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THE EXPORT PROCESS AT TECHNICOLOR R. Spooner June 2007
Exporting 101 – Shipments of Products <ul><li>The Export/Import Process </li></ul><ul><li>Technicolor’s Role as 3PL </li><...
International Trade: The Export/Import Process BEGIN Pull, Pack and Stage Material to Ship  END Parties Involved in the Ex...
International Trade: The Export/Import Process <ul><li>Terms To Know: </li></ul><ul><li>PPI (Principal Party of Interest) ...
Distribution Services: Our Role As 3PL <ul><li>The Export Administration Regulations  (EAR) place legal responsibility on ...
Distribution Services: Our Role As 3PL <ul><li>If a  client  authorizes Technicolor to export on its behalf, the client is...
Distribution Services: Export Documentation <ul><li>Invoices: Commercial, Customs and Other Forms </li></ul><ul><li>Shippe...
Export Documentation: Commercial Invoice <ul><li>The commercial invoice is a record or evidence of transaction between the...
Export Documentation: Commercial Invoice <ul><li>Specific Language Requirements in the Commercial Invoice:  Certain import...
Export Documentation: Commercial Invoice <ul><li>Marks and Numbers :   The marks and numbers of a shipment are analogous t...
Export Documentation: Commercial Invoice <ul><li>Destination Control Statements  advise the importer and consignee of thei...
Export Documentation: Commercial Invoice <ul><li>Signature : The commercial invoice and packing list need not be signed, u...
Export Documentation: Commercial Invoices
Export Documentation: Commercial Invoices
Export Documentation: Shipper’s Export Dec <ul><li>For many years, the  Shipper’s Export Declaration  was the primary meth...
Export Documentation: Shipper’s Export Dec <ul><li>The SED identifies all necessary reporting information such as parties ...
Export Documentation: Shipper’s Export Dec
Export Documentation: Shipper’s Export Dec
Export Documentation: Shipper’s Export Dec
Export Documentation: Shipper’s Export Dec
Export Documentation: Retention of Documents <ul><li>Exporters (or their agents) must maintain records of all exports for ...
The Automated Export System (AES) <ul><li>An Introduction to AES – The Link To Compliance </li></ul><ul><li>The Automated ...
The Automated Export System (AES) <ul><li>When reporting exports on behalf of our clients, including exports via Federal E...
EXPORT COMPLIANCE PROGRAMS AT TECHNICOLOR R. Spooner June 2007
U.S. Export Requirements <ul><li>The Export Administration Regulations (EAR) place legal responsibility on all persons who...
Fines and Sanctions <ul><li>Penalties for violations of the Export Administration Regulations (EAR) can include: </li></ul...
Exports, Re-Exports and Deemed Exports <ul><li>Exports </li></ul><ul><li>Sending products or technology to locations outsi...
Export Compliance <ul><li>Many U.S. Agencies govern Exports. The ones that Technicolor must be familiar with are: </li></u...
Export Management System (EMS) <ul><li>The Bureau of Industry and Security publishes guidelines for U.S. Exporters to deve...
Export Management System (EMS) <ul><li>Element 1: Management Commitment Policy </li></ul><ul><li>Conveys a clear commitmen...
Export Management System (EMS) <ul><li>Element 2: Responsible Personnel </li></ul><ul><li>Ensures that all export/re-expor...
Export Management System (EMS) <ul><li>Element 3: Record Keeping </li></ul><ul><li>Ensures that export control documents a...
Export Management System (EMS) <ul><li>Element 4: Training </li></ul><ul><li>Ensures that training and education are provi...
Export Management System (EMS) <ul><li>Element 5: Internal Reviews </li></ul><ul><li>Protects the integrity of the total s...
Export Management System (EMS) <ul><li>Element 6: Reporting and Notification </li></ul><ul><li>Provides appropriate report...
Export Management System (EMS) <ul><li>Exporting Requires Up To Eight Reviews, or “Screens”: </li></ul><ul><li>Screening E...
Export Management System (EMS) <ul><li>Screening Elements That  Don’t  Apply to Technicolor: </li></ul><ul><li>Screening E...
Export Management System (EMS) <ul><li>TMS-Based Screening Elements: </li></ul><ul><li>Screening Element 1:  Denied Person...
