Making Changes?-Manage the Risk

The topic of last week’s post was diversification of the nodes and links in supply chains. A daunting task to say the least. In the current turbulent environment traders are looking for alternatives to help solve their logistics problems. This is a good idea. However, when discussing rates and services with a Logistics Service Provider (LSP), don’t forget compliance. While exporters bear primary responsibility for compliance, LSPs are a valuable resource. If you have already implemented an Export Compliance Program (ECP) congratulations! This will reduce the risk of changing LSPs.

Export compliance is good risk management. While risk management always gets C level attention, export compliance is often a mid-management or lower level function. Fines and penalties for violations should make export compliance a basic part of risk management.

If you are relying on your logistics service providers, or your busy shipping department, for export compliance you may be at risk. Both upper management commitment and front line training are essential parts of an ECP.

BIS (Bureau of Industry and Security) offers a number of on-line courses at no cost. Check them out under the Compliance and Training tab and get started!

Under the EAR (Export Administration Regulations) criminal penalties can reach 20 years imprisonment and $1 million per violation. A denial of export privileges prohibits a person from participating in any transaction subject to the EAR. Furthermore, it is unlawful for other businesses and individuals to participate in any way in an export transaction subject to the EAR with a denied person.

contact mitch@adhoclogistics.com for help with export compliance