Screening remains a critical element in any truly comprehensive global trade compliance
program. Based on recent estimates there
are now more than 400 lists globally including a wide variety of debarred,
denied, embargoed, prohibited, proscribed, restricted and sanctioned entities. That number continues to grow. Doing business with an entity on one of these
lists has resulted and may result in significant fines and penalties. You and your organization can also end-up on
one of these lists.
For those who have the false
impression that the US Government (USG) Consolidated Screening List (CSL) is
one-stop shopping when it comes to screening, there is no doubt it is not. If all you check is the
CSL you are in no way covering all the lists you need to consider. The reality is with faulty or incomplete due
diligence you put your organization and yourself at risk.
Material CSL shortfalls include a limited “Fuzzy
Name Search” capability with a simple “ON” or “OFF” function and no inherent search
record keeping capability. The CSL currently
only covers 11 USG lists representing about 3% of the lists around the world. Further, according to State Department and
savvy industry counterparts including seasoned lawyers, the System for Award
Management (SAM), another USG online search tool that
consolidates what used to be included on the Excluded Parties List System, is also
essential to screen against. The SAM and
hundreds of other lists relevant to international transactions are not included
in the CSL.
WARNINGS: CSL use alone without
other much more comprehensive screening tools places organizations and
individuals at great risk. Remember: The US Principal Party in Interest (USPPI)
is responsible when transacting with an entity on one or more of these
lists. There are at least several real
world cases where the USPPI incorrectly assumed the CSL covered all the relevant
bases, when in fact it did not.
FOOD FOR THOUGHT: Are you screening
all the lists that need to be checked and at key points? Do you rely on a no-cost partial solution
that can result and has resulted in violations?
Is your organization at more risk in this area than it should be? What do you need to do to ensure adequate
screening list compliance to minimize exposure, liability and risk in a much
invigorated enforcement environment?
Suggestions,
comments, inputs regarding the above narrative are encouraged and welcome. Please contact John Priecko, 703-895-1110,
jpriecko@comcast.net.
Tuesday, April 12, 2016
Monday, March 14, 2016
Suffering Regulatory Fatigue?
Anyone want to make a guess at how
many Export Control Reform (ECR) related Federal Register notices have been
published?
How many pages of Federal Register notices does that equate to?
Or, as a result of ECR, how many pages have been added to the Export Administration Regulations and International Traffic in Arms Regulations?
Perhaps more importantly, what’s the impact and implications regarding the above on you, your organization and the compliance program?
Are things clearer, easier and simpler than they were before ECR?
Realistically, if you are a small or medium size enterprise (SME) with limited expertise and resources how do you keep up with what’s happening and ensure you and your organization are complying with all the changes?
What advice would you provide others?
How many pages of Federal Register notices does that equate to?
Or, as a result of ECR, how many pages have been added to the Export Administration Regulations and International Traffic in Arms Regulations?
Perhaps more importantly, what’s the impact and implications regarding the above on you, your organization and the compliance program?
Are things clearer, easier and simpler than they were before ECR?
Realistically, if you are a small or medium size enterprise (SME) with limited expertise and resources how do you keep up with what’s happening and ensure you and your organization are complying with all the changes?
What advice would you provide others?
Monday, February 15, 2016
A Past Due Level Playing Field
The only association listed
on the Directorate of Defense Trade Controls (DDTC) website other than
government and multi-lateral organizations is the Society for International
Affairs (SIA). Years ago the SIA became
DDTC’s unofficial but de facto outreach, education and training arm.
Much has changed and other “just as valid” associations now exist and provide quality/value-added to practitioners on a wide-range of fronts. Is this current situation fair to these other credible associations such as the: American Association of Exporters and Importers (AAEI), International Compliance Professionals Association, National Council on International Trade Development, Association of Trade Compliance Professionals, National Defense Industrial Association, to name but a few? Some like AAEI existed long before SIA.
Trade and professional associations and their members are very much a part of our community and contribute a great deal to regulatory compliance. This is especially so in filling DDTC’s gaps in outreach, education and training. Isn’t excluding all in favor of just one patently unfair? Isn’t it time to provide equitable treatment to other relevant associations? At a minimum shouldn’t they be listed on the DDTC website under OTHER WEB SITES or perhaps even a separate category?
So, why is the SIA still favored, listed and promoted by DDTC above all the others? Does pushing one and punishing the others communicate a fair and level playing field for a qualified list of “at least as relevant” associations? Is it appropriate, beneficial and healthy professionally to exclude and ignore the others?
Further, with the long-standing DDTC-SIA relationship aren’t there conflict of interest issues? SIA has unfettered access to DDTC speakers. DDTC also plays a significant role coordinating and crafting SIA program agendas. Do other associations have such distinct advantages to the degree SIA does?
What do you think?
