encouraged to discuss violations so proper action can be taken. Organizations are given a medium by the Bureau of Industry and Security (BIS) to disclose potential violations.

As mentioned earlier, companies are expected to have violations. It is a sign that your program is working as intended since a violation has been identified and reported. The violation handling is then put to test with a voluntary self-disclosure. This disclosure will include how the organization will resolve the violations and how preventative actions will be put in place to prevent the same violation from occurring. It is encouraged to seek external professional support, such as an attorney or trade consultant, to assist with the disclosure and corrective action process.

I want to encourage any readers that may feel worried about violations; most disclosures will not face significant penalty. The government is there to support your business and work with you to build a better compliance program. Don’t look at them as the enemy; they are your friend in the process and want to see your business grow and be prosperous.

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* Blake Gill is an experienced International Trade Compliance professional with a demonstrated history of work in the technology industry. He has many years of experience working with export control, customer screening and item classification over a wide variety of products. Additionally, Blake has performed the duties of Empowered Official at multiple international companies.