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Expanding your reach across borders unlocks endless opportunities, but navigating the world of export compliance can feel overwhelming. If questions about compliance with regulations, restricted party screening and export licenses leave you unsure of your next step, you’ll be interested in our recent survey results.
We asked exporters like you how they handle each of these topics, and the results will help you understand where you stand on the export compliance map and identify areas for improvement.
This is the third article sharing our survey results—first, we revealed the top challenges facing exporters, and then how exporters handle documentation, FTAs and AES.
Do You Have an Export Compliance Program in Place?
Imagine being penalized thousands of dollars because you unknowingly violated export regulations. Scary, right? That’s the risk 34% of exporters surveyed face by not having a formal export compliance program (ECP) in place. A solid 62% of respondents do have an ECP to help ensure compliance with regulations.
A strong compliance program does more than reduce the chance of violating export regulations. If violations do occur—and sometimes they do even for the most careful companies—an ECP is a strong mitigating factor when BIS determines penalties for export violations. If a company can document that it is following its program, BIS may reduce or waive penalties.
If you’re one of the companies without an ECP in place or part of the 3% who said they do not know what an ECP is, read our free guide How to Create and Implement an Export Compliance Program. It explains the nine elements of an effective program and how to implement one at your company.
Do You Conduct Restricted Party Screening?
Knowing who you’re doing business with is crucial. Our survey found that a vigilant 67% of exporters conduct regular restricted party screening. This proactive measure shields your company from potential legal and reputational repercussions by ensuring you’re not unknowingly engaging with individuals or entities on government-sanctioned lists.
If the 19% not conducting restricted party screening are surprised to be in the minority, consider this: ignorance is not a defense when it comes to compliance. Skipping this crucial step leaves you vulnerable to penalties, delays and even jail time. The good news? Building a screening program doesn’t have to be complex.
In the United States, the primary restricted party lists are published by the Department of Commerce, Department of State, and Department of Treasury. However, several other agencies produce lists as well.
The easiest way to check all of the lists at one time, in seconds, is by using our Restricted Party Screening Wizard. It checks all the U.S. lists, as well as the United Nations list, the European Union list and lists from several other countries.
If you’re among the 12% of respondents who don’t know what restricted party screening is, start here: Export Compliance: Understanding Restricted Party Screening.
Do Your Products Require an Export License?
Never assume your product doesn’t need an export license. An export license requirement isn’t just about the product’s technical characteristics; it’s also about the destination, end use and end user. That said, most products won’t require one, which aligns with our survey results:
Of those that do require a license for their products, these are the issuing agencies:
- Bureau of Industry and Security (BIS), 49%
- Directorate of Defense Trade Controls (DDTC), 14%
- Both, 22%
- Other, 16%
Though the majority don’t need a license, there’s still a big percentage that does, highlighting the importance of understanding how to determine where your product falls. The free guide How to Determine if You Need an Export License explains the process. Another option is the Shipping Solutions Export Controls Wizard (free trial subscription). It tells you if your product requires an export license based on its classification and destination and if there are any potential license exceptions you can use.
The Impact of Sanctions on Russia and Belarus
Recent geopolitical events have sent ripples through global trade, with our survey indicating that 32% of exporters have felt the effects of sanctions on Russia and Belarus, while 63% haven’t been directly impacted. This underscores the importance of staying updated on geopolitical shifts and adjusting strategies accordingly. Those who answered the first two questions affirmatively—yes they have an ECP in and yes they conduct restricted party screening—will be ready to adjust to future changes.
More Insights from Exporters
Whether you’re a seasoned exporter or just getting started, prioritizing compliance is essential. This article provides a glimpse into how exporters handle some of the most important aspects of compliance, but our survey unveiled much more about how they operate. Watch for future articles on logistics, Incoterms and more.
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