Elements of a Successful Export Compliance Program

By Beatriz R. Poloney, Free Trade Agreement Specialist, Illinois SBDC International Trade Center

Historically, U.S. Customs and import/export companies have had to ensure they are compliant with the relevant trade laws. However, as national security concerns continue, so has the need for companies to have complete and accurate documentation. The penalties have been increasing, as has enforcement. This has raised the awareness for companies to have import/export compliance programs within their company to ensure appropriate procedures and training. In this article, we focus on having a good compliance program related to exporting.

The essential element to initiate a good “Export Compliance Program” is the commitment at the management level to follow the Foreign Trade Regulation (FTR) in order to ensure compliance and avoid expensive penalties. Civil penalties alone can be $250,000 or twice the value
of the transaction.

Some of the vital elements for an effective Export Compliance Program are:

  1. Implementation of operational policies;
  2. Development of training and awareness to facilitate and support those policies;
  3. Implementation of written procedures, centralized with one person or department, with the primary responsibility to answer to Customs Border Protection (CBP);
  4. Ongoing training of the technical aspects of the company’s products and services so the appropriate staff remain up to date;
  5. Ongoing training regarding U.S. export regulations and import regulations of importing countries;
  6. Ongoing review of the company’s compliance program to ensure it remains up to date.

Having a strong export compliance program does not have to be overly onerous. It can pay great dividends in avoiding problems in the future. The Illinois SBDC International Trade Center can provide assistance and risk assessments of companies that trade internationally.

For more information, please contact Beatriz R. Poloney at (309) 677-3075 or bpoloney@bradley.edu