How to Overcome Issues &     Complexities in Global Trade  Management by Having an Effective    Internal Compliance Progra...
About Hitachi• Hitachi, Ltd., headquartered in Tokyo, Japan, is a leading global electronics  company with approximately 3...
Hitachi’s Global Operations                                                                                   Fiscal Year ...
Hitachi Europe Ltd (HEU) • Headquarters based in the U.K. • 6 Business Groups located in the U.K.   and Germany • 2 subsid...
HEU Export Control Organisation   Shimizu    (MD)                                 PDD                   Neil Markham Expor...
HEU Corporate Policy • The HEU Export Administration Regulations policy has first priority   among all HEU policies. • It ...
HEU Export Control Procedures Manual • High level overview including EU, US   and Japanese export controls. • All relevant...
Product Control  • Each business group must classify all of their products against the    relevant control lists to determ...
Customer Screening•   The HEU Sales Manager must complete a New Account Application form for all new customers.•   All new...
Supplier Screening • All suppliers, subcontractors and business partners should be   screened before HEU enters into a con...
Sanctions & Embargoes• Some destinations are more likely to be involved in WMD  programs than others and it is important t...
End Use Controls•   Applies to ALL products and technology, regardless of whether the product is a list controlled    prod...
Technology Transfer Controls  • There are two internal policies relating to the    transfer of technology:      – Treatmen...
Foreign Trade Module on SAP• SAP is the sales order processing system for  HEU. The Export Control Administrators are  res...
Training • Export control handouts in the starter   pack for all new employees as well as   awareness training during indu...
Audits • In addition to audits made by BIS or other national   licensing authorities, the following audits are conducted: ...
Key Points to Remember  • Keep it simple  • Clearly defined export control organisation  • Company policy and procedures  ...
Copyright © 2006, Hitachi, Ltd., All rights reserved. 18
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Export Compliance Management Seminar 31 May 2012: How to Overcome Issues & Complexities in Global Trade Management by Having an Effective Internal Compliance Programe

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Clare French - Hitachi Europe

www.exportcompliancemanagement.com

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Export Compliance Management Seminar 31 May 2012: How to Overcome Issues & Complexities in Global Trade Management by Having an Effective Internal Compliance Programe

