An analysis of the numerous business advantages that can be gained by investing in an organization-wide trade compliance training program.

1. The Business
Advantages of Trade
Compliance Training.
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2. The one thing that any company involved in international business can
count on is constant change – the blistering pace of policy changes in
multilateral and bilateral trade agreements, the frequent sudden
imposition of sanctions and embargoes, and ever-shifting rules and
regulations on the classification of goods and services are but a few
challenges facing companies engaged in global trade today.
Another certainty is that, in order to be competitive, companies need
access to international markets, but that comes with a level of risk,
given the fluid nature of policy changes here in the United States and
abroad. These risks, however, are manageable with a well-designed,
effectively managed compliance program that includes effective training
for all personnel involved in global transactions and travel.
Let’s explore some of the specific challenges involved with international trade today, along with how they can be
addressed through a trade compliance training program that is designed to meet the specific needs of your company,
based on your industry, your people, and the markets you serve.
International Business is Increasingly Integrated
Knowing how to import and export compliantly is a business advantage.
Very few companies are 100% vertically integrated – in order to produce goods and services, most businesses require
partners, which are often in other parts of the world, and highly complex international supply chains are common in many
industries, from consumer technology to aerospace and defense to auto manufacturing and beyond. A typical
manufacturing program is not completed in one country today – a company may import components from China for
assembly in Mexico, the U.S., and the UK, with export to an engineering partner in South Korea and an end use in Israel.

3. • Department of Justice – Whistleblower Case – February 10, 2015: The Department of Justice announced that California-
based C.R. Laurence Co., Inc.; Florida-based Southeastern Aluminum Products, LLC; and Texas-based Waterfall Group, LLC
have agreed to pay $2.3 million, $650,000, and $100,000, respectively, to resolve a lawsuit brought by the United States
under the False Claims Act. (i)
• Bureau of Industry and Security – October 6, 2016: A Brooklyn resident and two Russian nationals were arrested in
connection with a scheme to illegally export controlled technology to Russia. (ii)
The downside of import and export violations is even mentioned in the political arena: Senator Olympia Snowe explains
problems that result from customs violations on April 25, 2014:
“When unscrupulous foreign exporters invent schemes to avoid paying duties it puts workers…throughout the nation at a
severe disadvantage[,] bilks our government out of millions of dollars in uncollected fees[, and] contribute[s] to the silencing of
our manufacturing industry, adding to rampant job loss and high unemployment around the nation.” (iii)
No company wants to pay out profits in penalties or have its name splashed across headlines and suffer potentially irreparable
reputational damage. Fortunately, businesses can prevent these scenarios by implementing a trade compliance program that
includes sound record retention, hardened internal processes and procedures, active internal monitoring, and comprehensive
training that meets the specific needs of everyone involved in international transactions and travel.
According to the Department of Commerce’s Bureau of Industry and Security, there are nine key elements to an effective
compliance program, and the fourth one is training. (V) The Department of State’s Directorate of Defense Trade Controls
Compliance Program Guidelines reference training as an element, vi and the Department of Justice looks at a company’s
training and/or compliance programs when determining whether a penalty is appropriate. vii Government agencies that pursue
import and export penalty cases seem to agree that a robust compliance program including training is a sound way to reduce
the risk of violations and a mitigating factor if errors still occur.
Industry studies also confirm that companies consider compliance training as essential, especially for third parties:

4. “Third parties continue to be the single biggest worry for surveyed CCOs as they conduct their risk assessments, and they
employ a range of tactics to manage third-party risks more effectively...32 percent always require training or certification.” (viii)
“Export-related training appears to be more prevalent this year than last. There is a substantial increase in training targeted by
job function for both EAR and ITAR respondents. This is encouraging since this type of training is not only specific to each
group but is ongoing and only helps to foster a culture of compliance.” (ix)
A compliance program including well-documented, auditable training will mitigate the risks of penalties and fines – and
investing in the right trade compliance training program is essential to mitigating potential penalties, fines, and reputational
damage.
A Better Return on Investment
Role-based trade compliance training provides a better return on investment.
Over the past 18 years of working with leading companies across the globe, we’ve discovered that some compliance training –
such as mandatory lectures that aim to scare employees into ethical behavior but don’t offer specific guidance – has little
practical effect. For training to be effective, studies show that employees need to be able to relate compliance training to
their job activities:
“Value is determined by the worker, not by the training department using a label like mandatory. Workers need to see the
benefits of how a training program is going to help them do their job better.” (x)
On November 15, 2013, CEB Compliance and Ethics concurred. In its survey of more than 100 compliance executives and 3,000
employees, it found that the solution to increasing training effectiveness was to focus on helping employees apply compliance
concepts to their jobs:

5. “Overall, application-focused training – particularly when targeted to high-risk employee segments – reduces employee
observations of misconduct, raises reporting rates, and creates more engaged employees willing to go the extra mile for the
organization.” (xi)
It’s important to note that not all training is equal. Many vendors offer trade compliance training today – most present a
generic “one size fits all” solution, and, this rarely works for the entire workforce across an organization. Delivering
individualized, role-based training that accounts for each employee’s specific compliance responsibilities and integrates the
organization-centric policies and procedures not only supports higher levels of engagement, it produces a strong return on
investment for the company, driving ethical behavior, creating greater efficiencies, and mitigating risk of penalties and fines in
the eventuality of a breach resulting in an investigation by a government agency.
An investment in trade compliance training can also potentially reduce turnover. A multiyear study commissioned by Middlesex
University’s Institute for Work Based Learning xii found that, from a 4,300 workers sample, 74% felt that they were not
achieving their full potential at work due to lack of development opportunities. A 2012 Harvard Business Review study (xii)
analyzed 1,200 employees and found that dissatisfaction with some employee-development efforts appears to fuel many early
exits. Udemy.com conducted a 2016 study (xiv) of 1,000 full-time office workers that stated 80% of the respondents felt
learning new skills would make them more engaged and less apt to look for a new position.
You would also note that companies that have implemented highly integrated, role-based compliance training have greater
levels of employee satisfaction and operate more efficiently than their competitors that have not. While investing in trade
compliance training is not a panacea, it is the most cost-effective way to decrease risks, reduce fines in the eventuality of a
compliance breach, drive greater efficiencies, and increase overall employee satisfaction.
If you would like to learn more about our unique role-based learning model and best-in-class library of trade compliance
training content, visit our website at www.contentenablers.com or call us at 1-518-587-2846.

6. (x) Mindflash blog - March 6, 2012, Why People Hate Training: https://www.mindflash.com/blog/whypeople-hate-training-and-
how-to-overcome-it/
(xi) Compliance and Ethics blog - November 15, 2014, Compliance Training: Make it Relevant to Employees Jobs:
https://www.cebglobal.com/blogs/compliance-training-make-it-relevant-to-employees-jobs/
(xii) Middlesex University Work-based Learning: https://www.mdx.ac.uk/courses/professional-practice-and-work-based-learning
(xiii) Why Top Young Managers Are in a Nonstop Job Hunt: https://hbr.org/2012/07/why-top-young-managers-are-in-a-nonstop-
job-hunt
(xiv) Workplace Boredom Study by Udemy https://info.udemy.com/rs/273-CKQ-
053/images/2016_Udemy_Workplace_Boredom_Study.pdf

7. 1-518-587-2846
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