International Nonproliferation Export Control Program (INECP) Government Outreach for Enterprise Compliance

International Nonproliferation Export Control Program (INECP) Government Outreach for Enterprise Compliance

2 Outline Elements of Effective Export Control Government Outreach to Enterprises Internal Compliance Programs Examples of International Experience

3 Effective Export Control Effective export control systems rely on three main elements - Transparent and standardized national licensing system - Enterprise awareness and compliance - Enforcement of national export controls Voluntary adherence to applicable laws and regulations by the exporting enterprises is essential - Enterprises are the first line of defense, interacting directly with buyers, and are in a unique position to prevent proliferators or terrorists from obtaining controlled commodities - Export control systems depend on exporters to act responsibly when conducting international business Government outreach promotes enterprise awareness and compliance with export control laws

4 Objective of Government Outreach Primary objective of Government outreach is to: - increase level of enterprise compliance with export control obligations To achieve this goal, government outreach programs 1) raise awareness of export control obligations and 2) assist enterprises in developing compliance systems: - Provide background on proliferation issues and the multilateral export control regimes - Explain national export control laws and regulations, including penalties for violations and how to avoid them - Train exporters on export license requirements, submission procedures, and customs clearance processes - Discuss important topics in export controls

5 Export Control Information Resources Development and distribution of information on export control topics (laws, regulations and licensing procedures) is essential to raise awareness of and compliance with export control obligations Methods for disseminating information include: - Workshops, seminars, conferences - Websites - Export Control publications (e.g. Newsletters, Government publications) Conferences are a often a first step in government outreach and are an effective way to identify enterprises and needs for further outreach

6 Outreach Workshops Government outreach is effectively accomplished through workshops - Workshops provide an informal setting to promote discussion and problem solving - Workshops bring together licensing and enforcement officials with exporters to build mutual understanding and cooperation - Workshops can also provide training tailored to the specific enterprise or institute

7 Workshop Topics Proliferation Threats International export control regimes National export control systems National and international control lists Technology controls, intangible transfers of technology Catch-all controls National export licensing process Commodity identification and classification Analysis of end use and end users Customs clearance procedures Internal compliance systems

8 Export Control Websites Websites dedicated to export control and nonproliferation issues can include resources for exporters ranging from basic export control awareness information to online license application submission Sample content includes information on: - Seminars and Trainings - Export Control Legislation and National Control Lists - Nonproliferation Regimes - Customs Control Procedures - Current News - Industry Forum with Questions and Answers - Links Websites can be hosted by government agencies or nongovernmental organizations. Some websites in INECP partner countries include: - Singapore http://www.stgc.gov.sg/stgc/index_home.jsp - Hong Kong http://www.stc.tid.gov.hk/eindex.html - Ukraine http://www.ntc.kiev.ua

9 Export Control Publications Newsletters or magazines can be very effective for disseminating information on export control to exporters on a regular basis - Articles on export control and nonproliferation issues - Summary of recent changes and developments in export control legislation, policies, regulations, and practices - Frequently Asked Questions (FAQs) - Chronological listing of recent and upcoming events related to export control such as training seminars and conferences Specialized guides on export control topics can also assist exporters in complying with their obligations - Handbooks on controlled goods and materials - Guides to exporting and export procedure manuals

10 Internal Compliance Programs An important mechanism for increasing enterprise compliance with export control obligations is the establishment of effective internal compliance programs within enterprises An internal compliance program is a set of processes and procedures within an institute or enterprise to assure adherence to national export control laws and regulations Internal Compliance Programs facilitate regulatory compliance while providing significant benefits to enterprises A common component of government enterprise outreach is information and assistance in developing internal compliance programs.