Export Management System (EMS) <ul><li>TMS-Based Screening Elements: </li></ul><ul><li>Screening Element 2:  Product/Licen...
Export Management System (EMS) <ul><li>Manual Screening Elements: </li></ul><ul><li>Screening Element 3:  Diversion Risk S...
Export Commodity Control Number (ECCN) <ul><li>Screening Element 2:  Product/Licensing Screen   </li></ul><ul><li>Classifi...
Export Commodity Control Number (ECCN) <ul><li>Does the Game/DVD meet the definition of “Mass Market” products? </li></ul>...
Export Commodity Control Number (ECCN) <ul><li>2. Does the Game/DVD meet the definition of “limited access” encryption? </...
Export Commodity Control Number (ECCN) <ul><li>3. If the Game/DVD meets both of the above criteria, does it also meet the ...
Deemed Exports <ul><li>Under the U.S. export control regulations a person is considered an Foreign National if they are  n...
Summary <ul><ul><li>Many encryption products are subject to registration and review prior to export  </li></ul></ul><ul><l...
Summary <ul><ul><li>Technicolor is responsible for Product Screens if we are acting as the  Exporter of Record . </li></ul...
What Do We Need To Do? <ul><li>Issue Export Compliance Policy  (Executive Management) </li></ul><ul><li>Review Contracts  ...
Summary <ul><ul><li>Questions? </li></ul></ul>
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Export Basics

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The Export Process at Technicolor HES

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  1. 1. THE EXPORT PROCESS AT TECHNICOLOR R. Spooner June 2007
  2. 2. Exporting 101 – Shipments of Products <ul><li>The Export/Import Process </li></ul><ul><li>Technicolor’s Role as 3PL </li></ul><ul><li>Export Documents: Crucial To International Trade </li></ul><ul><li>Export Compliance </li></ul>
  3. 3. International Trade: The Export/Import Process BEGIN Pull, Pack and Stage Material to Ship END Parties Involved in the Export/ Import Process: Shipper Exporter Customs Forwarder Carrier Broker Customs Importer Consignee Load and Dispatch Shipment With Export Documentation Export Submitted to US Authorities (AES) Carrier Receives Export Clearance Shipment Transported to Destination Port Customs Documents Submitted (by Broker) Customs Releases Shipment Shipment Tendered to Delivery Agent Prepare Export Documentation Transport to Consignee SO or ISA Issued Received In Good Condition
  4. 4. International Trade: The Export/Import Process <ul><li>Terms To Know: </li></ul><ul><li>PPI (Principal Party of Interest) </li></ul><ul><li>Exporter of Record </li></ul><ul><li>Importer of Record </li></ul><ul><li>Shipper </li></ul><ul><li>Intermediate Consignee </li></ul><ul><li>Ultimate Consignee </li></ul><ul><li>Freight Forwarder </li></ul><ul><li>Intermodal Carrier </li></ul><ul><li>Customs Broker </li></ul><ul><li>EIN (Exporter Identification No) </li></ul><ul><li>TIN (Tax Identification Number) </li></ul><ul><li>Export Power Of Attorney </li></ul><ul><li>Shipper’s Export Declaration </li></ul><ul><li>HTS (Harmonized Tariff Sched) </li></ul><ul><li>U.S. Schedule B Number </li></ul><ul><li>Reportable Units </li></ul><ul><li>ECCN (Export Commodity Classification Number) </li></ul><ul><li>Export License </li></ul><ul><li>AES (Automated Export System) </li></ul><ul><li>EEI (Electronic Export Information) Record </li></ul><ul><li>EAR (Export Administration Regulations) </li></ul>
