Compliance is complying with a set of rules, which can be from a law, regulation, or company policy. The March 2020 post educates individuals on compliance, compliance risk and compliance frameworks.
Companies that export products are accountable for compliance with export regulations. In the U.S., the Census Bureau in the Department of Commerce regulates physical exports of essentially all items. Depending on the product, destination, and use, other regulations of other agencies could come into play e.g. Department of State and the Bureau of Industry and Security in the Department of Commerce. Depending on import requirements, some products may require export certificates. These regulations can be cumbersome, and for some companies, their business needs do not justify having anyone in-house trained in export regulations. What do these companies do? They rely on a third party such as a freight forwarder to provide “export services” for them. Does this make business sense? Oftentimes, yes. Does this present export compliance risk to the company? Absolutely.
There is an excellent article from a few years back “Export Liability for Freight Forwarder Issues”. The discussion of responsibility and suggestions for risk mitigation of freight forwarders providing export services on behalf of a company hold true. What has changed is that while export (including economic sanctions) regulations have never been stagnant, the pace of change and complexity of new regulations has increased since the writing of that article.
If your company exports products, check that you are providing correct information to, and oversight of, your freight forwarders. This will not only mitigate the risks of non-compliance with export regulations but will also be a mitigating factor in any penalties or other regulatory actions in case something does go wrong. If your company lacks the internal expertise in export regulations, engage with an appropriate consultant to fill your knowledge gaps and build export compliance into your day-to-day operations. The upfront effort to optimize export processes including building a solid working relationship with the freight forwarder with oversight of their services is time well spent.