Speaker 1: Hello, and welcome to the world of export compliance.

Speaker 2: In this video, we're going to introduce you to the eight elements of an effective export compliance program, or ECP for short. BIS developed these elements to assist organizations in complying with the EAR.

Speaker 1: But before we jump into the eight elements, here are a few tips to keep in mind. One size does not fit all. Your ECP should be tailored to your organization. What works for one company might not work for another.

Speaker 2: Some factors to consider include the size of the company, the number or volume of exports, and the types of items to be exported or re-exported, the end use or the end user, and the geographic location of your customers.

Speaker 1: These elements were developed specifically for compliance with the EAR.

Speaker 2: If your company exports items or services that fall under the jurisdiction of other agencies, for example, the Department of Treasury or the State Department, you'll need to ensure that your ECP reflects consideration of those regulations.

Speaker 1: Lastly, BIS goes into greater detail into each element in the export compliance guidelines, which are available for download on the BIS website. To download the guidelines, hover your mouse over the compliance and training tab and click on export management and compliance from the drop-down menu. The export compliance guidelines can be found under ECP resources on the lower right side of the web page.

Speaker 2: Now on to the eight elements. The first element is management commitment, the most important factor in having an effective ECP.

Speaker 1: Creating a corporate culture of compliance without management commitment is like trying to push a heavy rock up a hill, very difficult, and you'll never have a successful compliance program. Management can demonstrate its support for compliance by having all employees read and sign a management commitment statement annually. Management should provide sufficient resources to include the budget, staffing, and the tools necessary to run an effective compliance program.

Speaker 2: Management needs to support training for all employees and maintain active involvement and remember that compliance is a process driven from the top.

Speaker 1: The second element is risk assessment. The goal of this element is to identify preventable risk and build safeguards to minimize vulnerabilities. Risk assessment or risk in exporting primarily comes from three areas, the exported item, your company's operations, and your potential customers. You need to know your item and you need to know your ECCN which stands for export control classification number. Your ECCN is important because it is used to determine BIS export licensing requirement. A company needs to know its exporting procedures and processes very well and personnel need to be well trained in those procedures to minimize risk. It's important to know your customers. Screening your customers against the consolidated screen list and requesting an end use statement can help mitigate your company's exporting risk.

Speaker 2: The third element is export authorization. Understanding and implementing element three is critically important to export compliance. It involves determining agency jurisdiction, item classification, making license determinations, and developing customer screening procedures. Element number four is record keeping. BIS record keeping requirements are found in part 762 of the EAR. Parties are required to keep export related records for five years from the latest of certain activities. Such as the date of export, re-export, trans-shipment, diversion, or termination of the transaction. BIS is one of several federal agencies with record keeping requirements for export transactions. So make sure that you are in compliance with record keeping requirements of any other agencies that have jurisdiction over your transactions.

Speaker 1: Element number five is training. Training should be job specific so that staff members understand their responsibilities. For example, the sales department might need to be aware of which countries would require export licenses. The shipping department might need to be aware of export clearance requirements. And never pass up an opportunity to provide training for your employees. Formal training can be supplemented with posters, videos, newsletters, and company handbooks. Element six is audits. Build an audit mechanism into your compliance program. The purpose of the audit is to identify compliance deficiencies, risk, and inconsistencies between your company's stated exporting policies and its actual practices. If resources allow, consider using a third party auditor for an unbiased evaluation of your organization's compliance program.

Speaker 2: The seventh element is the handling of export violations and taking corrective actions. Ensure that employees have clear guidance concerning what actions needs to take place, including who to contact within the organization when a potential violation is identified. Early detection and fast response are key to minimizing exposure if violations of the EAR may have occurred. If you believe that you need to report the potential violation to BIS, please refer to part 764 of the EAR for instructions on how to submit a voluntary self-disclosure.

Speaker 1: Element number eight is to build and maintain your export compliance manual. First and foremost, if you haven't been directed by senior management to create a formal export compliance manual, get that support and buy-in and get management to support the establishment of an export compliance team consisting of experts from different parts of your organization. The BIS Export Management and Compliance Division will review your ECP free of charge. We encourage you to take advantage of this free service. For information on how to submit your ECP, hover your mouse over the Compliance and Training tab on the BIS website and click on Export Management and Compliance from the drop-down menu. Click on Submit Your ECP under Contact Us.

Speaker 2: As always, the Bureau of Industry and Security is here to help. If you have any questions along the way, feel free to contact any of the BIS Compliance Specialists listed on the webpage or the Office of Exporter Services. Thank you for watching this video and happy exporting.