11 Benefits of Internal Compliance Internal compliance programs benefit the exporter by making it easier and faster to obtain export licenses and to comply with customs requirements - For some countries internal compliance programs are required by law - Establish reputation of the enterprise as a responsible trading partner - Avoid penalties for export violations - Streamline license submission process and reduce errors - Qualify an enterprise for general export licenses (in some countries) - Promote awareness of nonproliferation objectives

12 Elements of Internal Compliance Internal compliance programs do not need to be complex to be effective Tailored to meet the needs of the specific institute or enterprise Important elements include: - Management Policy - Clear and concise policy statement - Commitment of resources - Clear procedures and guidance - Penalties for noncompliance - Responsible Officials - Export Control Manager - Functional support people (especially contracting, and managers of international programs) - Individual employees (especially travelers, hosts of foreign visitors, and managers responsible for sensitive-subject projects) - Record keeping - Training - Awareness of export control requirements and procedures is essential any employee can be an exporter - Internal Reviews

13 Duties of Export Control Manager The export control manager is key to a successful internal compliance program - Provide expertise and current information on export control laws, regulations, and customs procedures - Assist in classification of exports - Prepare and/or review export license applications - Disseminate export control information - Maintain records - Maintain and update support tools (web site, control lists, references, software) - Coordinate export control training

14 Technology Controls All exporters must comply with export control requirements - Commercial enterprises - Government research institutes - Technology holders - Academic institutions Exporters must be aware that technology related to controlled commodities are controlled to the same extent as the commodity Exporters must be aware that transfer of technology can occur in a number of ways - Scientific and technical cooperation programs - Contracted activities - Consulting - Technical interactions - Foreign travel and foreign visits Effective internal compliance programs incorporate procedures to control technology.

15 International Experience DOE International Nonproliferation Export Control Program (INECP) partners with countries to promote export control awareness through government outreach activities Outreach activities are tailored to the specific country, circumstances and needs Activities are carried out in close collaboration and coordination with government agencies INECP s initial focus was on nuclear and nuclear related enterprises, but is expanding to include biological weapons, chemical weapons, and missiles

Example: Government Outreach Experience in Ukraine 16 Export control cooperation in Ukraine in partnership with the State Service for Export Control of Ukraine (SSECU) - Began in 1996 - Implementing organizations include Ukrainian NGO and nuclear research institutes Elements of Industry outreach - Training - Information Resources - Targeted Outreach National Export Control Law adopted March 2003 - Placed new requirements on enterprises

Example: Government Outreach in Ukraine Training 17 Conducted by Ukrainian export control experts and government officials with support from US experts Targeted enterprises are suppliers of nuclear and nuclear-related dual-use goods, nuclear power plants, and nuclear research institutes - 50 enterprises identified based on registration with SSECU - Government and non-government enterprises trained - Over 100 representatives (export control officers and staff) of the enterprises have attended workshops

Example: Government Outreach in Ukraine Training (continued) 18 Workshops on the following topics: - General export control and nonproliferation conferences - Internal Compliance Program (ICP) workshops - Commodity Classification workshops - Workshops on national legislation and industry obligations - ICP Requirements under the New Law - Responsibilities for Violations under the New Law - Workshops for nuclear technical institutes - Export Control and Internal Compliance Systems - Technology Transfers and Technology Security

Example: Government Outreach in Ukraine Information Resources 19 Website dedicated to the issues of nuclear export control and nonproliferation hosted by local NGO Content includes information on: - Export Control Legislation including National Control Lists, Laws of Ukraine, Cabinet of Ministers Decrees, Presidential Orders, International Treaties - Seminars and Trainings - Nonproliferation Regimes - Ukrainian Customs and Export Control - Current News - Industry Forum with Questions and Answers - Links

Example: Government Outreach in Ukraine Information Resources (continued) 20 Quarterly Export Control and Nonproliferation Newsletter - Articles on nuclear export control and nonproliferation - Description of the current system of export control in Ukraine - Summary of recent developments in export control in Ukraine - Relevant Ukrainian legislation, policies, regulations, and practices - Frequently Asked Questions (FAQs) - Chronological listing of recent and upcoming events related to export control

Example: Government Outreach in Ukraine Targeted Outreach 21 Under the national export control law adopted in March 2003, Ukrainian enterprises are required to have certified internal compliance systems in order to obtain certain export licenses Targeted Outreach is designed to provide internal compliance training and assistance for the development and implementation of a certifiable export control compliance system at a single Ukrainian nuclear enterprise Lessons learned working with the chosen enterprise were shared with additional enterprises through ICP implementation workshops

Example: Government Outreach in Ukraine Implementing Organizations 22 Industry Outreach is primarily implemented by the Scientific and Technical Center on the Export and Import of Special Technologies, Hardware and Materials (STC), a Ukrainian nongovernmental organization (NGO) established in 1997 to promote compliance with export controls laws and regulations by Ukraine s commercial and research enterprises - Organizes and conducts training workshops - Publishes export control information resources - Hosts export control website - Provides consulting services for enterprises on export/import issues

