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Richard Hoff - The Eagle Compliance Company www.exportcompliancemanagement.com
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3 juni 2012
International Trade & Compliance dr. Richard Hoff
2
The compliance challenge
Importer Exporter
Bank A Bank B
goods/ information
$
3
The compliance challenge
Importer Exporter
Bank A Bank B
goods/ information
$
export
controls
export
controls
sanctions &
embargoes
sanctions &
embargoes
taxes &
tariffs international
law
registration
& licenses
licenses
anti
corruption
AML/ CFT
4
International complexity
every trade transaction is governed by a
different set of rules…
5
What would you expect?
6
However, from practice….
the compliance officer/ department:
prevents business
does not understand business
needs to fix ad hoc issues, TODAY!
always asks for too much budget
business overrules?
does compliance add value?
7
Business case for compliance
Non-compliance
with EU, US and
local sanction &
export control laws
and regulations
Distortions supply
chain
Bad performance
towards OEMs,
suppliers, …
Reputation risk,
market position,
financial loss,…
Delays in licensing
procedures,
suspension,
debarment, non-
payment
Black listing, excluded
from access to export
controlled items, export
privileges, banking
Legal risk,
business
continuity,…
Prosecution under
criminal,
administrative or
civil law
Legal costs, claims,
reputational loss,…
8
Drivers for compliance
laws & regulations
enforcement
reputation
supply chain demands
banks are starting to ask questions
cost of non-compliance
9
Compliance takes position…
10
Example conversation
This deal means a
great opportunity
Did we check all
regs & licenses?
Come on! We need
this one!
But we need to
make sure that… My people tell me
that it is OK
And if we don’t do it our
competitors will We’ll go for it. Next
item.
11
The compliance challenge
how can my organization
be certain that our trade
transactions meet all
regulatory requirements?
how can I be sure that this
specific transaction can be
executed?
export
compliance
framework &
organization
transaction
due diligence
12
What is needed to comply?
superior knowledge of regulations (& why)
full understanding of:
business processes
the way risks & regulations impact business
a system to get a grip on a complex and
changing ‘universe of transactions’
a positive business culture (& why)
the people to do it
13
Compliance arena
culture
regulations people
business
process
business
process
output/
transaction
input/
transaction
license management
product classification
transaction screening
communication
keeping track of
regulations, red flags
list management
employment checks
training
risk analysis
reporting
post-transaction
14
culture
Software system as KSF
regulations people
business
process
business
process
output/
transaction
input/
transaction
software system: ‘E&E’
– track regulations
– list management
– product classification
– screening, alert handling
– license management
– transaction due diligence
15
Compliance has position!
knowledge
regulations
the way risks & regulations impact business
clear framework
fit with business culture
operational compliance
right people
adequate support
connected with business processes
16
The next step…
identify key risk areas/ trade transactions
export compliance framework, including
role of compliance
implement concrete measures with a view
to the 5 key elements
operate
17