Is having software solutions for export compliance processes such as denied and restricted party screening, ECCN and USML validation, and license determination enough? Is it enough to have documented procedures in place? And what about trained and knowledgeable staff?
Taken individually, the answer would be “maybe.” In their entirety, however, the answer would be a “qualified yes.” Why the condition? Because there is an important element missing.
The often-overlooked element is having a dedicated person (or team of people) on staff to champion and drive export compliance across all parts and levels of the company. Having this person makes a world of difference. And here are five reasons why.
- Keeps export compliance at the forefront of competing corporate priorities
The highest echelons of corporate management typically have to deal with everything from strategizing ways to overcome barriers to success in the business marketplace, to deciding which vendor should supply them with computer equipment for staff.
With so many ideas, issues, and plans constantly being raised, debated, and decided on, it is easy to become lost among the myriad competing priorities.
As long as there is management approval (and there should be, because compliance with domestic and international regulations should be part of the corporate doctrine), the compliance champion will be able to facilitate a stronger action-oriented understanding of the importance of compliance and increase the program’s success.
The major and over-riding benefit is the smooth running of the company on the right side of the law
- Strengthens Risk Management
Risks manifest themselves in a variety of ways. These could be an inadvertent shipment to a sanctioned country or a denied party. It could be in the form of business associates, partners, and resellers (to name a few) both at home and abroad. A new hire. A new acquisition or a merger.
The compliance champion understands these risks, takes step to identify potential gaps, and acts to close them.
- Spreads the word throughout the organization
Many companies have good intentions when they set policy at the top, but the message might not be adequately communicated to rank-and-file staff. This is especially important when the organization is spread out across multiple floors of a building or locations across the world. The major role of the compliance champion is to make sure the essence of the policy is understood and followed operationally throughout the organization. This includes documented procedures, training, and refresher training.
- Centralizes the compliance effort
The best way for mission critical work to be effective is to centralize the chain of command. This is as true for a small or medium sized operation as it is for a multinational conglomerate. With the compliance champion at the helm, they can monitor and manage the work with team members. Of course, in order to be competitively positioned, it’s also best practice to have an effective export, financial, and trade compliance solution in place.
- Helps ensure uninterrupted supply chain
Compliance violations leads to shipment delays, penalties, and unhappy customers. The compliance champion helps to keep the supply chain moving smoothly, and the corporate bottom line healthy.
The Net Effect
With the current compliance landscape, it makes sense that companies have a compliance champion in place, and to make sure they have one at all times. There have been instances where an organization’s compliance program stuttered and faltered after their compliance champion left and was not replaced. Given that many governments around the world are increasingly tightening enforcement to more strongly prevent companies from doing business with denied parties or sanctioned countries, a compliance champion is more than just a nice-to-have—it’s a must-have.
