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EXPORTER Powered By Docstoc
					               WESCCON
                EXPORT
              COMPLIANCE
              AWARENE$$




Presented by : Paul Divecchio –DiVecchio & Associate
               Phone: (617) 513-3230, Fax: (508) 393-3645
               Email: pauldivec@earthlink.net
GLOSSARY OF TERMS

BAHSTON    =      BOSTON
CUBER       =     CUBA
CAH        =      CAR
VIZER CARD =      VISA CARD
I-DEAR      =     IDEA
 WINNAH     =     WINNER (PATRIOTS)
          (sorry –update: CHEATERS)
Objective of this Seminar


 Scare the H*LL out of you !!!!!!
          OBJECTIVE
*   Create Marketing Opportunity
         1. Be unique
         2. Be Educated
          3. Be Proactive


*   Risk Avoidance
          1. No Violations
          2. No Negative Publicity
          3. No Bad Attitude
CULPABILITY?
    OR
OPPORTUNITY!
FREIGHT FORWARDER’S ROLE
   First source of information for new exporters

   Last line of defense - documentation & prohibitions

   Attitude and knowledge of forwarding staff - can be a
    marketing advantage or liability


                 CREDIBILITY !
ACCOUNTABILITY
Knowledge includes not only actual
knowledge of an event, but also an
awareness of “high probability”* of its
occurrence.
                                    Not this!
So … use all available information.
Seek more information if you have
suspicions.
*The US government would like to revise its
regulations to say that you have “knowledge” of an
event if a reasonable exporter would consider the
event “more likely than not”.
     THIS WAS WITHDRAWN BY BIS – REALLY?
What You Know!
Stated & Implied
       Export Compliance Decisions
1. USE COMMON SENSE!!
  Everybody Has it??


2. Document Decisions
  Demonstrate your D2
  “Due Diligence”

3. Abide by the Exporters Cardinal Rule


   WHEN IN                IT OUT, NOT:

   WHEN IN                   IT OUT
          CURRENT CLIMATE
   Mandatory AES Compromised (DHS vs.
    Census)
   Patriot Act Penalty Increase - $10K to
    $50K (per charge per violation-creative)
   PRC – “Catch All”-conventional military?
   Enforcement Oversight - AGGRESSIVE
   Industry Compliance Initiative – A MUST
              Office of Export
              Enforcement
              Regions
                          Chicago                Boston
San Jose
                                              New
                                              York

     Irvine                         Washington



                 Dallas
                                        Ft. Lauderdale
      Methods of Enforcement

   Confidential and Industry Sources
   Intelligence Sources
   Safeguards Verification Program
   Visa Application Review Program
   Export Document Review
    ( SED/AES, Airway Bills, Bills of
    Lading)
   Public Sources - Newspapers, Trade
    Publications, Internet
What can happen if it goes wrong?

   Fines (CONGRESS PASSED 10/03/07)
         $50k TO $250k IEEPA
   Negative Publicity
   Denial Export Privileges
   Disruption of Business
   Jail Time
Some enforcement cases
-Freight Forwarders- FOIA
  Under Value Pending: 56 forwarder-Carrier
  Ship to RPL cases
  Embargoes          Negative Publicity:
  Anti-boycott   - BIS home page
  Wrong EIN      - FOIA
  False Stmt AES - Index of documents
                  - Export violations
  Record keeping
  Early Release
  Bad AES Info
Exporter - Forwarder Relationship

The Party with the “principal interest” has
the primary responsibility for export
compliance.
               HOWEVER
The selection/accountability of the
forwarder is CRITICAL


          PERCEPTION IS REALITY!!!!!!
   Exporter’s Responsibility

• Issue a proper POA (Power-of-Attorney)

• Provide the Forwarder with:
   COMPLETE AND ACCURATE INFORMATION
   - Description of Product(s)
   - License Information
   - Correct Values

             < Coordinate and Cooperate >
   Forwarder’s Responsibility



• When in Doubt - Check it Out!

              NOT


• When in Doubt - ship it out!