  5. 5. Distribution Services: Our Role As 3PL <ul><li>The Export Administration Regulations (EAR) place legal responsibility on all persons who have information, authority or functions relevant to carrying out export transactions. Forwarding or export agents (including 3PL’s) have compliance responsibilities under the EAR even when their actions are dependent upon information or instructions given by those who use their services. </li></ul><ul><li>On July 10, 2000, the Bureau of Industry and Security published amendments to the EAR, including Section 748.5, regarding parties to a transaction and relevant definitions. </li></ul><ul><li>Primary responsibility for compliance with the EAR falls on the “ principal parties in interest ” (PPI) in a transaction. Generally, the PPIs in an export transaction are the U.S. seller and the foreign buyer – those who have or take title to goods as part of the export. </li></ul>
  6. 6. Distribution Services: Our Role As 3PL <ul><li>If a client authorizes Technicolor to export on its behalf, the client is the “Exporter of Record”, and under the EAR and is required to: </li></ul><ul><ul><li>(A) provide Technicolor with the information necessary to complete the SED, including Schedule B (HTS) numbers, ECCN numbers and Export License information, value and description of goods, etc.; </li></ul></ul><ul><ul><li>(B) authorize Technicolor to complete the SED by power of attorney or other written authorization, and </li></ul></ul><ul><ul><li>(C) maintain documentation to support the information provided to Technicolor for completing the SED. </li></ul></ul><ul><li>Technicolor is responsible for: </li></ul><ul><li>(A) preparing the SED/documents based on information received from the client; </li></ul><ul><li>(B) maintaining documentation to support the information reported on the export declaration; and </li></ul><ul><li>(C) upon request, providing the client with a copy of the SED. </li></ul>
  7. 7. Distribution Services: Export Documentation <ul><li>Invoices: Commercial, Customs and Other Forms </li></ul><ul><li>Shipper’s Export Declaration </li></ul><ul><li>AES – Filing Electronic Export Information (EEI) </li></ul><ul><li>Retention – What To Keep and For How Long? </li></ul>
  8. 8. Export Documentation: Commercial Invoice <ul><li>The commercial invoice is a record or evidence of transaction between the exporter and the importer. It is similar to an ordinary sales invoice, except some entries specific to the export-import trade are added: </li></ul><ul><ul><ul><li>Specific Language Requirements </li></ul></ul></ul><ul><ul><ul><li>Description of Goods </li></ul></ul></ul><ul><ul><ul><li>Marks and Numbers </li></ul></ul></ul><ul><ul><ul><li>Destination Control Statement </li></ul></ul></ul><ul><ul><ul><li>Signature </li></ul></ul></ul>
  9. 9. Export Documentation: Commercial Invoice <ul><li>Specific Language Requirements in the Commercial Invoice: Certain importing countries may require that the commercial invoice and the packing list be made out in, or translated to, the language of the importing country, for example, in French for shipment to France, in Italian to Italy, and in Spanish to Mexico and Venezuela. </li></ul><ul><li>Description of Goods: The description of the goods in the commercial invoice must be specific enough to use for import classification purposes. In all other documents, the description can be in general terms provided they are not inconsistent with the description in the invoice. </li></ul>
  10. 10. Export Documentation: Commercial Invoice <ul><li>Marks and Numbers : The marks and numbers of a shipment are analogous to the identification (ID) card of a person. They identify the cargo the same way an ID card identifies a person. The exporter, Customs, carriers, and importer rely on them to distinguish one consignment from another. </li></ul><ul><li>The purpose of the marks and numbers is to identify the cargo, not the consignee, and they must be easily distinguishable from marks and numbers of other cargo. </li></ul>An example of the marks and numbers for an export shipment is presented in the Diagram above.
