Editor’s note: This is the first article in Doreen Edelman’s new monthly column, Export Compliance: It Matters.
Happy new year. Welcome to my new monthly column for Corporate Compliance Insights on global business compliance. To begin the new year, I thought we could extend the holiday season theme of “giving to others” by talking about how your compliance efforts can benefit from further sharing of your compliance responsibilities.
The beauty of sharing your responsibilities is that everyone in the company actually benefits from having more people participate in the compliance process to support your goals. I understand every company is different but it is possible to accomplish this goal without a big corporate strategy announcement that you are offloading your work to others. (Stick with me here. I think the idea really might work.)
We all are aware that compliance on any level is no easy task. It is impossible to anticipate and prevent every possible scenario that could come back to expose your company to risk and liability. Therefore, your best option is to try to affect your corporate culture in small seemingly insignificant ways that will, in turn, end up facilitating better understanding, communication and coordination of compliance efforts.
Every employee needs to feel that he/she is integral to the company’s compliance efforts and what they do will make a difference. For instance, in small companies the receptionist actually ships and receives and performs due diligence. Don’t forget to ask her how she thinks she can best add due diligence questions into her processes. If you stop and ask questions, you will be amazed at the ideas individuals will generate if they feel that you are willing to listen.
In large companies, each country or region has its own specific issues that can be best addressed locally or regionally. Find a way to involve the local employees in updating regional compliance due diligence and documentation. If your program was devised in the U.S., ask about nuances and cultural differences. Ask what locals see as the biggest obstacles to good compliance and use the information to enhance your program.
My point is don’t just consider how to add compliance into your own workday, take a moment and think about how you can add compliance into others’ daily activities and existing routines. If you can find just a few new ways to disperse responsibilities throughout the workforce, the results will improve your company’s culture of compliance and enhance your current compliance procedures.
Companies have all different types of corporate compliance programs. Those companies with the most robust programs usually are companies that have had bad experiences with non-compliance. Short of such a concrete reason to act, it is often hard to find the time, focus or support (management or financial) to concentrate on improving internal compliance. However, even small changes can make a difference.
Some examples of activities to raise internal awareness of export compliance are:
- Management can provide or update its policy statement or renew its commitment at a board of directors meeting (regulators like this board level attention).
- Have a “Compliance Minute” at corporate functions or post one on your internal website. This could be an example of something that everyone should be aware of – a change in the law, a new sanction program, another sector moving from the United States Munitions List to the Commerce Control List. The more employees you keep informed, the stronger your company’s compliance will be.
- A compliance tagline can be incorporated into your company’s compliance manual and website.
- HR can praise an employee in the company’s newsletter/intranet regarding his/her compliance efforts.
- Legal can provide a one-page update on compliance enforcement examples (“Don’t Let It Happen To You” BIS style) or recent legal changes.
- If you have foreign offices or agents, operations can ask them for examples of new issues they see locally to encourage a compliance mentality.
- Sales can coordinate updates on red flags or compliance issues to foreign offices and agents. For example, when is the last time your company discussed the anti-boycott regulations or the applicable local Foreign Corrupt Practices Act requirements and international conventions? (Okay this is not a five-minute project but you get the idea).
- Tweak your “Know Your Customer” guidelines as prosecutors are emphasizing this area of compliance (in merger and acquisition due diligence as well).
- Engage employees in seemingly unrelated departments in export compliance. For example, how about giving marketing a role? Are they aware how promotion materials and photos could violate export laws? Is human resources calling legal to edit contracts to consider the new I-129 export requirements? Is your global sales team letting you know what they are hearing in the Middle East regarding transshipment and the tightening of credit? Be creative if your management and corporate structure will let you.
- Ask to speak in cross department meetings. See what interest you can generate. You may be surprised how reaching out can solidify the corporate commitment and stimulate the entire company’s conscious thinking of global compliance. Moreover, such efforts offer the added benefit of doubling as mitigating factors if there are ever any violations. If you succeed in generating even one additional corporate compliance discussion, you have raised awareness and corporate commitment to support your day-to-day compliance efforts.
So remember this seasonal message – the best gift you can give your company is sharing your compliance responsibilities with others. Aren’t the holidays great?
About the Author
Doreen M. Edelman is a shareholder at Baker Donelson Bearman Caldwell & Berkowitz, P.C., in Washington, DC, where she helps clients create business solutions for international trade compliance. She has more than 20 years of experience developing compliance programs, and counseling clients on export licensing, export controls, FCPA, and Office of Foreign Assets Control (OFAC) sanction laws. Ms. Edelman also helps companies prepare global business plans and work through foreign government market regulations.