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Leveraging On-Demand Service to Simplify Software Export Compliance


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Leveraging On-Demand Service to Simplify Software Export Compliance

  1. 1. W H I T E PA P E R Leveraging On-Demand Service to Simplify Software Export Compliance
  2. 2. Leveraging On-Demand Service to Simplify Software Export ComplianceLeveraging On-Demand Service to SimplifySoftware Export ComplianceComplexities of Export Compliance Criminal penalties include fines of up to $1 million dollars orU.S. export laws regulate exports of all software, not just 5 times the value of the export, whichever is greater, and cansoftware that contains encryption. That is why software include jail time of up to 5 years. Administrative penaltiesproducers and high-tech manufacturers, especially those who can include fines of up to $100,000 dollars per violation andare expanding into foreign markets, need an efficient and low revocation of export privileges. Examples of penalties cited oncost way to deliver their computer software and updates, while the Bureau of Industry and Security (BIS)* web site include:staying current and complying with United States export lawsand regulations. • $135,000 civil penalty imposed on a subsidiary of a Fortune 500 company, to resolve allegations that the companyEnterprise software companies such as EMC Documentum Inc., exported automated fingerprint identification system,Sybase, Autodesk, RSA and many other software producers and associated fingerprint identification software and encryptionhigh-tech manufacturers, rely on FlexNet® Producer Suite on- software to numerous destinations in violation of U.S. exportdemand service from Flexera Software™ to deliver their software control laws (July 2002).globally and to manage the legal complexities associated with • $95,000 civil penalty imposed on a San Diego, Californiasoftware export. based software company, to settle allegations that the company exported encryption software to South Korea inFlexera Software’s on-demand service is the leading Electronic violation of U.S. export control laws (February 2002).Software Delivery and Management (ESDM) solution, and morethan 40% of all downloads via this service occur outside of Bureau of Industry and Security Approvalthe United States. The on-demand service has a proven record FlexNet Producer Suite on-demand service includes a proprietaryof helping software companies comply with laws regulating automated access control system that screens end-user andsoftware export, reduce customer support and operational location eligibility for every download of software from itsexpenses, accelerate revenue recognition and create closer, more servers. The BIS reviewed this system and confirmed that itprofitable relationships with customers. The on-demand service complies with Sections 734.2(b)(9)(ii) and (iii) of the Exportcan be rapidly implemented and seamlessly integrated with Administration Regulations in satisfaction of governmentany company’s web site, satisfying the increasing demand for software export regulations.electronic delivery of applications and updates to streamline thesoftware fulfillment and management process. Automated High-Speed Screening The effectiveness of the on-demand service access control systemPenalties for Violation of Software Export Laws is derived from its multi-tiered screening process. When an end-The laws governing export of computer software are user attempts to download a product, the access control systemcomplicated, and the penalties for violations are steep. Export is automatically enabled and, depending on the encryptionviolations are considered a strict liability offense, which means level and Export Control Classification Number (ECCN) of thethat all mistakes, even innocent ones, are subject to penalty. software (provided by the software producer and stored in Flexera Software’s database), the system:* Formerly the Bureau of Export Administration (BXA)2 Flexera Software: FlexNet Producer Suite White Paper Series
  3. 3. Leveraging On-Demand Service to Simplify Software Export Compliance • Screens all the available data relating to the end-user to automatically. The report then goes through a review process to determine whether the customer is a foreign government, check for completeness and accuracy prior to being submitted to where the customer is located and whether the end-user the BIS. Flexera Software’s system also automatically maintains or customer name appears on a master list of prohibited a record of all foreign software deliveries for five years, a BIS parties. requirement. • Updates a master list daily to insure the information in the FlexNet Producer Suite on-demand database is the most Summary current available. FlexNet Producer Suite on-demand service from Flexera Software is a global web-based delivery and support solution that enablesWhile software producers and high-tech manufacturers still need software producers and high-tech manufacturers to easily deliver,to screen their customers at point of sale against prohibited party track and manage the software they distribute to their globallists, the FlexNet Producer Suite on-demand multiple screening customers while reducing legal risk, enhancing compliance withmeasures serve as extra protection. If any of the data contained the laws regulating export of computer software and improvingin the FlexNet Producer Suite on-demand database indicates that their relationships with customers. It also allows softwarethe download should be denied—for example, the on-demand producers and high-tech manufacturers to reduce the recordservice geo-location lookup determines that an end-user claims keeping and shipping costs associated with physical distributionto be in India when they are actually in Iraq—the system will not across national borders and closer to home.allow the end-user to access the software. This is an importantand additional security layer for software producers and high- About Flexera Softwaretech manufacturers. Flexera Software is the leading provider of strategic solutions for Application Usage Management; solutions deliveringBi-Annual Reporting Requirements continuous compliance, optimized usage and maximized valueProducers using FlexNet Producer Suite on-demand service to application producers and their customers. Flexera Softwarecan transfer responsibility to Flexera Software as the Exporter is trusted by more than 80,000 customers that depend onof Record and offload the BIS required bi-annual reporting our comprehensive solutions- from installation and licensing,requirement (which can be especially burdensome for companies entitlement and compliance management to applicationselling products with varying encryption levels), for all software readiness and enterprise license optimization - to strategicallydelivered via the on-demand service. manage application usage and achieve breakthrough results realized only through the systems-level approach we provide.The on-demand export compliance service captures all For more information, please go to: www.flexerasoftware.comthe relevant reporting information and generates a report FEATURES BENEFITS Electronic Software Delivery, tracking and management Reduces record keeping and shipping costs associated with physical distribution across national borders Automated, multi-tiered system checks end-user data for each Provides fast and thorough screening of all end-users and every download download Triple checking of customer location including geo-location lookup Guards against end-users who provide false information Prohibited parties list updated daily Minimizes risk of download by end-users recently added to the BIS prohibited list Bi-annual reporting for all foreign downloads of 5D002 Reduces administrative costs, record keeping and report preparation (high-encryption) products Flexible architecture Integrates easily with any software producer CRM system, and allows Flexera Software to accommodate changes to export regulations and processes BIS confirmation of system compliance Provides additional security that software exports won’t violate the law Data warehouse with standardized and ad hoc reporting of all Allows on-demand creation of multiple business reports to track, transactions via secure extranet monitor and better understand customer activityFlexera Software: FlexNet Producer Suite White Paper Series 3
  4. 4. Flexera Software LLC Schaumburg United Kingdom (Europe, Japan (Asia, For more office locations visit:1000 East Woodfield Road, (Global Headquarters): Middle East Headquarters): Pacific Headquarters): www.flexerasoftware.comSuite 400 +1 800-809-5659 +44 870-871-1111 +81 3-4360-8291Schaumburg, IL 60173 USA +44 870-873-6300Copyright © 2011 Flexera Software LLC. All other brand and product names mentioned herein may be the trademarks and registered trademarks of their respective owners. FNS_WP_ExpCompliance_Oct11