Export Controls: Don’t Be Left in the Dark
By Sarah Reynolds
There are many small and medium-sized exporters within the international logistics industry who are unfamiliar with the controls placed on exports. Some are not aware that controls exist or that exports are even regulated by the U.S. government.
The Export Administration Regulations, administered and enforced by the Bureau of Industry and Security, should be the foundation on which all compliance programs are based. Unfortunately, there are exporters within the industry, who have never heard of the EAR, have no knowledge of the required recordkeeping standards, and are not aware of items that are controlled by the Commerce Control List, not to mention denied party screening. Controls on exports are increasing and being enforced at a record rate. Training should no longer be considered a luxury for an organization but a pre-requisite in order to do business within the international logistics industry.
This lack of experience or knowledge of the regulations places not only U.S. security but also exporters in jeopardy. If exporters are not informed and don’t take the necessary steps to protect themselves from fines and penalties and possible loss of exporting privileges, they may find themselves faced with a huge financial impact to their organization and its employees. In the end, all are affected.
It is the responsibility of every exporter, small or large, to ensure that they are in full compliance with the Export Administration Regulations and any other U.S. government agencies’ regulations specific to their supply chain, and that the personnel involved within their supply chain process have been properly trained and kept informed of the changes of this ever-evolving industry.
Due to the complexity of the regulations, this task could be a full-time job for an individual; for larger organizations, it may even require an entire compliance team. Unfortunately, the majority of smaller and medium-sized companies are not placing enough focus on developing a compliance program, and with the current state of the economy; this will surely be placed on the back burner, which could prove detrimental to their long-term prospects.
When it comes to government regulations it is common practice in this industry to believe that “since we have never had a problem before” all is well and being done correctly. As long as the shipment arrives timely and for a competitive price, in the mind of the exporter, it is considered a successful transaction. Experienced exporters know this not to be true as the U.S. government can go as far back as 5 years when investigating regulatory breaches, and shipments that were once thought a success could be investigated for possible non-compliance issues long after they were concluded.
Being in compliance with U.S. regulations should not be an afterthought, and the regulations should be the foundation on which any international export supply chain is based and managed in order to be truly a successful and profitable part of any organization. With this focus and understanding, the export department will be doing its part to demonstrate supervision, control, and due diligence within the international supply chain to protect the company, the people, and the nation.
Sarah Reynolds has over 20 years experience in the international logistics industry specializing in supply chain management to difficult and problematic countries worldwide. Her career has included work for SDV USA, USF Worldwide, Kuehne & Nagel, UTI, and BDP. She currently is Senior Consultant and Trainer at American River International’s corporate office in New York. Sarah can be reached at (631) 396-6831 or sreynolds@americanriverintl.com. Additional information can also be obtained from American River International’s Web sites, www.americanriverintl.com and www.theworldacademy.com.
