Export Control Compliance Programs Need Robust Communications, Experts Say

“Constant communication, especially in a world where things are changing so fast, is very important,” said Linda Weinberg, partner and international trade co-chair at Barnes & Thornburg. “Maybe it’s going to be a standing Zoom meeting once a week or something with your other locations. It’s just really important to make sure that all of the news that’s coming through is being filtered through to all of the locations.”

Pe Li Wong, principal at BDO USA, “couldn’t agree more” with Weinberg, she said. “When an organization is operating in silos, that brings risk with it because certain business units or functions are looking at risk differently, so making sure that you’re on the same page is important,” Wong said.

Weinberg would structure compliance teams to include personnel from a wide range of stakeholders, including sales, engineering, procurement, supply chain, finance, legal and human resources. She believes human resources should be involved because the U.S. has restrictions on communicating technical data to foreign employees.

Weinberg said a company’s leadership, including top executives, should regularly communicate to the whole firm how important export control and sanctions compliance is. Local entities need strong policies and procedures in place, as well as people on the ground in each location who can direct compliance with headquarters oversight.

Wong recommended having clear reporting lines to headquarters. “Your organization chart should not look like a map of train tracks because it just creates ambiguity and confusion,” she said.

Weinberg said headquarters compliance personnel should make on-site visits regularly, if resources allow, because in-person meetings are more effective than remote ones at emphasizing the importance of compliance and reviewing a company's work in that area. She also suggested that any misunderstandings be promptly countered.

“Sometimes you may want to anticipate some misunderstandings because there are some laws that are not in particular very clear, and that’s the time when you really have to make sure that you’re communicating in a very clear way,” Weinberg said.

Weinberg urged companies to create “clear channels” where employees can report potential issues. All employees should be made aware of the reporting mechanism, such as an e-mail address or phone number, and should be assured they won’t be punished for making reports.

Weinberg and Wong both emphasized the need for employees to receive regular and timely training on export controls, including recent regulatory changes. Companies are encouraged to train as many employees as possible and deliver that training in local languages to ensure it’s well understood.

Weinberg said companies should integrate compliance into their business processes “so that they’re not alien, they’re part of your everyday” work. Using technology, such as automated screening of prospective customers, can also help prevent violations.

Companies are advised to conduct periodic assessments of their risks. They could face increased risk if they are involved in sensitive areas, such as semiconductor manufacturing or artificial intelligence research, or work in the energy sector, in which significant producers, such as Iran and Russia, are sanctioned. Doing business with countries that are involved in transshipment also may pose heightened risk.

“If you don’t have the resources to give the same love and attention to all of your locations, you’re going to want to think about prioritizing riskier locations," Weinberg said. "That may mean prioritizing those locations that are in countries with, perhaps, weaker export controls laws or weaker laws in general or that may be located in close proximity or share a border with an embargoed country.“