There is no doubt that the last six months have fundamentally altered the way organizations of all types think about the future, including how they set up and manage their export compliance programs and processes. Businesses across industries – from automotive, to electronics, to energy, and even professional services - have felt the disruptive effects of the coronavirus pandemic on both their customers and their own operations.
However, volatility and uncertainty are nothing new to veterans of global trade, particularly those running programs to keep in step with export control compliance requirements – regulatory change is constant and unrelenting. Case in point: even in the face of an unprecedented global pandemic, the U.S. Department of Commerce’s Bureau of Industry and Security recently published amendments to the Export Administration Regulations (EAR), impacting U.S. companies that export goods, software, and especially controlled technology to China, Russia, and Venezuela. There was also the move by Washington to end shipments of sensitive technologies to Hong Kong.
But the unique nature of the pandemic disruption – particularly it’s global scope and breathtaking speed – has had more far-reaching organizational implications. The massive impact of instantaneous market shifts and business model breakdowns has focused Senior Leadership attention on their organization’s ability (or inability) to respond rapidly to change. It has also galvanized commitment to assess and strengthen their capacity to absorb shocks, pivot focus, and rapidly re-deploy resources as necessary.
In short, it has hastened the prioritization of ‘Digital Transformation’, the long-discussed notion of leveraging technology to strengthen operational effectiveness, resiliency, and responsiveness. After years of contemplation, false-starts and uncertainty, the pandemic has moved these ideas from academic to urgent in the blink of an eye.
Disruption Is Inevitable – Be Prepared with More Resilient Export Controls
Whether catalyzed by another global health crisis, or ongoing geopolitical volatility in the form of trade wars, country sanctions, or more restricted companies and individuals, future disruptions to the flow of goods are inevitable. Successful organizations must act now to address this volatility and do everything possible to mitigate its negative impact on their business.
From a global trade perspective, here are 3 key steps to consider to increase the resilience of your export compliance program:
1. Implement proven, reliable technologies to automate key compliance activities, including Denied Party Screening.
Organizations of all sizes rely on business infrastructure platforms like ERP, CRM, and eCommerce to drive core elements of their operations. Key compliance activities – like Restricted and Denied Party Screening – can be integrated directly into these existing systems to automate the trade partner vetting process. Results can then be automatically fed back into the system to update customer or supplier records.
2. Leverage new Export Controls Workflow and Collaboration tools to enable consistency and connectivity across people and programs
Screening against denied and restricted parties is just the first step – how do you manage the research and adjudication process to ensure the results are appropriate and applicable to your business? Digital tools for enhanced export controls exist to route these results to the people who need to know, while also providing easy access to the information needed to make the right compliance decision. These tools can be configured to engage multiple individuals or departments as needed, while maintaining a full audit trail of all actions and decisions taken.
3. Establish digital repositories for critical information – including item and export control classifications, license determinations, and other key compliance activities – in the ‘Cloud’
Many organizations continue to use passive tools like spreadsheets to store and manage key details of their compliance program. Unfortunately, if these tools reside on corporate servers (or worse, individual computers) they may not be accessible in the instance of a rapidly distributed workforce. Cloud-based platforms can store and organize critical product information while also providing ‘work bench’ collaboration capabilities that allow people to work in real-time, from any web-accessible location, to keep compliance activities moving.
By leveraging these and other global trade intelligence technologies, companies can better prepare and protect themselves from future business disruptions. The time to act is now.