International trade transactions must comply with a complex set of international, national, and local laws and regulations. [1] Compliance programs help ensure transactions meet all regulatory requirements to avoid penalties like sanctions or loss of export privileges. [2] Effective compliance requires in-depth knowledge of regulations and how they impact business, a framework to systematically manage compliance, and operational integration into business processes with the right people and tools. [3] Software can help track regulations, screen transactions, and manage licenses to systematically keep transactions compliant.

1. International Trade & Compliance
dr. Richard Hoff
3 juni 2012

2. The compliance challenge
$
Bank A Bank B
Importer Exporter
goods/ information
2

3. The compliance challenge
licenses sanctions &
export
AML/ CFT embargoes
controls
$
Bank A Bank B
registration
& licenses
Importer Exporter
goods/ information
export taxes &
international
controls anti tariffs
law
corruption
sanctions &
embargoes
3

4. International complexity
every trade transaction is governed by a
different set of rules…
4

5. What would you expect?
5

6. However, from practice….
the compliance officer/ department:
prevents business
does not understand business
needs to fix ad hoc issues, TODAY!
always asks for too much budget
business overrules?
does compliance add value?
6

7. Business case for compliance
Distortions supply Bad performance Reputation risk,
chain towards OEMs, market position,
suppliers, … financial loss,…
Non-compliance
with EU, US and Delays in licensing Black listing, excluded Legal risk,
local sanction & procedures, from access to export business
export control laws suspension, controlled items, export continuity,…
and regulations debarment, non- privileges, banking
payment
Prosecution under
criminal, Legal costs, claims,
administrative or reputational loss,…
civil law
7

8. Drivers for compliance
laws & regulations
enforcement
reputation
supply chain demands
banks are starting to ask questions
cost of non-compliance
8

9. Compliance takes position…
9

10. Example conversation
This deal means a
great opportunity
Did we check all
regs & licenses?
Come on! We need
this one!
But we need to
make sure that…
My people tell me
that it is OK
And if we don’t do it our
competitors will
We’ll go for it. Next
item.
10

11. The compliance challenge
how can my organization export
be certain that our trade compliance
transactions meet all framework &
regulatory requirements? organization
how can I be sure that this
transaction
specific transaction can be
due diligence
executed?
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12. What is needed to comply?
superior knowledge of regulations (& why)
full understanding of:
business processes
the way risks & regulations impact business
a system to get a grip on a complex and
changing ‘universe of transactions’
a positive business culture (& why)
the people to do it
12

13. Compliance arena
people
regulations
input/ business business output/
transaction process process transaction
culture
keeping track of license management training
regulations, red flags product classification risk analysis
list management transaction screening reporting
employment checks communication post-transaction
13

14. Software system as KSF
people
regulations
software system: ‘E&E’
– track regulations – screening, alert handling
– list management – license management
– product classification – transaction due diligence
input/ business business output/
transaction process process transaction
culture
14

15. Compliance has position!
knowledge
regulations
the way risks & regulations impact business
clear framework
fit with business culture
operational compliance
right people
adequate support
connected with business processes
15

16. The next step…
identify key risk areas/ trade transactions
export compliance framework, including
role of compliance
implement concrete measures with a view
to the 5 key elements
operate
16

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