  11. 11. Export Documentation: Commercial Invoice <ul><li>Destination Control Statements advise the importer and consignee of their responsibilities under the U.S. export regulations for re-export from the country shown as the ultimate destination on the export documentation. </li></ul><ul><li>The destination control statement states “These commodities (technology, software) were exported from the United States in accordance with the Export Administration Regulations. Diversion contrary to U.S law is prohibited.” </li></ul><ul><li>All invoices and transport documents relating to export shipments from the U.S. must include this destination control statement. </li></ul><ul><li>If a domestic sale is made and there is reason to believe the products will be exported by the domestic purchaser, this statement must also be included on the domestic invoice. </li></ul>
  12. 12. Export Documentation: Commercial Invoice <ul><li>Signature : The commercial invoice and packing list need not be signed, unless required by the destination country or otherwise stipulated. In practice, the original and the copy of the commercial invoice and packing list are often signed. </li></ul><ul><li>Technicolor requires that all export invoices are signed by the employee preparing them. This way, we comply with all variations of signature requirements for the countries we export to. </li></ul>
  13. 13. Export Documentation: Commercial Invoices
  14. 14. Export Documentation: Commercial Invoices
  15. 15. Export Documentation: Shipper’s Export Dec <ul><li>For many years, the Shipper’s Export Declaration was the primary method of reporting export statistics to the U.S. Census Bureau and providing for export control administration by the Office of Export Enforcement. </li></ul><ul><li>New electronic techniques such as EDI have dramatically changed the way our government collects data and administers export controls. Through the Automated Export System, SED data is now transmitted electronically. The Electronic Export Information (EEI) Record is the required reporting method since June 2004. The paper SED is still important, but now provides only backup data used to support EEI filings. </li></ul>
  16. 16. Export Documentation: Shipper’s Export Dec <ul><li>The SED identifies all necessary reporting information such as parties involved, their roles and relationships, statistical information (Schedule B), export compliance classifications (ECCN), export license/authorization data, and so forth. </li></ul><ul><li>Primary responsibility for the data provided rests with the U.S. Principal Party of Interest, also called the Exporter of Record. This is usually our client. Agents, Forwarders and other Involved Parties (e.g. Technicolor) are liable for the accuracy of data they enter on the SED and for verifying that the export complies with U.S. laws. </li></ul><ul><li>All SED forms must be signed by the person preparing the document. </li></ul>
  17. 17. Export Documentation: Shipper’s Export Dec
  18. 18. Export Documentation: Shipper’s Export Dec
  19. 19. Export Documentation: Shipper’s Export Dec
  20. 20. Export Documentation: Shipper’s Export Dec
  21. 21. Export Documentation: Retention of Documents <ul><li>Exporters (or their agents) must maintain records of all exports for five years from the date of export or re-export. </li></ul><ul><li>BIS, CBP and other agencies may inspect these records whenever they deem necessary and may cite us if we fail to have requested records. </li></ul><ul><li>For each international shipment, U.S. export laws specifically require us to maintain records of the following documents as applicable: </li></ul><ul><ul><li>Export licenses, applications and all documents submitted in support of, or in relation to, a license application. </li></ul></ul><ul><ul><li>Application for International Import Certificate. </li></ul></ul><ul><ul><li>International Import Certificate. </li></ul></ul><ul><ul><li>Delivery Verification Certificate or similar evidence of delivery </li></ul></ul><ul><ul><li>Shipper’s Export Declaration (SED). </li></ul></ul><ul><ul><li>Air Waybill, Bill of Lading, Dock Receipt or a short form bill of lading issued by any carrier… and any other export clearance documents. </li></ul></ul><ul><ul><li>Memoranda, Notes, Correspondence, Contracts, Pro forma Invoices. </li></ul></ul><ul><ul><li>Customer’s Purchase Order. </li></ul></ul><ul><ul><li>Packing List. </li></ul></ul><ul><ul><li>Commercial Invoice. </li></ul></ul>
