The State Department’s recent debarment of a 27-year veteran export compliance professional is inspiring water cooler discussions about why and how it happened.
Between 2008 and 2012 the respondent – then the senior compliance officer at a leading Aerospace and Defense company – fabricated export control documents and presented them as Department of State (DOS) authorizations. Consequently, the company unlawfully exported defense articles (including technical data) and violated the Arms Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR). The official Charging Letter cites a whopping 21 violations and reveals a trail of internal emails through which various falsehoods were communicated to unsuspecting colleagues. “It ain’t pretty but it is official” the former staffer said of one self-doctored export license.
How can companies avoid a similar betrayal and be confident their employees are committed to export compliance? Four questions to consider:
1. Are you leading by example?
Creating a compliant workplace culture starts at the top with total management buy-in. It is management’s responsibility to send a clear message that the company cares about compliance. Providing ample resources and training to maintain high compliance standards demonstrates a commitment from senior staff that trickles down to all employees. Implementing official policies and procedures that are well-documented in a compliance manual, ensuring employees understand the consequences of non-compliance, and projecting positivity and engagement are some ways to promote compliant business practices as the expected, company-wide norm.
2. How well do you know your team?
If you’re not routinely screening your employees alongside your trade chain partners, you may be inviting export violations to occur right under your nose. Screening ensures you’ll catch any changes in employee status, so you can find out if it’s a case of mistaken identity or a valid reason for concern. Internal auditing is another important safeguard; reviewing your export compliance procedures and evaluating the degree to which they’re being followed is integral to uncovering any broken links in your chain.
3. Would your staff step up…and speak up?
The debarred former staffer spent four years expediting illegal exports before being caught. Was there anyone at the company who had early suspicions but didn’t come forward? Employees must not only feel comfortable with reporting compliance issues, but must also understand that it’s their obligation to do so. Clearly defined reporting policies, systems where workers can maintain anonymity, and multiple channels through which people can divulge information are all considerably more encouraging than a loose “Talk to the boss” directive.
4. Have you made training a priority?
All export compliance personnel should understand their responsibilities and how to perform their duties accurately. And when new requirements appear (Export Control Reform, anyone?), ensure your team is at the forefront of preparedness instead of struggling to catch up. Ongoing training keeps compliance front and center, reminds people it’s a priority, and communicates that the company cares about keeping its people empowered and informed. When training programs are neglected, it’s like saying “This doesn’t matter anymore”, and that’s when commitment begins to wane.
Once the slew of export violations was uncovered the aggrieved company took immediate action to fire the offending employee, and has since adopted measures to remedy the conditions under which such blatant abuse of authority could occur. Without knowing those conditions, it’s difficult for anyone to speculate about what the organization could or should have done to prevent the situation. However, we can consider this story a cautionary tale, look at our own workplaces with a more critical eye, and evaluate just how successful our compliance programs actually are.