Much has changed and other “just as valid” associations now exist and provide quality/value-added to practitioners on a wide-range of fronts. Is this current situation fair to these other credible associations such as the: American Association of Exporters and Importers (AAEI), International Compliance Professionals Association, National Council on International Trade Development, Association of Trade Compliance Professionals, National Defense Industrial Association, to name but a few? Some like AAEI existed long before SIA.
Trade and professional associations and their members are very much a part of our community and contribute a great deal to regulatory compliance. This is especially so in filling DDTC’s gaps in outreach, education and training. Isn’t excluding all in favor of just one patently unfair? Isn’t it time to provide equitable treatment to other relevant associations? At a minimum shouldn’t they be listed on the DDTC website under OTHER WEB SITES or perhaps even a separate category?
So, why is the SIA still favored, listed and promoted by DDTC above all the others? Does pushing one and punishing the others communicate a fair and level playing field for a qualified list of “at least as relevant” associations? Is it appropriate, beneficial and healthy professionally to exclude and ignore the others?
Further, with the long-standing DDTC-SIA relationship aren’t there conflict of interest issues? SIA has unfettered access to DDTC speakers. DDTC also plays a significant role coordinating and crafting SIA program agendas. Do other associations have such distinct advantages to the degree SIA does?
What do you think?
Monday, February 1, 2016
DDTC 2015 Consent Agreements - What's up?
Anyone wondering what happened to 2015
DDTC Consent Agreements?
2015 is the first year since 1996 with no US Department of State Consent Agreements.
Over the Last 20 years DDTC has averaged just under 2 ½ Consent Agreements per year. The range is 0-5/year.
So why nothing in 2015? Is it because:
- Industry is doing a better job complying?
2015 is the first year since 1996 with no US Department of State Consent Agreements.
Over the Last 20 years DDTC has averaged just under 2 ½ Consent Agreements per year. The range is 0-5/year.
So why nothing in 2015? Is it because:
- Industry is doing a better job complying?
-
DDTC is overwhelmed as a result of Export Control Reform?
-
Consent Agreements take many years to work through?
-
There are too many ongoing cases and not enough resources to close them
out?
-
Does the number indicate DDTC is shifting gears taking a different approach?
-
There is less emphasis on compliance and enforcement?
-
It’s just an anomaly?
-
Some other reason…?
It’s also worth noting big doesn’t
mean better or more compliant. Over the
last 20 years repeat offenders (i.e. those with multiple DDTC settlements)
include: Boeing (4), Raytheon (3),
Lockheed Martin (3) and ITT (2). Those 4
organizations represent 26% of the total number of DDTC 1996-2016 settlements
(47).
Food for Thought/Discussion (pick one):
-
What’s the impact on you or your organization when there are no DDTC Consent
Agreements in a given year?
-
What can be taken away from DDTC Consent Agreements that impacts your
organization’s compliance program?
- What’s
the deterrent effect of DDTC Consent Agreements on you, your organization and
industry
License Exception STA - A Continuing Saga…
For those of you upset by and/or
frustrated over US Government (USG) insistence on using Export Administration
Regulations (EAR) license exception Strategic Trade Authorization (STA), expect
more of the same.
This appears to be the only case where the USG forces an EAR License Exception down industry’s throat. This does not happen on the State Department side. Using or not using an International Traffic in Arms Regulations exemption is at the discretion of the registrant.
Industry still complains about STA saying it’s too complex and an administrative burden. In the view of many, getting a license proves easier and less problematic. The Bureau of Industry and Security (BIS) points the finger at industry indicating those who don’t use STA and can, are uneducated, uniformed or simply don’t understand. Yet, BIS has amended the exception 16 times.
Another consideration is workload. If you use STA, the exposure, liability and risk is all yours. If you submit a license, effort and decision making shift to BIS. One consequence and reality of Export Control Reform (ECR) are shifting responsibilities from the USG to industry. Either way, resources are a factor.
It’s also worth reminding practitioners BIS routinely audits exporters who use STA. In this context the word “audit” is not politically correct; thus, BIS prefers “review.” Call it what you will, but they ask for proof it’s being used properly.
Further, STA use is a metric measuring ECR success. STA use is low and has been since its inception. There is no doubt BIS is on a quest to increase the numbers, thus a reinvigorated effort to do just that.
As always there are at least two sides to the story; however, at the end of the day, aren’t trade compliance professionals adults who can and should make their own well-informed business decisions on using or not using an exception or exemption?
In the spirit of an open/honest dialogue what do you think?
This appears to be the only case where the USG forces an EAR License Exception down industry’s throat. This does not happen on the State Department side. Using or not using an International Traffic in Arms Regulations exemption is at the discretion of the registrant.
Industry still complains about STA saying it’s too complex and an administrative burden. In the view of many, getting a license proves easier and less problematic. The Bureau of Industry and Security (BIS) points the finger at industry indicating those who don’t use STA and can, are uneducated, uniformed or simply don’t understand. Yet, BIS has amended the exception 16 times.
