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Handling Changing DPS and Traditional Export Regulations

Exports present a classic compliance challenge, especially in regard to licensure and the export of dual-use items. With Export Control Reform (ECR) and other highly complex export-related changes, shippers face a steep learning curve, and it can be a daunting task to review all of the applicable export-related laws and compliance obligations. Companies require centralized access to export compliance regulations to keep pace with the continuously changing requirements. 

Even with the complexity of exports regulations, many export-related procedures are still enmeshed in disparate and labor-intensive processes. As a result, the cost of export compliance has the potential to greatly impact the bottom line. The method that a company chooses for its export compliance strategy is of key importance. From traditional export compliance to modern Denied Party Screening (DPS), companies must deploy technology as they transact business across borders or domestically.

How Do Companies Manage Changing Export Regulations?

For the layman, it is essential to understand the basics of export compliance at only a high level, and to appreciate its importance in international trade. In the U.S., for example, key topics include the Export Administration Act (EAA), The Arms Export Control Act (AECA), International Traffic in Arms Regulations (ITAR) and Export Control Reform.  A solution is required that can keep pace with requirements and reduce the risk of exporting controlled goods. 

Market leaders are bringing clarity to compliance by merging the tasks of modern DPS and traditional export compliance via one systems provider. Smart companies are keeping an eye of the bottom line and looking to reduce risk with enhanced efficiency. The most cost-effective method to achieve these goals is through implementing systems that can handle classic export-related challenges and address contemporary DPS questions.

Leading companies are incorporating customized screening, reviewing data within ERP systems, reducing the potential of increased penalties, and are better equipped to compete in today’s competitive marketplace.

Federal Agencies Governing Exports 

The EAA

The EAA is the statutory authority for the Export Administration Regulations (EAR), which are administered by the U.S. Department of Commerce Bureau of Industry and Security (BIS). These regulations establish the framework for regulating dual-use exports including sensitive commodities, software, computers, technology and other goods. Under the EAA, exports are restricted by item, country and recipient entity.

AECA and ITAR

Like the EAA, the AECA of 1976 is involved and offers a variety of challenges for business. The ITAR implemented provisions of the AECC, described in Title 22 (Foreign Relations), Chapter I (Department of State), Subchapter M of the Code of Federal Regulations. Delving into the AEC or ITAR in-depth would take a great deal of time; however, it is important to understand that the goal of ITAR is to safeguard national security. The AECA and ITAR are somewhat ambiguous, which creates challenges for businesses that operate in the international arena. Technology or systems are required to keep pace with this dynamic aspect of export regulations as well as ECR.

ECR Simplified

To summarize ECR, the previous export control system was overly complicated and outdated. As a result, the ECR initiative was launched to modernize the system. Simply stated, the aim of U.S. ECR is to relax some specific export-related regulations, strengthen others and modernize trade. The ECR Initiative is now well underway with many items that were once on the more restrictive ITAR list moved to the Commerce Control List (CCL). As with other topics in the export control arena, ECR is a challenging and dynamic topic. Many of the moves from the ITAR to the CCL are still in queue and will require businesses to systematically review the ‘jurisdiction’ of their items.

The Descartes MK DPS™ Solutions

Descartes MK DPS™ solution provides organizations of all sizes with easy-to-use options that quickly and efficiently screen customers, suppliers and/or trading partners against a comprehensive database of international restricted and denied party lists, and offer comprehensive export compliance reviews.  Customers can tailor screening processes to fit their unique risk parameters and flag potential compliance issues for prompt resolution.

  • Descartes MK Denial.com™ – As a web-based offering, Descartes MK Denial.com delivers highly-sophisticated capabilities on-demand. Some of the largest businesses in the world use Descartes MK Denial.com to access one of the industry’s most comprehensive databases of consolidated denied and restricted parties.
  • Descartes MK Denial Web Services™ -  A separate web services option includes an Application Programming Interface (API) for integrating callable DPS screening into ERP systems, applications, business processes or to help power e-commerce solutions for transaction level screening prior to checkout.
  • Descartes MK Content™ – Our content powers global trade by streaming data into leading business applications. Our expert team of IT professionals can work with businesses to map existing fields and databases to ensure that information seamlessly powers systems via a number of electronic methods and protocols.
  • Descartes MK Bulk Screening™ – Customers are better able to expand and jumpstart new business with our advanced Descartes MK Bulk Screening. This solution can simultaneously screen thousands of customers or prospects against a selected range of denied and restricted parties.
  • Descartes MK Dynamic Screening™ – In order to ensure the highest level of compliance, leading businesses are leveraging the Descartes MK Dynamic Screening solution to screen proactively. This solution is ideal for companies with repeated sales to the same set of clients and can be used as a standard process as businesses expand and add new clients.
  • Descartes MK Denial Clearing House Service - This service provides for reviewing of customer’s Master record file screening results that produced ‘hits’ against the Sanctioned Party Lists being screened against. We will review, determine and remove any false positive ‘hits’, based upon the agreed configured parameters and provide customer with reporting details from clearing process, including true matches and records that were not able to be cleared as false positives due to insufficient information.