  1. 1. How to Overcome Issues & Complexities in Global Trade Management by Having an Effective Internal Compliance ProgrameClare FrenchExport Control ManagerHitachi Europe Ltd Copyright © 2006, Hitachi, Ltd., All rights reserved. 1
  2. 2. About Hitachi• Hitachi, Ltd., headquartered in Tokyo, Japan, is a leading global electronics company with approximately 323,000 employees worldwide. Fiscal 2011 (ended March 31st 2012) consolidated revenues totalled 9,665.8 billion yen ($117.8 billion)• The Hitachi Group offers a wide range of systems, products and services in the following market sectors - information & telecommunication systems - power systems - social infrastructure and industrial systems - electronic systems and equipment - construction machinery - high functional materials and components - automotive systems - components and devices - digital media & consumer products - and financial services. Copyright © 2006, Hitachi, Ltd., All rights reserved. 2
  3. 3. Hitachi’s Global Operations Fiscal Year 2011. Europe Sales - 761 billion yen North America Japan Sales - Sales - 869 billion yen Hitachi Europe Ltd. 5,534 billion yen U.K. Hitachi (China), Ltd. Hitachi America, Ltd. Hitachi, Ltd. Hitachi Asia Ltd. Asia (incl. China) Singapore Sales - 2,000 billion yen Other Areas Sales - 500 billion yen Total Sales – 9,666 billion yen Copyright © 2006, Hitachi, Ltd., All rights reserved. 3
  4. 4. Hitachi Europe Ltd (HEU) • Headquarters based in the U.K. • 6 Business Groups located in the U.K. and Germany • 2 subsidiaries located in the U.K. and France • Various sales offices throughout Europe Copyright © 2006, Hitachi, Ltd., All rights reserved. 4
  5. 5. HEU Export Control Organisation Shimizu (MD) PDD Neil Markham Export Administration Committee ERD/HDCE Joyce Healy Shimizu (Chair) Minesaki (Vice Chair) ICEG Bernd Spielmanns Nomura IFG Diane Burling DMG Clare French Fujii (Co-ordinator) EPSG Sabine Birr French (Co-ordinator) European Export Control Meeting (EECM) Advisor (Tolan) In addition, Hitachi Ltd, Japan have a Corporate Export Regulation Department (CERD) Within CERD there is a division who supervise all of the overseas subsidiaries. Copyright © 2006, Hitachi, Ltd., All rights reserved. 5
  6. 6. HEU Corporate Policy • The HEU Export Administration Regulations policy has first priority among all HEU policies. • It forms part of the terms and conditions of employment and ensures that employees. • Section 16 of the policy states: ‘An employee who has violated any provision of these regulations on export administration or on re-export administration may be subjected to disciplinary action which may include dismissal.’ HITACHI EUROPE COMPANY POLICY Subject: Export Administration Regulations Policy No: Effective: Supersedes: HEU-050-001-1 15/05/11 REV 009 11/01/89 08/07/09 Revision No: Approved By: Prepared By: 010 (S) (CF) Copyright © 2006, Hitachi, Ltd., All rights reserved. 6
  7. 7. HEU Export Control Procedures Manual • High level overview including EU, US and Japanese export controls. • All relevant export control forms available for down load. • Links to relevant websites such as BIS (UK), BIS (US), BAFA and FCO. • Available to all employees on the HEU intranet. Copyright © 2006, Hitachi, Ltd., All rights reserved. 7
  8. 8. Product Control • Each business group must classify all of their products against the relevant control lists to determine whether or not they are dual use list controlled. • This has to be done with the assistance of the Product/Technical managers and the factories/suppliers. Product Product Description Date EU Subject Comments Number Created ECCN to US on SAP EAR CPxxxxx LCD Projector 25.01.07 None No CPxxxxx LCD Projector 10.01.06 None 5A992 Import licence for France CPXxxxx LCD Projector 25.01.07 None No CPXxxxx LCD Projector 25.01.07 None No Includes CD Rom DTxxxx Lamp 22.04.04 None No HDxxxxx Digital Still Camera 05.08.09 None No Shipped directly from supplier to customer Lxxxxxxx LCD TV 24.07.08 None No Shipped directly from supplier to customer PLxxx Power Cord Set 22.04.04 None No Manufactured in U.K. VAxxxxx Wireless Card 04.09.07 None 5A992 Copyright © 2006, Hitachi, Ltd., All rights reserved. 8
  9. 9. Customer Screening• The HEU Sales Manager must complete a New Account Application form for all new customers.• All new customers must sign a Note of Confirmation (NOC), which is a letter of commitment to confirm that they will comply with all relevant national and international export control regulations.• All customers must be screened for export control by the export control administrator before the account can be opened by the Business.• All existing customers and ship to accounts are check on a monthly basis against the Data Denied Parties List.• If a company is found on this list, then approval must be obtained from the Managing Director and all relevant authorisations be obtained before an export can be made.• Every year, the export control administrator for each business group must conduct an annual non proliferation review of all customers. This involves the Sales Managers confirming for each customer whether or not they have any concerns that the customer is involved in WMD proliferation activities.• The general terms and conditions of sale, which can be found on the back of the sales invoice also contain a detailed section on export control and the requirement that the customer complies with all relevant national and international regulations. Copyright © 2006, Hitachi, Ltd., All rights reserved. 9