  22. 22. The Automated Export System (AES) <ul><li>An Introduction to AES – The Link To Compliance </li></ul><ul><li>The Automated Export System (AES) is used to convey export shipment information to our Government. </li></ul><ul><li>AES is a joint venture between CBP, the Foreign Trade Division of the Bureau of the Census (Commerce), the Bureau of Industry and Security (Commerce), the Directorate of Defense Trade Controls (State), other Federal agencies, and the export trade community. It is the central point through which export shipment data is filed electronically to Customs, using the efficiencies of Electronic Data Interchange. </li></ul><ul><li>Before AES, the export system was paper-bound; expensive, labor intensive, error prone. AES uses technology in a new way to address a significant problem that existed with the export process. </li></ul>
  23. 23. The Automated Export System (AES) <ul><li>When reporting exports on behalf of our clients, including exports via Federal Express and United Parcel Service systems, Technicolor has the following responsibilities: </li></ul><ul><ul><li>To accurately prepare and file the electronic export information (EEI) based on information received from the client and other parties involved in the transaction; </li></ul></ul><ul><ul><li>To obtain a power of attorney or written authorization to complete the EEI; </li></ul></ul><ul><ul><li>To maintain documentation to support information filed in AES; </li></ul></ul><ul><ul><li>Upon request, to provide the USPPI with a copy of the EEI filed by us. </li></ul></ul>
  24. 24. EXPORT COMPLIANCE PROGRAMS AT TECHNICOLOR R. Spooner June 2007
  25. 25. U.S. Export Requirements <ul><li>The Export Administration Regulations (EAR) place legal responsibility on all persons who have information, authority or functions relevant to carrying out export transactions. </li></ul><ul><li>Forwarding or export agents (including 3PL’s) have compliance responsibilities under the EAR even when their actions are dependent upon information or instructions given by those who use their services. </li></ul><ul><li>Export Enforcement special agents work with BIS's licensing officials and policy staff to deter the export of items which, in the hands of unreliable users, can prove damaging to U.S. interests. </li></ul>Exports are governed by the Export Administration Regulations (EAR)
  26. 26. Fines and Sanctions <ul><li>Penalties for violations of the Export Administration Regulations (EAR) can include: </li></ul><ul><li>Criminal: </li></ul><ul><li>&quot;Willful violations:&quot; </li></ul><ul><ul><ul><li>Corporation - A fine of up to the greater of $1,000,000 or five times the value of the exports for each violation; </li></ul></ul></ul><ul><ul><ul><li>Individual - A fine of up to $250,000 or imprisonment for up to ten years, or both, for each violation. </li></ul></ul></ul><ul><li>&quot;Knowing violations:&quot; </li></ul><ul><ul><ul><li>Corporation - A fine of up to the greater of $50,000 or five times the value of the exports for each violation; </li></ul></ul></ul><ul><ul><ul><li>Individual - A fine of up to the greater of $50,000 or five times the value of the exports or imprisonment for up to five years, or both, for each violation. </li></ul></ul></ul>
  27. 27. Exports, Re-Exports and Deemed Exports <ul><li>Exports </li></ul><ul><li>Sending products or technology to locations outside of the U.S. </li></ul><ul><li>Traveling outside the U.S. with products or technology </li></ul><ul><li>Re-Exports </li></ul><ul><li>Shipment of U.S.-origin items from one foreign country to another foreign country </li></ul><ul><li>Release of U.S.-origin technology to foreign national outside U.S. </li></ul><ul><li>Deemed Exports </li></ul><ul><li>Releasing technology to a foreign national within the U.S. </li></ul><ul><ul><ul><ul><ul><li>Visual inspection </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Oral exchange </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Made available by practice or application </li></ul></ul></ul></ul></ul><ul><li>Posting on a computer system that is accessible from outside the U.S. </li></ul>Exports take many forms
  28. 28. Export Compliance <ul><li>Many U.S. Agencies govern Exports. The ones that Technicolor must be familiar with are: </li></ul><ul><li>U.S. Census Bureau </li></ul><ul><ul><ul><li>Division of Commerce Dept. that collects export and import statistics. </li></ul></ul></ul><ul><li>BIS (Bureau of Industry & Security) </li></ul><ul><ul><ul><li>Division of Commerce Dept. that published export regulations (15CFR) </li></ul></ul></ul><ul><li>CBP (Customs & Border Protection) </li></ul><ul><ul><ul><li>Division of Homeland Security that enforces export and import laws. </li></ul></ul></ul><ul><li>OFAC (Office of Foreign Asset Controls) </li></ul><ul><ul><ul><li>Division of Treasury Dept. that regulates flow of property (including products and finances) to embargoed countries and restricted entities </li></ul></ul></ul>Many U.S. agencies govern exports
