Export Compliance for Canadian Companies

Transcription

1 supply chain & logistics Export Compliance for Canadian Companies CITT Webinar Series Date: Wednesday, October Time: 12pm EST Hosted by: Kevin Riddell, CCLP

2 Presenter Info Kevin Riddell, CCLP Director, International Logistics Tremco Incorporated:

3 Agenda Canadian export controls US Extraterritorial concerns It s not just exports Automation

4 Canadian Export Controls Export and Import Permits Act Economic sanctions Defense controls Other government agencies

5 Export and Import Permits Act Primary source of Canadian controls 2 key considerations: Export Control list (what?) Area Control list (where?)

6 Export Control List Comprehensive list of goods controlled for export Controls for various reasons: Multilateral agreements (Wassenaar, Australia Group ) Canada specific controls Partnership with US

7 What s in it? (a lot) Export Control List

8 Export Control List US origin goods special note

9 Export Control List US origin goods GEP-12 good news

10 Export Control List US origin goods GEP-12 bad news

11 Area Control List Whose on it? What does it mean?

12 Penalty Examples

13 Best Practices Check all of your products against the Export Control List Pay special attention to 5400 US origin rule Know the Area Control List Have formal processes documented Implement controls on affected products automate if possible Get executive buy in

14 Canadian Economic Sanctions UN driven sanctions (United Nations Act) Autonomous sanctions (Special Economic Measures Act)

15 Canadian Economic Sanctions 3 primary groupings: Where (though less severe than US embargos) What (i.e. Arms) Who

16 Canadian Economic Sanctions Entity sanctions

17 Penalty Example

18 Penalty Example?

19 Best Practices Know the sanctions (Education) Review your products against any product specific rules Automate your entity screening

20 Other government agencies Guidance from Global Affairs Canada:

21 Penalty Example

22 Best Practices Research possible risk what agencies control your products? Education and networking are essential get out there!

23 US Extraterritorial Concerns Export Administration Regulations ITAR Department of Treasury OFAC Don t forget FEMA!

24 Export Administration Regulations (EAR) 15 CFR Main source of export control in commerce ( dual use ) Governs not just US exports, but exports of US goods or by US technology

25 Export Administration Regulations (EAR) Read the General Prohibitions Carefully! (15 CFR 736)

26 Read This! Penalty Example

27 Penalty Example

28 Penalty Example

29 EAR Office of Antiboycott

30 ITAR US Military Goods Controls Not as wide ranging as EAR specific to military purpose goods

31 Department of Treasury OFAC Primary source of economic sanction for US government Application can be extraterritorial Can deny ALL activity with listed entity or country 2 main areas to review: Countries Entities ( SDN s)

32 Department of Treasury OFAC Application concerns US Person (Example below is 31 CFR 560)

33 Department of Treasury OFAC Country concerns Some countries are off limits i.e. North Korea don t even send a greeting card! Some countries are similar to Canada and only certain items are controlled

34 Department of Treasury OFAC Entity concerns Specially Designated Nationals This is where it gets tricky A transaction with a listed entity can be forbidden, wherever they are

35 SDN Example Penalty Example

36 Canadian example Penalty Example

37 Don t forget FEMA! Little known Forbids Canadian companies from refusing to do business with Cuba if directive came from US parent New development related to Buy American

38 2 FEMA Orders

39 Penalty Example None and lets hope this goes away! Puts Canadian subsidiaries in an impossible position

40 Best Practices Know the US rules BIS offers great free training sessions Implement controls on movement of affected items automation is ideal Automation for entity screening is a must Educate your Canadian employees and get executive buy in

41 It s Not Just Exports Diversion Deemed Export rules Sanctioned parties in country

42 Diversion What is your customer doing with your goods? More of a US concern (for now ) Good idea to follow US Red flags advice

43 Diversion Could Canada be adopting similar rules? Two recent quotes from news coverage of Streit story: A parliamentary committee is preparing to take a hard look at the export controls Canada places on foreign sales of military goods and whether sanctions and embargoes meant to stop arms shipments by Canadians have sufficient teeth the armoured vehicles were manufactured and shipped by the company's branch in the United Arab Emirates, and therefore the sale is outside of the federal government's arms export regulatory regime

44 Deemed Export Rules Delivery of technology and information related to controlled products Canada and US both control technology transfers

45 Sanctioned Parties in country Common misconception that sanctioned parties are all foreign:

46 Sanctioned Parties in country

47 Best Practices Implement a red flags education program Verify if any of your technology is controlled Screen ALL business partners, not just your exports (don t rely on my freight forwarder checks that ) Automate

48 Automation Compliance with some of the above requires automation SPL in particular cannot be handled manually Licenses and permits can be managed manually, but risky Many options: from low cost, on demand, to high cost local installation Can also act as catalyst for internal review/improvements

49 Best Practices Find the system option that fits your business (not the other way around) Review all the options Don t let it be an IT project it s a compliance project! Use the project as chance to close any existing business gaps

50 Conclusion Some common themes: Automate! Know the rules! Educate your employees! Document your processes! Get executive buy in!

51 Links to referenced articles Slide # 12 Slide # 17a Slide # 17b Slide # 18 Slide # 21 (All other images from public government web sites)

52 Q&A Feel free to contact me:

53 Register for the full program, or individual sessions. Watch live, or access the recordings as often as you like until October Current State of Transportation panel is FREE for CCLP & CITT Students (registration still required to receive login info!) To see the full schedule, learn more or sign up now, visit: