Netherlands: Export Restrictions Part V: What elements should an export compliance protocol at least contain? - Boels Zanders
When exporting goods from the Netherlands to countries inside and outside the European Union (EU), national and international rules, legislation, export controls and customs formalities apply. This is something you may have to deal with as an entrepreneur. But what exactly are export restrictions, to whom do they apply and why is it important to be aware of them and to act accordingly? That is explained in this blog series.
The intention of our blog series is to inform you as an entrepreneur about the reasons and the necessity for awareness of possible export restrictions and the prevention of problems in your company when acting contrary to these restrictions. An effective compliance protocol can help.
In the previous blogs, we have already extensively discussed what is meant by export restrictions, the organisations to which they apply, the consequences of violating the legislation and the usefulness and necessity of export compliance. In this final part, we examine the specific contents of an effective export compliance protocol.
Basic elements of export compliance protocol
Export compliance is the active enforcement of and compliance with national and international legislation. An export compliance protocol contains specific management measures for an organisation to ensure compliance with legislation and contains procedures to ensure that all risks are covered.
It reduces the risks of violation of legislation. In addition, an export compliance protocol can be used to demonstrate to the competent authorities that a company is sufficiently compliant.
A good export compliance protocol contains certain basic elements. These basic elements and what they mean are discussed below.
1. Commitment to compliance: dedication to complying with legislation.
It is important that the protocol focuses on the position of management. The management of an organisation must let it be known that the organisation is dealing with export control and that there are risks involved. It is up to the management to make the employees aware of these risks and to give them specific instructions on how to reduce them. This creates awareness within the organisation.
2. Structure and responsibility
In an export compliance protocol, one or more persons are given responsibility for export control. In addition, there must be someone who is responsible for monitoring compliance with the protocol and keeping track of legislative changes. It is important that a protocol contains a clear description of the company structure and the division of tasks.
3. Export screening procedure
One of the most important parts of the protocol is the screening of the procedure used for the export of goods. There are three steps that must be followed:
This means that the company can classify goods itself and thus determine whether they are subject to a licensing requirement. This classification applies not only to goods, but also to technology and software, for example. The company can also identify any sanctions or sensitive destinations and knows where to find and consult the relevant legislation.
Screening of recipients, end-users and end-use
A protocol must describe how the company screens recipients, end users and other relevant parties. There should be a checklist of signals that raise issues or red flags, as they are called.
Screening of distributors
When supplying distributors, the company must build in procedures to ensure that the distributors are also compliant. A company’s responsibility does not extend to the distributor, but to the end user.
4. Checks prior to export
Prior to the actual export, it must be checked whether all aspects of the implemented procedures have been correctly followed.
5. Staff training
As mentioned earlier, awareness of export control must be present throughout the organisation. The way in which employees are trained and inducted is part of the protocol.
6. Audits, reporting and improvement measures
To check whether compliance is properly implemented, a company must carry out an internal audit at least once a year, ideally periodically and by an independent (external) party.
All export-related documents must be retained in accordance with the statutory period of seven years. The archives must be retrievable at all times by the competent authorities.
As a company, it is important that you are compliant and meet the applicable legislation. In the case of international business, this is important when exporting goods and services. An export compliance protocol can offer a solution. In this blog series on export compliance, we have tried to provide you with more insight into the usefulness and necessity of a policy in this area.
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