Another consideration is workload. If you use STA, the exposure, liability and risk is all yours. If you submit a license, effort and decision making shift to BIS. One consequence and reality of Export Control Reform (ECR) are shifting responsibilities from the USG to industry. Either way, resources are a factor.
It’s also worth reminding practitioners BIS routinely audits exporters who use STA. In this context the word “audit” is not politically correct; thus, BIS prefers “review.” Call it what you will, but they ask for proof it’s being used properly.
Further, STA use is a metric measuring ECR success. STA use is low and has been since its inception. There is no doubt BIS is on a quest to increase the numbers, thus a reinvigorated effort to do just that.
As always there are at least two sides to the story; however, at the end of the day, aren’t trade compliance professionals adults who can and should make their own well-informed business decisions on using or not using an exception or exemption?
In the spirit of an open/honest dialogue what do you think?
Tuesday, August 18, 2015
September Arizona Programs - Valuable Education and Training Opportunities on US Export Controls
If you are not fully
up-to-speed on Export Control Reform and what's currently going on in
Washington DC, check out the three unique, hands-on, practical application and
case-study focused September outreach, education and training programs in
Arizona.
The full one-day "Evolving Export Controls, Compliance and Enforcement" program is on Tuesday, September 15, in Tucson; and Thursday, September 17, in Phoenix in cooperation with the Arizona Technology Council (AZTC).
The full one-day "Evolving Export Controls, Compliance and Enforcement" program is on Tuesday, September 15, in Tucson; and Thursday, September 17, in Phoenix in cooperation with the Arizona Technology Council (AZTC).
AZTC and the University of
Phoenix will co-host a free program for academic institutions, labs and
federally funded research and development centers September 16 in Phoenix.
Detailed flyers for all three programs
including agendas, speakers, registration and discounts are available online.
-
For the Tuesday program in Tucson go to:
-
For the Wednesday afternoon program go to:
-
For the Thursday program in Phoenix go to:
The Tuesday and Wednesday programs
include breakfast, lunch and end-of-day hosted networking reception as well as
no cost 1-hour sessions with the presenters.
If you have questions,
please contact the AZTC: In Tucson at 520-382-3281, tucson@aztechcouncil.org;
or in Phoenix, at 602-343-8324, events@aztechcouncil.org.
Friday, January 9, 2015
Certification Proliferation Continues - More of the Same - More to Follow…
Here
we go again as another provider joins the self-created, self-administered, self-endorsed,
for-profit certification bandwagon using self-approved and self-determined standards.
No one should be surprised, but every
trade compliance professional needs to be concerned and fully informed. Do not get sucked in!
The latest comes from The World Academy with their International Trade Compliance Certification (ITCC) for Exporters and a separate ITCC for Importers. With a one-day course and $395, you too can be a certified expert and add an acronym after your name. Is that absurd or what?
The latest comes from The World Academy with their International Trade Compliance Certification (ITCC) for Exporters and a separate ITCC for Importers. With a one-day course and $395, you too can be a certified expert and add an acronym after your name. Is that absurd or what?
Invalid
certifications that do not meet true certification program standards with no
publicized, credible, external, independent, knowledgeable, unbiased,
third-party validation and testing by any reputable authority with no conflicts
of interest are becoming the norm.
Part
of the game is setting-up an organization or front company that sounds academic
and then creating bogus certifications to go along with it. Watch out for key words like global, international, academy and
institute and then look for the self-proclaimed certifications to follow. Keys here are revenue generation and creating
a steady money-making stream.
This
field is a lucrative marketplace as some practitioners have misplaced value in paying
money (in some cases lots of it) for adding an acronym or multiple acronyms
after their name. None of which makes a
credible expert. Additionally, some of
these for-profit vendors are collaborating and cross-marketing to maximize their
return on investment and not step on each other’s toes.
This
ongoing proliferation is a timely reminder about thorough due diligence anytime
you outsource anything. Do not spend a
penny unless and until you are absolutely certain you have all the relevant
facts to make the best and most informed decision possible. Invalid certifications are Red Flags for
savvy professionals.
There
are many out there (a growing number in fact) who are more than happy to knowingly
and willfully make false, misleading and unsubstantiated claims and
misrepresentations by any and all means, happily take your money and provide a
deficient product that creates an illusion of expertise and experience.
If
you really want to improve your position, reputation, skills and proven value
in the compliance marketplace and open more doors in your upward mobility, get
a law degree and by all means, make every effort to get what’s really
important--more real world experience.
FOOD
FOR THOUGHT/QUESTIONS: Is one invalid
certification any better or worse than another?
What impact do bogus certifications have on the trade compliance
community? Why not start your own and
share in the profits?
And
finally… JANE DOE, International Trade Expert, CCLS®, CES®,
CUSECO®, ECoP®, ITCC® and CITCP®. Are you impressed, depressed or it just
doesn’t matter?
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