Export Compliance Manual

An Effective Compliance Manual Can Help You Avoid Costly Fines And Penalties.

Imagine this: An export control officer contacts your company and asks to see a copy of your ITAR compliance manual. They have identified a suspected violation and would like to see documentation of your export compliance procedures.

What do you say to the principal investigator? What do you do as an exporter?

Like many organizations, you may reply with the name of the person in charge of ITAR compliance, hoping they will have the answers and recordkeeping to keep your export license intact while avoiding harsh penalties and fines.

Believe it or not, this scenario happens more often than you think. While disciplinary action often falls to the supervisor in charge of export compliance,  the fact is that everyone in your company is responsible for ensuring that your company’s export practices comply with ITAR and EAR.

From workers in the warehouse to the company’s CEO, every member of your team needs a clear understanding of how to remain compliant to avoid fines and criminal penalities.

The best way to ensure everyone is on the same page is to create a comprehensive, high quality compliance manual as part of your compliance program.

Why Is Export Compliance So Important For My Company?

Export compliance is the ability to abide by the export control set forth by the United States government. These controls are regulations and laws that restrict and regulate the transfer of technologies, services, and information to foreign nationals outside of the U.S.

U.S. government agencies, like the Department of Commerce, Office of Foreign Assets Control, and the Department of State, all have specific exporting guidelines to regulate and prohibit items sent outside of the United States of America.

There are several reasons why your company must always meet the standard set by these agencies for export compliance.

Prevents Costly Fines And Penalties

Exporting controlled items and controlled technology requires extensive knowledge of trade regulations to remain compliant. Red flags arise when your company does things like trade with a banned country or export an item destined for an inappropriate end-use.

Aside from criminal penalties, a lack of export control compliance can lead to hefty fines and legal costs.

Not only that, your business could lose exporting rights altogether.

Ensures National Security

Countries must prevent technology, information, and critical products from reaching the wrong end-users in foreign countries. Products with a military application, controlled information, or with the potential to be used against the United States are especially sensitive.

The United States uses sanctions and embargoes as a tool to enforce laws, apply political and economic pressure, and to restrict trade with specific countries and groups.

Exporting to a sanctioned country or restricted party could lead to loss of export privileges. Not only that, exporting to unapproved foreign persons is a risk to national security.

Protects Companies And Countries

A strong export compliance program will prevent danger for your company, collaborators, and country by:

  • Allowing You To Screen New Vendors
  • Keeping Your Company Up To Date On New And Changing Export Regulations
  • Ensuring Accurate Recordkeeping For All Export Transactions
  • Preventing Export Control Issues

A good export compliance manual will encapsulate all of your compliance protocols and act as a centrally located resource for your entire team to reference at any time.

What Should You Include In An Export Compliance Manual?

There is no one-size-fits-all approach to creating an export compliance manual. Each company will require unique content depending on their products and situation.

However, a practical export compliance manual needs a high level of detail and clear instructions accessible to all employees. The goal is to educate and enhance your team’s understanding of export compliance protocols.

Because export compliance is the responsibility of your entire company, you must include all of the relevant information to prevent potential violations.

Here is what your company’s export compliance manual needs to give your team the ability to remain ITAR compliant.

Examples Of What Your Compliance Manual Needs  Why It’s Important 
Personnel Guidelines And Clear Responsibilities
  • Help Employees Know Their Specific Compliance Responsibilities.
  • Communicate How They Impact The Exportation Process.
Export Control Regulations Guide
  • With So Many Embargoed Countries, Exemptions, And An Extensive Commerce Control List, Your Manual Needs To Define All Relevant Regulations Clearly.
  • It Should Also Outline the Company’s Classification Process for New and Existing Items.
Recordkeeping Protocol
  • Documentation Is Crucial For Remaining Compliant.
  • Your Manual Should Clearly Outline Recordkeeping Best Practices, Including What Documents to Retain and For How Long.
Processes For Partner Government Agencies
  • Depending On The Nature Of Your Business, You Will Deal With Different U.S. Government Agencies.
  • A Compliance Manual Should Focus On The Specific Government Agencies Your Company Deals With.
  • Your Manual Should Also Include Relevant References With Applicability To Your Exports
    • United States Munitions List (USML)
    • Commerce Control List (CCL)
    • Denied Parties List
    • Country Chart
  • Include Contact Information For Empowered Officials and Trade Compliance Officers.
Disclosures, Penalties, And Fines Violating the ITAR and EAR, Comes With A Price. Disclose All Penalties, Fees, And Expected Disciplinary Action For Failing To Follow Protocol.

You may disclose this information during a meeting, but information retention in large chunks is difficult. A compliance manual allows you and your employees to refer back to the document time and time again.

Your compliance manual should have a clear, detailed table of contents to help your users easily navigate, as well as resources for technical assistance and regulatory support.

Why Does My Company Need An Export Compliance Manual?

Your company needs an export compliance manual to ensure your entire team is on the same page for remaining compliant while exporting. Providing information through this manual will also make an external audit or other investigation easy to comply with.

Export control laws can be very tricky. But avoiding possible violations doesn’t have to be.

Implementing a documented, well-written export compliance manual will:

  • Prove That Your Company Understands – And Complies With – U.S. Import And Export Regulations, As Well As Foreign Policy.
  • Demonstrate That You Have Implemented Export Compliance Throughout Your Organization.
  • Provide Concrete Evidence Of Your Company’s Commitment To Export Compliance.
  • Assure Government Agencies That You Are Taking U.S. Export Control Seriously.

There’s no need to start with a blank piece of paper! The experts at Export Solutions have worked with hundreds of companies to create practical, effective export compliance manuals. We can do the same for you.

Export Compliance Manual FAQs

What is ITAR compliance?
ITAR Compliance means that an exporter or manufacturer of specific hardware (defense articles) needs to meet certain requirements and operate in a certain manner consistent with those requirements to be allowed to participate in the supply chain involved with these items.

The basic elements of a compliance program include documentation in formal written procedures, awareness training for applicable personnel, maintaining proper records, auditing the process to ensure that it is being implemented, and investigating and reporting suspected violations. The end result is to enable your company to:

  1. Determine the jurisdiction and classification of products
  2. Control access to export-controlled items and related documentation
  3. Ensure that business transactions have proper legal authorization before exporting or importing
  4. Control products throughout the complete life cycle process

How do I find out if my company is trade compliant?
The way to ensure that your company is compliant is to have an experienced trade compliance professional or team of professionals in your company develop and maintain a trade compliance program.

An alternative is to have an outside company come in and evaluate your operations, with the end goal of providing a plan to become compliant. However, you will still need to have at least one individual designated with responsibility for maintaining the program.

How do I become ITAR compliant?
The process for becoming compliant with the ITAR starts with registering your company with the Directorate of Defense Trade Controls of the US State Department.

Then you will establish a compliance program that includes evidence of commitment to compliance from senior management, documentation in formal written procedures, awareness training for applicable personnel, maintaining proper records, auditing the process to ensure that it is being implemented, and investigating and reporting suspected violations.