Manufacturing and operations need continuous real-time trade compliance protection.
Market access is as much a matter of compliance regimes as of geography: the trade controls of the country in which production is located, and the trade agreements in force between the country of production, other countries in which the enterprise is located, and existing and target markets, can have significant implications for manufacturing and operations. Access to current, comprehensive compliance regulations and statutes is an important ingredient in informed decision-making processes.
In addition to ensuring market access, all companies need to ensure they do not sell to or buy from individuals or entities on the U.S. Treasury Office of Foreign Assets Control (OFAC) list of Specially Designated Nationals (SDNs). No company wants to be publically exposed as dealing with terrorists, drug traffickers or weapons proliferators. Aside from the penalties and possible jail terms, the damage to professional and corporate reputations is often irreparable.
Other issues for companies in the controlled goods space
For companies with controlled goods or services, there are additional trade compliance issues that can have devastating effects on manufacturing and operations: Throwing out an expensive WIP when you find out too late that the customer is debarred; having your lines shut and (your customers angry) because you can't legally buy from your sole sourced vendor; employees that can't be used because the manufacturing technology is controlled. more +
Other trade compliance issues for companies dealing with controlled goods, technologies or services include:
- Determining the classification of your goods, technologies or services—are they on the Department of State Directorate of Defense Trade Controls (DDTC) United States Munitions List (USML) or the Department of Commerce Bureau of Industry and Security (BIS) Commerce Control List (CCL) of dual-use goods? Are they subject to the Wassenaar Arrangement?
- Are licenses or technical assistance agreements required based on the product, destination, end user or end use?
- Do you already have a license, how much room is left on it, and does it cover these particular circumstances?
- Additional screening requirements for customers, suppliers, employees ... Are they on the BIS entity, denied, or unverified lists? The DDTC debarred list? The EU Terror watch-list? Which other lists do you need to screen against, and how often?