Ensuring Export Compliance: the Importance of an Institutional Program

Whether your company is just setting up to enter the business of producing defense articles, getting into the export trade after serving the American market, or already in the trade of exporting small arms, parts, accessories, or ammunition, there is never a time too early to institute a uniform Export Compliance Program (“ECP”).

While I have represented many defense contractors and other outfits in international defense deals in my legal practice, I have only seen one such company run afoul of the regulators. This also happened to be the only outfit that sought my help after getting in trouble, instead of before, and also the only company that did not have an ECP in place when one of its employees allegedly violated export regulations. Implementing such a program became a much more expensive process for this client than would normally be the case.

Thankfully, I was blessed to be able to negotiate a Non-Prosecution Agreement (“NPA”) with the regulators on my client’s behalf, but I absolutely make no guarantee that the government would always be willing to agree to such a deal, as every company’s situation is different, and government policy emphasis changes regularly.

The most important stipulation of the NPA I negotiated successfully for my client ended up being the adoption of a robust ECP, and the submission of annual compliance reports to the government for several years. Likewise, a company already having such a program in place if a violation were allegedly to occur will certainly make investigators look more favorably on the company and increase the favorability of the outcome that could be negotiated.

At the heart of such an ECP is a well-written and comprehensive Export Compliance Manual (“ECM”), which is regularly updated by the company and reviewed by all personnel. This manual will not only provide a reference for everyone in the company to ensure that they are playing by the same rulebook and conducting the export business in a legal and ethical manner and serve as a great guide to consult before making a decision in the course of employees’ duties, but shows regulators that a company is proactive and takes seriously its compliance with the export regulations (the EAR, the ITAR, etc.), as well as sharing the goals of the regulations, i.e., preserving international peace, deterring aggression, and keeping defense articles out of the hands of terrorists.

As it so happens, Joe, the Managing Attorney of the Law Office of Joseph P. Evans, PLC, has written many, and reviewed many more such ECPs and ECMs for defense contractors, defense article exporters, and small arms importers of every size. Therefore, Joe can provide a cost- and worry-saving service to your outfit no matter whether you need to set up a program from scratch, are in the process of updating your compliance procedures, or just need an experienced and seasoned expert to review what you have.

Remember, you are in the business of freedom and helping individuals and friendly countries preserve theirs, and while the risks and penalties of mistakes in such a trade are heavy, so are the rewards, both financially and morally, for helping responsible people and peoples defend their liberty and independence from aggression!