The BIS recently published a list of seven new “best practices” to help companies improve their export trade compliance. Specifically, these best practices are designed to help avoid the diversion of dual-use items at international transshipment points (or “hubs”).
Here are the seven best practices.
- Pay heightened attention to BIS’s Red Flag Indicators and communicate red flag concerns internally.
- Seek to utilize only those trade facilitators and freight forwarders that administer sound export control management and compliance programs that include transshipment trade best practices.
- Obtain detailed information on the credentials of foreign customers to assess diversion risk.
- For routed transactions, establish and maintain a trusted relationship with parties to mitigate risks.
- Communicate export control classification and destination information to end-users and consignees on government and commercial export documentation.
- Provide the ECCN or the EAR99 classification to freight forwarders for all export transactions and report the classifications in the Automated Export System (AES), if applicable.
- Use information technology to the maximum extent feasible to augment “know your customer” and other due-diligence measures in combating the threats of diversion and increase confidence that shipments will reach authorized end-users for authorized end-uses.
Also, I wonder if some of these suggestions would better be characterized as “the bare minimum” instead of “best practices”? For example: If your company is not already paying attention to red flag indicators, then it’s likely you are way below what most would consider a “best practice” level of compliance.
I appreciate BIS’s intentions here, but I also question the usefulness of some of these suggestions for exporters. To me, this list underscores the need for companies to hire a seasoned trade compliance professional to recommend the real best practices that are being followed by their competitors and colleagues today.
Tom Reynolds is the Vice President of Operations for Export Solutions, a consultancy firm which specializes in ITAR and EAR compliance.