  29. 29. Export Management System (EMS) <ul><li>The Bureau of Industry and Security publishes guidelines for U.S. Exporters to develop an Export Management System (EMS). </li></ul><ul><li>An EMS Includes Six Key Administrative Elements: </li></ul><ul><li>Element 1: Management Policy Commitment </li></ul><ul><li>Element 2: Responsible Officials </li></ul><ul><li>Element 3: Record keeping </li></ul><ul><li>Element 4: Training </li></ul><ul><li>Element 5: Internal Reviews </li></ul><ul><li>Element 6: Reporting and Notification </li></ul>A formal EMS is a sign of intent to comply
  30. 30. Export Management System (EMS) <ul><li>Element 1: Management Commitment Policy </li></ul><ul><li>Conveys a clear commitment toward compliance with the EAR and U.S. export controls by senior management to all employees involved with export/re-export transactions. </li></ul><ul><li>An important component of this commitment consists in providing sufficient time, money and personnel to make the compliance program effective. </li></ul><ul><li>Demonstrates strong management support of compliance with export control regulations. A senior management official should personally establish commitment to a company export control policy. </li></ul>An EMS starts with management’s commitment
  31. 31. Export Management System (EMS) <ul><li>Element 2: Responsible Personnel </li></ul><ul><li>Ensures that all export/re-export related responsibilities in the company are clearly identified and assigned, that the positions and incumbents are widely known, and that the list is routinely updated. </li></ul><ul><li>Assigns export compliance responsibility separately from sales or other functions where a conflict of objectives may occur. Centralizes the key export functions and coordinates export activities with other departments that may become involved in export-related issues (e.g., legal counsel, credit, shipping or contracts). </li></ul>Objective compliance oversight similar to Imports
  32. 32. Export Management System (EMS) <ul><li>Element 3: Record Keeping </li></ul><ul><li>Ensures that export control documents are maintained in an accurate and consistent manner and are available for inspection as required by the EAR. </li></ul><ul><li>The company's ability to monitor the effectiveness of an export control system depends on the maintenance of complete and accurate records. This element provides a system to ensure that records are maintained in accordance with the EAR. </li></ul>Centralized export records-keeping
  33. 33. Export Management System (EMS) <ul><li>Element 4: Training </li></ul><ul><li>Ensures that training and education are provided on a regular basis to all employees involved in export-related activities. </li></ul><ul><li>Identifies the person responsible for scheduling and conduct of training on export/re-export issues. A qualified trainer is one who is well-versed in the EAR and familiar with export-related functions within the company. Qualifications should include: practical work experience, attendance at seminars and working knowledge of EAR requirements. </li></ul>An export training program
  34. 34. Export Management System (EMS) <ul><li>Element 5: Internal Reviews </li></ul><ul><li>Protects the integrity of the total system by verifying compliance within all of the company’s export-related locations with the company's written and operational EMS procedures and ensures that the procedures are consistent with the EAR. </li></ul><ul><li>Identifies responsibility for conducting Export Management reviews at the company's sites. </li></ul>Current staff (CPOC’s) will perform export audits
  35. 35. Export Management System (EMS) <ul><li>Element 6: Reporting and Notification </li></ul><ul><li>Provides appropriate reporting mechanisms. Provides clear guidance to company employees should there be questions about activities. </li></ul><ul><li>It is important to establish clear company policies and compliance procedures to ensure that transactions are evaluated by responsible, designated personnel or legal counsel within the company. </li></ul>A process to evaluate incidents
  36. 36. Export Management System (EMS) <ul><li>Exporting Requires Up To Eight Reviews, or “Screens”: </li></ul><ul><li>Screening Element 1: Denied Persons Screen </li></ul><ul><li>Screening Element 2: Product/Licensing Screen </li></ul><ul><li>Screening Element 3: Diversion Risk Screen </li></ul><ul><li>Screening Element 4: Nuclear Screen Screening Element 5: Missile Screen </li></ul><ul><li>Screening Element 6: CBW Screen </li></ul><ul><li>Screening Element 7: Anti-Boycott Screen </li></ul><ul><li>Screening Element 8: Informed Letter/Entity List Screen </li></ul>Technicolor: 3 n/a, 3 automated (TMS), 2 awareness.