  10. 10. Supplier Screening • All suppliers, subcontractors and business partners should be screened before HEU enters into a contract with them. The company/individuals name should be checked against the MK Data Denial List. • If any of these suppliers, subcontractors or business partners are to receive any Hitachi confidential and/or technical and/or list controlled information from any Hitachi group companies then the following needs to be completed: - a ‘Red Flag Indicator’ form must be completed. - the supplier must sign a letter of confirmation that none of the information will be used in any connection with the proliferation of weapon of mass destruction or the missiles capable of their delivery. Copyright © 2006, Hitachi, Ltd., All rights reserved. 10
  11. 11. Sanctions & Embargoes• Some destinations are more likely to be involved in WMD programs than others and it is important that you know, Iran where possible, the final destination of your item.• In August 2011, Hitachi Ltd, Japan stipulated that no exports can be made either directly or indirectly to Iran. Cuba• Cuba, Iraq, North Korea, Sudan and Syria are deemed the most sensitive destinations and the following steps must be taken before any export can be made: Iraq – Authorisation must be obtained from the relevant licensing authorities to allow the export. If an export licence is not required, then this should be confirmed in writing by the licensing authority. North – Written confirmation must be obtained from the supplier that Korea all required national export permits and licences have been obtained, and copies should be forwarded to HEU. – A signed end use certificate must be obtained from the final Sudan customer to confirm that the goods are not for use in any way related to the proliferation of weapons of mass destruction or the missiles capable of delivering them. – Approval from the Japanese Head Office of the relevant business group must be obtained, and any special Syria requirements that may be stipulated must be adhered to. – Written approval that the export can take place must be signed off by the HEU managing director. Copyright © 2006, Hitachi, Ltd., All rights reserved. 11
  12. 12. End Use Controls• Applies to ALL products and technology, regardless of whether the product is a list controlled product or not• Hitachi, treat all items as dual use and to identify those on the EU control lists, they are referred to as list controlled dual use• Any enquires received that seem in any way unusual or irregular must be considered very carefully by the business group and the export control administrator• Red Flag Indicators (RFIs) are questions that can trigger ‘Catch-All’• Need to have made reasonable checks and applied due diligence• If an employee has any doubts about the legality of an export they must contact their export control administrator before proceeding with any export. Copyright © 2006, Hitachi, Ltd., All rights reserved. 12
  13. 13. Technology Transfer Controls • There are two internal policies relating to the transfer of technology: – Treatment of Confidential Information. – Treatment of Technical Information Shared via Networks. • The European R&D Centre (ERD) of Hitachi Europe Ltd. was established in April 1989, leading the research and development activities in Europe. • A system of ‘Judgement’ forms is used. • It is the responsibility of the author of the technology to complete this form and show whether it is basic scientific research, in the public domain or whether or not it has an ECCN. • Each form must be signed off by the General Manager. Copyright © 2006, Hitachi, Ltd., All rights reserved. 13
  14. 14. Foreign Trade Module on SAP• SAP is the sales order processing system for HEU. The Export Control Administrators are responsible for the management of the export control master data on SAP.• The system monitors all materials, customers, sales orders and deliveries in such a way as to ensure that they all conform to export control procedures as set by HEU business policy and legal requirements imposed by government agencies.• Automatic export control checks are made when an: – order is created or amended; – delivery is created or amended; – order is invoiced.• A traffic light system is used to indicate any export control blocks. If an order is blocked for export control with a red traffic light, then a delivery cannot be created. Copyright © 2006, Hitachi, Ltd., All rights reserved. 14
  15. 15. Training • Export control handouts in the starter pack for all new employees as well as awareness training during induction days. • E-Learning Slides in five languages with a Q&A section. • Regular e-mail updates on regulation changes including the newly introduced ‘Hitachi in Europe Export Control Newsletter’ • Export control awareness training given periodically during sales meetings. • The Export Control Administrators receive regular training from the Corporate Export Control Manager and external training companies. Copyright © 2006, Hitachi, Ltd., All rights reserved. 15
  16. 16. Audits • In addition to audits made by BIS or other national licensing authorities, the following audits are conducted: – Internal audits between each business group are completed annually and findings forwarded to the Managing Director. – An ‘Export Inquiry Form’ is completed by each business group and sent to Head Office once a year. – All business groups audited every 3 - 4 years by Head Office. Copyright © 2006, Hitachi, Ltd., All rights reserved. 16
  17. 17. Key Points to Remember • Keep it simple • Clearly defined export control organisation • Company policy and procedures • Regular awareness training • Training tailored to match the needs of the employees • Provide fast and clear decisions so compliance is not a roadblock • Make compliance a competitive advantage • Ensure that if an employee has any doubts about the legality of an export or inquiry they know who to contact before proceeding any further Copyright © 2006, Hitachi, Ltd., All rights reserved. 17
  18. 18. Copyright © 2006, Hitachi, Ltd., All rights reserved. 18

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