
The ROI of export controls and compliance software
Business leaders typically focus on increasing productivity, lowering costs, and winning clients. So what is the benefit and ROI of export controls compliance software?
Business leaders typically focus on increasing productivity, lowering costs, and winning clients. So what is the benefit and ROI of export controls compliance software?
To many, it seems like export controls and trade compliance do not inherently add value to a service or product – and they therefore regard it as a burden. After all, compliance can’t really be considered a revenue-generating portion of the company.
Those that fail to implement effective export controls and compliance programs, though, risk jeopardizing their business operations and reputations. Based on this alone, investing in compliance with export controls already makes good business sense. But there is even greater potential to be tapped: Companies that additionally introduce software into their internal compliance programs (ICP) also benefit from greater efficiency, reduced costs, and – importantly – increased regulatory compliance.
Any internal compliance program (ICP) today must be configured to cater for changing policies, legislation, technologies, and so on. It must be robust and adaptable enough to deal with uncertainty and unpredictability. Examples include dynamic changes under the former Trump administration in the US, the new sanctions regime following Brexit in the UK, and the developments under China's new trade controls.
Compliance
should be a cultural factor within a company and this is based on the visible
commitment of senior executives and management.
To
further support the cultural attitude towards compliance, regular employee
training is of paramount importance to ensure all teams are aware of their
responsibilities.
To
ensure trade does not take place with an individual or entity on one of the
restricted party lists, a compliance program must include continued screening
against all applicable, published entity lists.
To
support audits, identification of violations, and voluntary disclosures,
records should be easily accessible to support efficient and effective audits.
It is essential to define, document, and communicate corporate policies.
To
support the ongoing maintenance of a compliance program and to minimize the
risk of violations coming to light during an external audit, a company should
perform their own, internal audits periodically.
Compliance
programs must be configured to cater for changing policies, legislation,
technologies, etc. They must be robust and adaptable enough to deal with
uncertainty and unpredictability.
Software systems are a very cost-effective means of ensuring export control security without slowing down business processes.
Considering
the volume, complexity, and frequent changes of regulations in export controls across the globe, it’s virtually impossible to establish successful compliance programs
without IT support. Software solutions reduce reliance on manual processes and
therefore support companies to:
The best systems enable you to comply with all relevant regulations, mitigate supply chain risks, increase efficiency, and demonstrate due diligence to regulatory authorities.
The Export Controls software from AEB automatically checks country embargoes, critical goods and end-use, and license requirements. Including data service and ERP integration options.
Export
control compliance should be part of standard business processes and not a
separate activity. Software can support real-time, automated checks for export
license requirements, restricted-parties, and more, directly in your ERP.
Screening
all your business partner names and addresses against the sanctions lists of
the UN, EU, US, and other authorities is simply not practical as a manual
activity. Software can fully automate the process in real-time or as a batch
run.
The
kind of automation commonplace for many other aspects of global trade and
logistics is now also available to support the product classification process.
Software can support correct identification of the customs commodity codes
and/or dual-use codes.
Software
can help you answer key questions about your shipment: Are there any embargoes
in place for the country I want to ship to? Do I require a license to ship my
goods? It should also block goods shipment if a license hasn’t been obtained
yet.
Automated
data updates ensure that you are always checking against the most up-to-date
version of the sanctions lists and export control regulations.
Automatically
identify which license might be applicable for the shipment; and, produce a
full audit trail of which licenses have been used for which shipment including
decrements on value and quantity.
Implementing
an effective export control compliance program that is robust enough to cope
with current challenges and is flexible enough to facilitate future
requirements is of utmost importance in protecting your business operations and
reputation. This requires investment. And to get investment, business leaders typically need to present the ROI.
But a return on this type of investment is hard to measure. A robust compliance program is perhaps more comparable to having a good insurance policy in place. No reputable business would trade without insurance for professional liability, property, and vehicles. Similarly, no reputable business should trade without taking measures to ensure efficient export controls and overall regulatory compliance. Here are four good reasons why:
Companies
often spend significant amounts of money, time, and resources to develop their
brand image. Integrity, trustworthiness, reliability, and transparency often
form key elements of this. Unfortunately, however, it’s easy to lose a good
brand image in a very short time if the right protective measures are not
taken.
Prevention
is better than cure, as they say. Criminal fines, administrative penalties, and
costs associated with defending against enforcement actions can impose a
massive burden on a company’s finances. Effective export control compliance
programs are the best way to avoid such penalties in your company.
It’s
far better to detect potential problems and violations before the enforcement
authorities do so. If things do go wrong, your company can make a voluntary
self-disclosure (VSD) of any issues. Typically, this will lead to a government
warning letter or significantly reduced penalties.
Damage
to brand image and significant financial penalties can have a very direct
impact on the shareholder value of the company. It is extremely important,
therefore, to ensure that an effective export control compliance program is in
place to avoid such financial impacts.
More than
5,500 companies around the globe are automating their global trade, supply
chain, and logistics processes with AEB software. They can prevent legal
violations long before a delivery is made. Make global trade compliance an
opportunity, not a risk. Key trade compliance areas covered in AEB solutions include the following:
AEB's Trade
Compliance Management solutions integrate seamlessly into your ERP or CRM
systems such as SAP®, Salesforce, or Microsoft Dynamics 365. Comprehensive security for your business with always available and up-to-date software for Compliance Screening, License Management, Export Controls, and Risk Assessment.