  37. 37. Export Management System (EMS) <ul><li>Screening Elements That Don’t Apply to Technicolor: </li></ul><ul><li>Screening Element 4: Nuclear Screen </li></ul><ul><li>Assures compliance with the restriction on prohibited nuclear end uses/end users. </li></ul><ul><li>Screening Element 5: Missile Screen </li></ul><ul><li>Assures compliance with the restrictions on prohibited missile end-uses/end-users. </li></ul><ul><li>Screening Element 6: CBW Screen </li></ul><ul><li>Assures compliance with restrictions on prohibited chemical and biological weapons end-uses/end-users. </li></ul>
  38. 38. Export Management System (EMS) <ul><li>TMS-Based Screening Elements: </li></ul><ul><li>Screening Element 1: Denied Persons Screen </li></ul><ul><li>Screens all customers against the most current Denied Persons List (DPL). </li></ul><ul><li>Screening Element 8: Informed Letter/Entity List Screen Screens all customers against the most current entities list (EL). </li></ul>
  39. 39. Export Management System (EMS) <ul><li>TMS-Based Screening Elements: </li></ul><ul><li>Screening Element 2: Product/Licensing Screen </li></ul><ul><li>Classifies products by Export Control Classification Number (ECCN) to determine what export authorization may potentially be used for the intended destination. </li></ul>Product-related screens are the responsibility of the “Exporter of Record”. This is Technicolor is some cases (Tech-owned goods) and our client in other cases (client-owned goods). If Technicolor is not the Exporter of Record, we are required to know (i.e. have documented evidence) that the Product/Licensing Screen has been completed.
  40. 40. Export Management System (EMS) <ul><li>Manual Screening Elements: </li></ul><ul><li>Screening Element 3: Diversion Risk Screen </li></ul><ul><li>Assesses proposed transactions against a diversion risk profile. </li></ul><ul><li>Screening Element 7: Anti-Boycott Screen </li></ul><ul><li>Assesses proposed transactions against an anti-boycott profile that takes into account conduct prohibited under the Export Administration Act (EAA). </li></ul>Two sceens to be aware of.
  41. 41. Export Commodity Control Number (ECCN) <ul><li>Screening Element 2: Product/Licensing Screen </li></ul><ul><li>Classifies products by Export Control Classification Number (ECCN) to determine what export authorization may potentially be used for the intended destination. </li></ul><ul><li>§742.15 Encryption Items </li></ul><ul><li>Encryption items can be used to maintain the secrecy of information, and thereby may be used by persons abroad to harm U.S. national security, foreign policy and law enforcement interests. </li></ul><ul><li>Exports and re-exports of encryption software, like exports and re-exports of encryption hardware, are controlled because of their functional capacity to encrypt information on a computer system, and not because of any informational or theoretical value that the software may reflect, contain, or represent . For this reason, export controls on encryption software are distinguished from controls on other software regulated under the EAR. </li></ul>Copyright protected CD’s and DVD’s may contain Encryption Software
  42. 42. Export Commodity Control Number (ECCN) <ul><li>Does the Game/DVD meet the definition of “Mass Market” products? </li></ul><ul><li>Mass Market software meets ALL of the following: </li></ul><ul><li>Generally available to the public by being sold, without restriction, from stock at retail selling points by means of any of the following: </li></ul><ul><ul><ul><ul><ul><li>1. Over-the-counter transactions; </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>2. Mail order transactions; </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>3. Electronic transactions; or </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>4. Telephone call transactions; </li></ul></ul></ul></ul></ul><ul><li>b. The cryptographic functionality cannot be easily changed by the user; </li></ul><ul><li>c. Designed for installation by the user without further substantial support by the supplier; and </li></ul><ul><li>d. When necessary, details of the items are accessible and will be provided, upon request, to the appropriate authority in the exporter's country in order to ascertain compliance with conditions described in paragraphs (a) through (c) of this note. </li></ul>“ Mass market” software is exempt from export licenses, but requires pre-export registration/review and semi-annual export reporting
