How many companies have been exporting for years and lack an export compliance program?
A U.S. security equipment manufacturer was recently fined $140,000 for illegally exporting products, such as stun guns, police batons, handcuffs, and pepper spray, to countries in Latin America, Africa, and the Middle East.
The Bureau of Industry and Security (BIS) found that the company didn’t have an export compliance program (ECP) in place. Without an ECP, it “‘lacked procedures to determine the classification’ of its exports under the EAR and the license requirements for those goods.” The company also lacked the required shipping records with freight forwarders and foreign customers as required in part 762 of the EAR (Recordkeeping).
Due to the absence of an export compliance program the BIS found that the manufacturer “demonstrated unfamiliarity with basic export control concepts and practices.”
All of these problems could have been avoided had the exporter implemented an export compliance program. There are eight key elements of an effective Export Compliance Program. If you have questions about executing your own program contact Mohawk Global Trade Advisors.