5 practical trade compliance steps that will save you time and money in global business


Compliance steps save time and money

Compliance steps save time and money

We have all seen the email, the “If we don’t get this item to this country NOW it is going to throw the whole project off!”

Then comes the slew of emails back and forth, and back again, regarding how the company is going to actually get the equipment moved, often including input from lawyers, about the steps needed to put the proper licenses in place.

Frequently, government export authorizations or licenses, taking weeks or months to secure, are the hold-up.

It doesn’t need to be this way.

Too often, companies train employees on trade compliance as if it is an annoying bundle of red tape that will inevitably hold up operations. Employees are taught that trade compliance is a hurdle they are forced to jump through once they are ready to get a job done.

This viewpoint is enforced by complicated policies replete with legal language that offer no hint to the reader about why he or she should care.

In reality, trade compliance does not have to hold up operations. The following steps will help you integrate trade compliance into everyday operational decisions. Trade compliance cannot be an afterthought that no one thinks about until it is too late.

By then, you will have people and equipment sitting around unused, costing you time and money.

1. Focus on why export control laws are in place.

Too often, export control laws are explained in legalese, citing regulation numbers and government agency definitions. While the law itself is important, it is also important to understand the big picture.

Are these laws in place just to make doing business more difficult for your company? Despite what some people might think, the answer is no.

These laws serve important purposes in national and international security.

Don’t lose sight of that and don’t let your operational personnel lose sight of it.

Policies that people believe in, where they can see the purpose behind them, are most likely to be followed instead of ignored.

2. Make export compliance part of the first steps in a project instead of the last.

Trade compliance should be part of a project discussion at the initial stages. It should be an item on the meeting minutes when projects are first being organized. While it is not always possible to anticipate export control issues, most of the time it is.

If the person responsible for exporting or re-exporting equipment is involved in project discussions early on, your company is less likely to be stuck with items sitting in a warehouse, waiting for the right licenses while operational personnel at the receiving end sit idle.

This saves your company time and money.

You can achieve this easily by training all of your operational personnel in the basics of trade compliance. This does not have to be an in-depth training program. It is as simple as making operational personnel aware of the questions they should be asking:

What is being shipped to where, and do we have the proper license in place?

Consider how much more efficient your operations would be if all personnel involved in a project knew to ask those questions. While those ultimately responsible for compliance will need to have a bigger window into the process, getting everyone on board goes a long way to improving your operational efficiency.

The thing is, everyone knows that they will have to manage trade compliance issues eventually. Make it something people are used to considering up front.

3. Make compliance with export control restrictions simple.

Above I boiled down export compliance into a sentence that operational personnel should be asking: what is being shipped to where and do we have the proper license in place? The truth behind this idea is that not everyone needs to know all the details.

If you are able to identify what is important to your audience and then remove the extraneous information, you are more likely to hold listeners’ attention. The chances are then better that the information that is being provided will stick.

Of course, it is easier to have everyone go through the same trade compliance course that includes the same information, relevant or not to that individual. It takes time to identify who needs to know what, but, once you do, the reward is that your training is actually effective.

4. Encourage communication between export compliance personnel and operational personnel.

No matter how hard you try to make it simple (there is always a catch!), the fact is that export control laws are complex and can be fraught with nuance. When you create “general” rules to make things simple, you must pair it with an open line of communication to raise questions when something complicated or out of the ordinary comes up.

You can facilitate two-way communication by starting the conversation. A monthly or quarterly email containing a few tips or updates from you to operational personnel goes far.

People will associate your name with export compliance so that when a question pops into their head, the thought “I should email …” accompanies it.

If you start getting more questions than you have time to answer (a good problem to have), designate someone to respond to questions when you are unable to. Questions are often repeated, and concern matters that can often be resolved with a simple records search.

Employing an individual, besides yourself – or whatever busy trade compliance officer is in charge of the program – who can quickly answer questions from operational personnel goes far in a world where business is often being done 24-hours a day.

You can also create a unique email address (e.g. tradecompliance@) that multiple people can access.

If someone in your company was asked about trade compliance, would your name pop into his or her head as the go-to-person?

5. Don’t shoot the messenger

No one likes to be the bearer of bad news. “Don’t shoot the messenger” is a phrase because it is a common instinct. You should strive for the opposite in your trade compliance program. Don’t be the last to know.

An “open door” policy that rewards people for coming forward with information, even if it is a kindly worded thank-you email, helps you to make sure that you know what is going on.

Yes, the consequences for trade and export law violations are severe and can amount to very bad news, but unless you are aware of mistakes being made, it is impossible to fix the gaps or misunderstandings within your compliance program.

Encourage people to report on every suspected violation, and follow up with the person who reported on the outcome. You will often find that operational personnel are overly careful, that they see potential violations where there are none.

By encouraging people to double-check with you, via reporting suspected violations, you are educating your personnel on what is and is not a violation and gaining a clearer picture of how trade compliance actually works within your company.

Which of these steps could save your business the most time and money? Anything else that would be worth mentioning?

Disclaimer: The opinions expressed in this article are those of the contributing author, and do not necessarily reflect those of the Forum for International Trade Training.

About the author

Author: Michael Volkov

Michael Volkov is the CEO of The Volkov Law Group, a boutique law firm that specializes in ethics and compliance programs addressing trade, sanctions, anti-corruption, and anti-money laundering laws and regulations. Mr. Volkov can be reached at mvolkov@volkovlaw.com. His law firm’s website is www.volkovlaw.com, and his blog Corruption, Crime & Compliance is located at www.corruptioncrimecompliance.com.

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