                - Hold the Shipment -
          FORWARDER –
          RESPONSIBILITY
          OPPORTUNITY
   COMPLIANCE OFFICER
   EDUCATE PERSONNEL
   COMPLIANCE REVIEW PROCESS
   FORMAL PROCEDURES
 ASSIST CUSTOMERS

   NETWORK/SEMINARS
 KEY EXPORT COMPLIANCE RISKS
WRONG JURISDICTION (Boeing –L3)
CLASSIFICATION (NONE/WRONG)
GLOBAL DENIED PARTY REVIEWS
EPCI END USE CHECKS?
SLOPPY PAPERWORK
EMBARGOES – DIVERSIONS
ANTIBOYCOTT COMPLIANCE
       + (EXPORTER):
TECHNICAL DATA TRANSFER
   EMPLOYEES
  OUTSOURCE
  CUSTOMER’S DATA
   SPONSOR   LETTERS FOR VISAS
                 U.S. Customs
•   Major Discrepancies:
    - Failure to file SED/AES
    - No notification on Bill of Lading when
      SED/AES not required
    - No generic product description on
      SED/AES
    - Mishandling of State Dept. shipments
      by the Freight Forwarder
    - “old” or invalid licensing information
    - No licensing information
    - Values on SED/AES “UNDERVALUED”
    - Suspicious transaction! (Notations,
      markings, packaging etc…)
Enforcement Initiatives

      Forwarder Negligence - Impact on
                Exporter?

• Enhanced scrutiny of all export and reexport
  transactions

• Increased risk of negative exposure

• May be held accountable for the mistakes of others
  (e.g., freight forwarders)

•            LOSS of BUSINE$$$$$$
                  U.S. Customs
• Enhanced focus on the activities of
Freight Forwarders and Carriers…….
• Partnership with CBP:
    - Failure = “closer scrutiny”
    - Effort = “benefit of the doubt”
       Case study –       freight forwarder

Exporter/forwarder Relationships–facts:
   U.S. company exports Titanium in raw and processed
    form worldwide
   Exporter uses Freight Forwarders to prepare export
    documents and expedite shipments
   Exporter has no licensing information on the products
   Freight Forwarder receives no Power of Attorney from
    exporter
   Freight Forwarder decides goods are de-controlled
         Why was the Freight Forwarder fined by BIS?
A SEIZED SHIPMENT…
   What happened…….
    - AES info conveyed by exporter’s invoice
    - Multiple ECCNs – No Custom’s codes
        (NLR does not mean EAR99)
    - Poorly trained forwarder ops staff
    - Forwarder did not follow instructions
      (sched B)
    - Multiple known end users – only (1) AES
    entry

OTHER THAN THAT, IT WAS OKAY!!!!!!!
  Exporter - Forwarder Relationship
• The Exporter must hold the freight forwarder
 accountable.
• Memo to all forwarders (including those nominated
 by the overseas buyer “routed”) insisting on
 the following:
  - No changes/document substitution without prior authority
  - Forwarder to review export documents for:
        - Completeness and accuracy (HOLD)
  - Affirmation that a copy of the “completed” SED
    (or AES print-out if requested) will be returned

• Forwarder to acknowledge receipt and affirm
compliance & Indemnify exporter, if at fault !
            KNOW
            YOUR CUSTOMER


 SALES   & OPs COLLABORATE
 PROFILE   THE CUSTOMER
 CUSTOMER    AWARENESS
    - Seminars – Consults-Hand Hold
  FORWARDER COMPLIANCE
  “TODAY”
Corporate Commitment to “engage”
Compliance Assessment to be conducted
Identified Compliance Focal Points
Formalize Policies/Procedures
Training for operations/sales
    FORWARDER COMPLIANCE
    “TOMORROW”
• Seminars/workshops for existing/potential cust.

• Expand Network with related organizations
• Offer Export Compliance Assistance (guidance)
• Enhance Website to include a “Compliance”
• “News Briefs related to export compliance”
• Form Compliance Committee
• Automate Compliance Checks Wherever Possible
          < Maintain a Robust Program >
.

				
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