Example: Government Outreach in Ukraine Implementing Organizations 23 Ukraine s premier nuclear technical institutes, the Institute for Nuclear Research in Kiev (INR) and the Kharkiv Institute of Physics and Technology (KIPT) support SSECU in export control issues. - Participate in industry outreach workshops - Develop ICP software for enterprises - Perform technical analysis of proposed exports - Provide technical expertise related to Ukraine s participation in multilateral export control regimes (e.g. NSG) - Control list development and maintenance - Develop automated systems for export license review and archiving

Example: Government Outreach in Ukraine Future 24 Training - Conferences for industry, government and academia on export control developments - ICP development for technical institutes - Export control awareness workshop for biological and chemical organizations Resources - Updated website - Continuation of export control newsletter - Commentary on the new law

Example: Government Outreach Experience in the Russian Federation 25 Industry outreach began with RosAtom (formerly MinAtom) enterprises in 1996 - Two Russian export control laboratories (located in Obninsk and Snezhinsk) are trained to conduct export control outreach - Over 60 regional and site-specific export control workshops have been conducted - Over 100 RosAtom enterprises received export control training Outreach is continuing outside of RosAtom - Roughly a dozen workshops have been conducted for Non-RosAtom enterprises Future outreach is focused on the Russian Academy of Sciences, and educational institutes

Example: Government Outreach in Russia DOE - RosAtom Cooperation 26 DOE and RosAtom signed a letter of intent to cooperate in export control in 1996. Possible areas of cooperation included: - Training programs for RosAtom enterprises - Exchange of experience and knowledge in the area of nuclear export control - Facilitating development of internal compliance programs for enterprises of RosAtom

Example: Government Outreach in Russia Export Control Laboratories 27 Two Russian export control laboratories (Obninsk and Snezhinsk) are trained to support RosAtom in export control issues They conduct regional workshops that give a broad overview of export control issues - International regimes and lists - Russian laws and control lists - Licensing procedures and Customs requirements - Importance of technology Representatives of RosAtom, Ministry of Foreign Affairs, Customs and Licensing Organization are usually present

Example: Government Outreach in Russia Export Control Laboratories (continued) 28 The Russian export control laboratories also conduct site specific workshops for one or two institutes at a time. These workshops: - Target significant enterprises who are major exporters or large technology holders - Address specific material, equipment or technology held by the institute - Provide opportunity to train not only management and internal compliance personnel but also scientists and engineers - Usually have considerable discussion about reasons for export control, procedures and control of technology

Example: Government Outreach in Russia Export Control Laboratories (continued) 29 In addition, the Russian export control laboratories provide: - Support to RosAtom for technical review of proposed RosAtom Exports - Export control technical support to other RosAtom enterprises - Technical support in the national process of control list revision - Informal technical support to Customs

Example: Government Outreach in Russia Information Resources 30 INECP has worked with Russian partner organizations to provide information resources to exporters including: - Copies of all training material presented at workshops - Quarterly export control newsletter published by The Center for Export Control, a Russian NGO - Russian version of the US guide that describes nuclear dual use items (control numbers, appearance, nuclear and non-nuclear uses) - Translations of several US technology guides (gaseous diffusion guide, centrifuge guide ) - An original laser guide developed and published by Kurchatov institute Currently an updated RosAtom web site is being developed which will contain export control information

Example: Government Outreach in Russia Expanded Cooperation 31 Outreach is continuing and expanding outside of RosAtom - Private companies are being formed and international business is expanding - Non-nuclear enterprises outside RosAtom are significant holders of nuclear dual use materials, equipment and technology - Roughly one dozen workshops have already been conducted for Non-RosAtom enterprises - Outreach will expand to educational institutes. Many are affiliated with nuclear enterprises, are major technology holders and have limited knowledge of export control - Limited work with Customs at this time but cooperation is expected to expand

32 Summary Enterprises are the first line of defense in preventing the proliferation of export controlled goods and technologies Enterprises must be aware of and understand their legal obligations in order to comply with national export control laws and regulations Government outreach to manufacturers and exporters of controlled commodities and technologies can increase compliance and is therefore essential to an effective export control system