By Tom Reynolds, Export Solutions

The BIS recently published a list of seven new “best practices” to help companies improve their export trade compliance.  Specifically, these best practices are designed to help avoid the diversion of dual-use items at international transshipment points (or “hubs”).

Here are the seven best practices.

  • Pay heightened attention to BIS’s Red Flag Indicators and communicate red flag concerns internally.
  • Seek to utilize only those trade facilitators and freight forwarders that administer sound export control management and compliance programs that include transshipment trade best practices.
  • Obtain detailed information on the credentials of foreign customers to assess diversion risk.
  • For routed transactions, establish and maintain a trusted relationship with parties to mitigate risks.
  • Communicate export control classification and destination information to end-users and consignees on government and commercial export documentation.
  • Provide the ECCN or the EAR99 classification to freight forwarders for all export transactions and report the classifications in the Automated Export System (AES), if applicable.
  • Use information technology to the maximum extent feasible to augment “know your customer” and other due-diligence measures in combating the threats of diversion and increase confidence that shipments will reach authorized end-users for authorized end-uses.
It seems that this list comes up short on practical, real-world advice to help improve a company’s export trade compliance.  For example:  What – exactly – is meant by the suggestion to: “Use information technology to the maximum extent feasible”?  Does that mean a company should spend thousands of dollars on sophisticated trade compliance software?  Or simply use email instead of sending a hard copy?

Also, I wonder if some of these suggestions would better be characterized as “the bare minimum” instead of “best practices”?  For example:  If your company is not already paying attention to red flag indicators, then it’s likely you are way below what most would consider a “best practice” level of compliance.

I appreciate BIS’s intentions here, but I also question the usefulness of some of these suggestions for exporters.  To me, this list underscores the need for companies to hire a seasoned trade compliance professional to recommend the real best practices that are being followed by their competitors and colleagues today.

Tom Reynolds is the President of Export Solutions, a consultancy firm which specializes in helping companies with import/export compliance.