  43. 43. Export Commodity Control Number (ECCN) <ul><li>2. Does the Game/DVD meet the definition of “limited access” encryption? </li></ul><ul><li>Equipment where the cryptographic capability is not user-accessible and </li></ul><ul><li>which is specially designed and limited to allow ANY of the following: </li></ul><ul><li>(1) Execution of copy-protected “software”; </li></ul><ul><li>(2) Access to any of the following: </li></ul><ul><ul><ul><ul><ul><li>(a) Copy-protected contents stored on read-only media; or </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>(b) Information stored in encrypted form on media (e.g., in connection with the protection of intellectual property rights) where the media is offered for sale in identical sets to the public; </li></ul></ul></ul></ul></ul><ul><li>(3) Copying control of copyright protected audio/video data ; or </li></ul><ul><li>(4) Encryption and/or decryption for protection of libraries, design attributes, or associated data for the design of semiconductor devices or integrated circuits; </li></ul>“ Limited Access” software is exempt from export licenses and semi-annual export reporting but still requires pre-export registration/review
  44. 44. Export Commodity Control Number (ECCN) <ul><li>3. If the Game/DVD meets both of the above criteria, does it also meet the following: </li></ul><ul><li>(iii) Items with limited cryptographic functionality. Encryption items for which the use of cryptography is limited to cryptographic functions that are not controlled for “EI” reasons under the EAR (e.g., items with cryptographic functions limited to authentication of digital signature, execution of copy protected software, and “finance specific” items specially designed and limited for banking use or money transactions). </li></ul>Mass market, limited access software with limited cryptographic functionality is also exempt from pre-export registration/review
  45. 45. Deemed Exports <ul><li>Under the U.S. export control regulations a person is considered an Foreign National if they are not a: </li></ul><ul><ul><ul><ul><li>U.S. citizen; </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Lawful permanent resident alien (common definition “green card holder”); or </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Protected individual </li></ul></ul></ul></ul><ul><li>The release, transmission or disclosure of controlled U.S. technology to a foreign national/person, including employees, is a “deemed export” of that technology to the home country of the Foreign National. </li></ul><ul><li>Activities related to technology transfer that involve Foreign Nationals, including employees, third party service providers and visitors, must comply with U.S. Export Regulations. </li></ul>Screening of new employees and contractors
  46. 46. Summary <ul><ul><li>Many encryption products are subject to registration and review prior to export </li></ul></ul><ul><li>Semi-annual reporting requirements exist for the export of certain encryption products </li></ul><ul><li>Certain encryption products have been removed from export control restrictions </li></ul><ul><li>The EAR prohibit export to certain persons (DPL, EL) and certain countries </li></ul><ul><li>The EAR prohibit boycotts or restrictive trade practices not supported by the U.S. </li></ul><ul><ul><ul><ul><li>Countries currently participating in prohibited boycotts are: Bahrain, Iraq, Kuwait, Lebanon, Libya, Moan, Qatar, Saudi Arabia, Syria, UAE, Yemen </li></ul></ul></ul></ul>
  47. 47. Summary <ul><ul><li>Technicolor is responsible for Product Screens if we are acting as the Exporter of Record . </li></ul></ul><ul><ul><ul><ul><ul><li>Export License Requirements (ECCN) </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Pre-Registration and Review Requirements </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Semi-Annual reporting Requirements </li></ul></ul></ul></ul></ul><ul><ul><li>If Technicolor is not the Exporter of Record, we are required to know that the above have been completed. </li></ul></ul><ul><ul><li>Technicolor is responsible for certain Screens regardless of our export role: </li></ul></ul><ul><ul><ul><ul><ul><li>Anti-Boycott Screen </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Screens against DPL and EL </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Diversion Risk Profile (Destination Screen) </li></ul></ul></ul></ul></ul>
  48. 48. What Do We Need To Do? <ul><li>Issue Export Compliance Policy (Executive Management) </li></ul><ul><li>Review Contracts (Compliance Group/Finance) </li></ul><ul><ul><ul><ul><li>Determine when we are responsible for product screens and when not. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Confirm receipt of product screens by clients when appropriate. </li></ul></ul></ul></ul><ul><li>Review Products (Compliance Group/Engineering) </li></ul><ul><ul><ul><ul><li>Determine whether licensing, review or reporting requirements exist. </li></ul></ul></ul></ul><ul><li>Implement Automated Screens (Logistics - TMS) </li></ul><ul><li>Implement Manual Screen (Customer Service) </li></ul><ul><li>Implement “Deemed Export” Screen (Human Resources) </li></ul><ul><li>Establish Recordkeeping System (Compliance Group) </li></ul><ul><li>Establish Training Program (Compliance Group) </li></ul><ul><li>Establish Audit Process (Compliance Group) </li></ul>
  49. 49. Summary <ul><ul><li>Questions? </li></ul></ul>

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