FlexNet Producer Suite White Paper Software Export

7/30/2019 FlexNet Producer Suite White Paper Software Export

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Leveraging On-Demand Service toSimplify Software Export Compliance


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Leveraging On-Demand Service to Simplify Software Export Compliance

Flexera Software: FlexNet Producer Suite White Paper Serie2

Leveraging On-Demand Service to SimplifySoftware Export Compliance

Complexities of Export Compliance

U.S. export laws regulate exports of all software, not justsoftware that contains encrypt ion. That is why softwareproducers and high-tech manufacturers, especially those whoare expanding into foreign markets, need an efcient and lowcost way to deliver t heir computer software and updates, whilestaying current and complying with United States export lawsand regulations.

Enterprise software companies such as EMC Documentum Inc.,Sybase, Autodesk, RSA and many ot her software producers andhigh-tech manufacturers, rely on FlexNet Producer Suite on-demand service from Flexera Software to deliver their softwareglobally and to manage the legal complexities associated withsoftware export.

Flexera Softwares on-demand service is the leading ElectronicSoftware Delivery and Management (ESDM) solution, and morethan 40% of all downloads via this service occur outside ofthe United States. The on-demand service has a proven recordof helping software companies comply with laws regulat ingsoftware export, reduce customer support and operat ionalexpenses, accelerate revenue recognition and create closer, moreprotable relationships with customers. The on-demand servicecan be rapidly implemented and seamlessly integrated withany companys web site, sat isfying the increasing demand forelectronic delivery of applicat ions and updates to streamline thesoftware fulllment and management process.

Penalties for Violation of Software Export LawsThe laws governing export of computer software arecomplicated, and the penalties for violations are steep. Exportviolations are considered a strict liability offense, which meansthat all mistakes, even innocent ones, are subject to penalty.

Criminal penalties include nes of up to $1 million dollars or5 t imes the value of the export, whichever is greater, and caninclude jail time of up to 5 years. Administrative penaltiescan include nes of up to $100,000 dollars per violation andrevocation of export privileges. Examples of penalties cited onthe Bureau of Industry and Security (BIS)* web site include:

$135,000 civil penalty imposed on a subsidiary of a Fortune500 company, to resolve allegations that the companyexported automated ngerprint identication system,associated ngerprint ident ication software and encrypt ionsoftware to numerous destinations in violat ion of U.S. exportcontrol laws (July 2002).

$95,000 civil penalty imposed on a San Diego, Californiabased software company, to settle allegations that the

company exported encryption software to South Korea inviolation of U.S. export control laws (February 2002).

Bureau of Industry and Security ApprovalFlexNet Producer Suite on-demand service includes a proprietaryautomated access control system t hat screens end-user andlocation eligibility for every download of software from itsservers. The BIS reviewed this system and conrmed that itcomplies with Sections 734.2(b)(9)(ii) and (iii) of the ExportAdministration Regulations in satisfaction of governmentsoftware export regulations.

Automated High-Speed Screening

The effectiveness of t he on-demand service access control systemis derived from its mult i-t iered screening process. When an end-user attempts to download a product, the access control systemis automatically enabled and, depending on the encryptionlevel and Export Control Classication Number (ECCN) of thesoftware (provided by t he software producer and stored inFlexera Softwares database), the system:

* Formerly the Bureau of Export Administration (BXA)


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Leveraging On-Demand Service to Simplify Software Export Compliance

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Screens all the available data relating to the end-user todetermine whether t he customer is a foreign government,where the customer is located and whether the end-useror customer name appears on a master list of prohibitedparties.

Updates a master list daily to insure the information inthe FlexNet Producer Suite on-demand database is the mostcurrent available.

While software producers and high-tech manufacturers st ill needto screen their customers at point of sale against prohibited partylists, the FlexNet Producer Suite on-demand mult iple screeningmeasures serve as extra protection. If any of t he data containedin the FlexNet Producer Suite on-demand database indicates thatthe download should be deniedfor example, the on-demandservice geo-location lookup determines that an end-user claimsto be in India when they are actually in Iraqthe system will notallow the end-user to access the software. This is an importantand additional security layer for software producers and high-tech manufacturers.

Bi-Annual Reporting RequirementsProducers using FlexNet Producer Suite on-demand servicecan transfer responsibility to Flexera Software as t he Exporterof Record and ofoad the BIS required bi-annual reportingrequirement (which can be especially burdensome for companiesselling products with varying encryption levels), for all softwaredelivered via the on-demand service.

The on-demand export compliance service captures allthe relevant reporting information and generates a report

automatically. The report then goes through a review process tocheck for completeness and accuracy prior to being submitted tothe BIS. Flexera Softwares system also automat ically maintainsa record of all foreign software deliveries for ve years, a BISrequirement.

SummaryFlexNet Producer Suite on-demand service from Flexera Softwareis a global web-based delivery and support solut ion that enablessoftware producers and high-tech manufacturers to easily deliver,track and manage the software they distribute to their globalcustomers while reducing legal risk, enhancing compliance withthe laws regulating export of computer software and improvingtheir relationships with customers. It also allows softwareproducers and high-tech manufacturers to reduce the recordkeeping and shipping costs associated with physical distributionacross national borders and closer to home.

About Flexera SoftwareFlexera Software is the leading provider of strategic solutions

for Application Usage Management; solutions deliveringcontinuous compliance, optimized usage and maximized valueto application producers and t heir customers. Flexera Softwareis trusted by more than 80,000 customers that depend onour comprehensive solutions- from installation and licensing,entitlement and compliance management to applicationreadiness and enterprise license optimization - to strategicallymanage application usage and achieve breakthrough resultsrealized only through the systems-level approach we provide.For more information, please go to: www.exerasoftware.com

FEATURES BENEFITS

Electronic Software Delivery, tracking and management Reduces record keeping and shipping costs associated wit hphysical distribution across national borders

Automated, multi-t iered system checks end-user data for eachdownload

Provides fast and thorough screening of all end-users and everydownload

Triple checking of customer location including geo-location lookup Guards against end-users who provide false information

Prohibited parties list updated daily Minimizes risk of download by end-users recently added to the BISprohibited list

Bi-annual reporting for all foreign downloads of 5D002(high-encryption) products

Reduces administrative costs, record keeping and report preparation

Flexible architecture Integrates easily with any software producer CRM system, andallows Flexera Software to accommodate changes to exportregulations and processes

BIS conrmation of system compliance Provides additional security that software exports wontviolate the law

Data warehouse with standardized and ad hoc reporting of alltransactions via secure extranet

Allows on-demand creation of multiple business reports to track,monitor and better understand customer activity
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Flexera Software LLC1000 East Woodeld Road,Suite 400Schaumburg, IL 60173 USA

Schaumburg(Global Headquarters):+1 800-809-5659

United Kingdom (Europe,Middle East Headquarters):+44 870-871-1111+44 870-873-6300

Japan (Asia,Pacic Headquarters):+81 3-4360-8291

For more ofce locations visit:www.exerasoftware.com

Copyright 2011 Flexera Software LLC. All other brand and product names mentioned herein may be the trademarks and registered trademarks of their respective owners.

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FlexNet Producer Suite White Paper Software Export