Compliance Audits

Without An Exports Controls Audit Program, You Could Be Violating The Law

Companies who operate in international exports need to know all the applicable laws to avoid violating regulatory requirements and applicable laws.

Can you confidently answer this question: Is your company compliant? If you have any doubt, it may be time for an internal audit.

If your company is facing an export compliance audit, you need a team of experts on your side to help you avoid penalties and create an audit action plan to solve any noncompliance issues.

What Is Export Compliance?

A requirement sanctioned by the U.S. Department of Commerce, export compliance is designed to uphold the Export Administration Regulations, or EAR.

ITAR and EAR regulate the export of dual-use items, which have commercial and military applications. The compliance requirements must be met for export-related items.

The CCL, or Commerce Control List, uses a five-character alphanumeric code called Export Control Classification Number to categorize each item.

If your company seems noncompliant with EAR, regulators will request an export compliance audit.

What is An Export Compliance Audit?

Much like an IRS audit of your company’s taxes, an export compliance audit is an efficient method to see whether or not a company’s internal export controls are correct and sufficient.

The audit identifies vulnerabilities and limitations within your current system, which allows you to correct them before an audit is required.

Export compliance auditing typically occurs in one of two ways:

  • Self-Initiated: You initiate the audit on your own to improve compliance
  • Directed Audit: A government agency directs your company to conduct an audit and provide them with audit reports.

Regardless of which types of audit you require, you need compliance auditors trained to find your non-compliance areas and fix them before receiving a violation.

Why Are Export Compliance Audits Important?

Audit is a word no company ever wants to hear. While they may seem inconvenient, compliance audits serve many purposes.

Benefit Of Export Compliance Audit How It Helps Your Company
Helps Improve Your Company’s Compliance Policies With gaps uncovered, you can make improvements by taking corrective actions and preventive measures.
Identify Internal Compliance Gaps Within Business Processes This means your management systems can identify risk areas and correct compliance policies before reporting to regulatory agencies.
Provide Risk Management And Help Compliance For Multiple Frameworks Audits will ensure you meet current regulatory policies and prepare for any new laws or policies that are put into effect.
Saves Your Company Time, Money, And Prevents Legal Trouble Noncompliance will easily cause costly trouble for your company, especially in the area of mandatory laws.

While it is possible to conduct an internal audit on your own, it’s best to hire a professional auditing company with experts who are well versed in the most up-to-date methodology of compliance requirements.

What Can I Expect From Export Compliance Audit Programs?

Not all export compliance audit programs are created equal.

To ensure your audit functions as it should, you’ll need a professional auditing company to craft the right audit plan for your needs.

Here is what you should expect when hiring compliance audit services.

  • Extensive Knowledge of Regulatory Requirements And Updated Corporate Compliance Procedures
  • A Strong, Documented Approach To Internal Audits And Self-Assessments
  • Ability To Provide A Third-Party Audit To Be Regularly Conducted
  • Ensure A Comprehensive Process For Identifying Non-Compliances And Implementing Corrective Actions
  • Be Focused On Continual Improvement Through Revised Compliance Code Of Conduct

To ensure your audit plan is successful, you will need to prepare extensively.

How Can I Prepare For An Export Audit?

Once you’ve set a date for your formal audit with a compliance officer, you’ll need to prepare. Companies shouldn’t rush to complete the compliance audit.

Your auditing company will help you gather everything you need to pass the audit, as well as help ensure your organization doesn’t face penalties or lose the chance to fix the identified compliance gaps.

Here is how you can prepare for a compliance audit.

  1. Review Previous Audits: Follow up on how your company has previously performed during export audits and compare current practices to ensure changes have been made.
  2. Prepare The Required Documents: Documents should define how your company complies with the standards and reflect actual compliance practices.
  3. Conduct An Internal Audit And Risk Assessment: By doing a self-assessment, internal auditors will identify gaps and improvement opportunities.
  4. Define A Clear Audit Procedure: Your procedure should build audit trains or records that act as proof of compliance through security policies and processes.
  5. Administer Compliance Training: Staff or employees must be trained on internal controls so they understand the procedures and policies necessary to remain compliant. Failure to train will result in EAR violations.
  6. Stay Updated On Regulatory Compliance Changes: Keep track of new and updated regulations, as well as violations done by direct competitors. This will help you examine your systems and identify improvement areas.

Once the official audit results are ready, the audit committee will submit a report to the relevant regulatory agencies and give you a copy.

No matter the size of your business, you must ensure your company meets the relevant compliance framework requirements to benefit from the enhanced security posture that comes from being compliant.

Trust Export Solutions To Help You With Your Compliance Audits

To pass your audit, you need an audit plan that will help identify and correct violations.

If your company is under a directed audit from a government agency, Export Solutions can help ensure your company needs every benchmark to meet compliance requirements.

  • Approved To Conduct Directed Audits By DDTC For Clients With Past ITAR Violations
  • Well-Versed In Both ITAR And EAR Regulations
  • Offer A Comprehensive, Objective Approach To Each Audit
  • Document findings In A Thorough  Report Shared With You, Your Management System, And The Relevant Government Agency
  • Review Corrective Actions And Ensure Their Implementation

Let us help you improve with an audit or export compliance assessment today.

Contact Us for an evaluation of your needs and recommendations on how we can help.

Import Export Compliance Audit FAQs

What is export trade compliance?
Export control regulations are rules and regulations created by the U.S. government that applies to the export of certain goods and information. These regulations are placed to protect national security and protect the global marketplace.

Does an export compliance program need to be certified?
No, there is no certification process for export compliance. Export compliance is the responsibility of the individual company and must be developed and implemented by themselves.

It is recommended that an export control professional internal to the company be utilized or that a third party outside the company be brought in to evaluate and monitor your program.

How does the U.S. government enforce its export control laws?
Enforcement rests primarily with three different agencies of the U.S. government. They are:

  • The U.S. Department of State: Directorate of Defense Trade Controls (DDTC). This agency is responsible for the administration and enforcement of the International Traffic in Arms Regulations (ITAR).
  • The U.S. Department of Commerce: Bureau of Industry and Security (BIS). This agency is responsible for the administration and enforcement of the Export Administration Regulations (EAR).
  • The U.S. Department of the Treasury: Office of Foreign Assets Control (OFAC). This agency is responsible for administering and enforcing a variety of economic and trade sanctions against certain countries and individuals.