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Essential Elements of an Effective Export Management and Compliance Program

If your company exports controlled goods or engages in activities controlled under Australia’s export legislation, an effective Export Management and Compliance Program (EMCP) is essential to ensuring compliance and preventing inadvertent violations.

Your EMCP serves two key purposes. First, it is a key tool for ensuring that employees understand your company’s compliance policy and the importance of complying with export controls. It helps to educate employees and assist them with understanding the relevant laws and regulations. Second, the EMCP serves as a tool to help your company manage, organise and document export related activities. It outlines the requirements for your day-to-day operations and serves as a basis for your internal compliance audits. Aside from staff education and creating guidelines for auditing the effectiveness of your controls, the key objectives of an EMCP are to:

  • help your staff detect and react to questions about the legitimacy of a customer order or export transaction,
  • provide sufficient resources to employees to assess risk, and
  • provide guidance on how to handle suspected violations.

 An effective EMCP will have the following key elements:

1. A corporate policy. A corporate policy on export controls that is issued by senior management and communicated to all employees. Employees should be required to acknowledge their understanding of the policy in writing.

2. Ongoing risk analysis. The EMCP should include risk analysis at the transaction level and provide procedures for the screening and evaluation of each export transaction. It should also include clear guidelines for how to escalate concerns and should recognize employees for their diligence in assessing risk. Placing an emphasis on risk analysis will help to reduce the risk of violations, while recognizing employee efforts to assess risk and prevent violations will help to create a culture of compliance.

3. Accessible policies and procedures. The EMCP’s policies and procedures should be accessible to all employees. It should be made clear who in the organisational structure is responsible for performing each part of the risk analysis process and who is ultimately responsible for the overall effectiveness of the compliance program. Procedures should also outline how advice should be sought on transactions where risk analysis has identified potential issues. Providing these resources to staff will help them to perform their export control responsibilities more consistently and effectively.

4. Regular training. Adequate training should be part of every EMCP. The training should be tailored to the function of the individual and to their role in helping to minimise risk and ensure compliance. Training should be conducted regularly to keep employees aware of their responsibilities and updated on legislative or procedural changes. Clear guidelines about which employees should attend training, the type of training required and how to record training attendance should be documented as part of your EMCP.

5. Emphasis on recordkeeping. Easy retrieval of records related to export transactions is essential to your internal audit program. A formal recordkeeping program, with defined filing formats, guidance of the length of time to keep records, and a clear archiving protocol is an important element of your EMCP.

6. Internal and external audits. Conducting regular audits of your export transactions can help to identify gaps in your processes and highlight areas requiring improvement. An audit program should include both a focused audit of high-risk areas as well as a random audit to get an overall picture of how your compliance program is performing.

7. Reporting violations and remedial activities. You EMCP should have a mechanism for employees to report suspected violations internally. It should also have a mechanism for making voluntary disclosures to the Australian government and for informing your customers or suppliers where required. Remedial activities should seek to determine the root cause of the violation and work quickly to create or amend procedures that will prevent future violations from occurring.

Australian companies exporting controlled articles should have a comprehensive EMCP and regular training in place to ensure they are compliant with Australian export controls. Companies trading in articles subject to the U.S. ITAR will need to have more stringent policies and procedures in place, which we will discuss in another blog post. If your company is trading in controlled goods and does not have an EMCP, or has not reviewed policies and procedures related to export controls in over a year, contact us to find out how we may be able to assist you.

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