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What is Export control compliance?

Export control compliance refers to the adherence to regulations and policies set up by governments to monitor and control export of goods. Learn more in this blog.

To ensure smooth trade between countries, various rules and policies are established by governments for import and export of goods, services and technology. Export control compliance is a similar legislation that regulates international trade to avoid legal, financial, and reputational risks.

What is export control?

Export controls are regulations, policies, and procedures established by governments to control export of sensitive goods, services, or technology that may have national security implications. These controls are designed to prevent transfer of goods that could be used for military purposes – like weapons of mass destruction, or sensitive information¹.

Why is export control compliance important?

Export control regulations are designed to protect national security interests by preventing transfer of sensitive technologies, goods, or services that could be used for military or other prohibited purposes. Non-compliance with export control regulations usually result in legal and financial penalties, including fines, imprisonment, and loss of export privileges. It could also result in delays and disruptions to business operations including shipping delays, increased costs, and loss of market access.

List of organizations that regulate export controls

1. The United States Department of Commerce, Bureau of Industry and Security is responsible for implementing and enforcing export control regulations, including the Export Administration Regulations (EAR), which governs the export of commercial goods and technology from the US.

2. DDTC (Directorate of Defense Trade Controls) is responsible to implement and enforce the International Traffic in Arms Regulations (ITAR), which governs export of military and defense-related items and technology from the US.

3. The EU (European Union) has its own export control regulations, including the European Union Dual-Use Regulation, which governs the export of dual-use goods and technology.

4. The Wassenaar Arrangement is an international agreement on export controls for conventional arms and dual-use goods and technology, with 42 participating countries.

5. The United Nations Security Council passes resolutions that impose sanctions or embargoes on certain countries, which affect international trade and export controls.

6. The International Atomic Energy Agency is responsible for monitoring the export of nuclear materials and technology, including enforcing safeguards agreements and verifying compliance with non-proliferation commitments.

7. The WTO (World Trade Organization) promotes free and fair trade by regulating international trade and monitoring compliance with trade agreements.

Laws under export controls

Some of the key laws and regulations that govern export controls are²:

Export Administration Regulations (EAR):

This set of regulations governs the export of commercial goods and technology from the US.

International Traffic in Arms Regulations (ITAR):

This set of regulations governs the export of military and defense-related goods and technology from the US.

Wassenaar Arrangement:

This is an international agreement on export controls for conventional arms and dual-use goods and technology.

United Nations Security Council Resolutions:

These are resolutions passed by the United Nations Security Council that impose sanctions or embargoes on certain countries.

European Union Dual-use Regulation:

This regulation governs the export of dual-use goods and technology from the European Union.

Essential elements of export compliance

An ECP is a written set of policies, procedures, and controls created to ensure compliance with applicable export control regulations. Based on the classification of goods, it is determined whether they are subject to export control regulations. An export control license or permit is required for certain goods as per the policies framed. Businesses must obtain these necessary licenses and permits before exporting certain goods to avoid legal and financial penalties. It is important to also be aware of countries that have trade sanctions or embargoes, and must maintain accurate records of export transactions, including export licenses, shipping documents, and transactional records.

Penalties for not complying export compliance regulations

Violators of export control compliance can be subjected to substantial fines, and in some cases, they may also face imprisonment for violating laws. Export privileges of businesses can also be revoked or suspended, preventing them from exporting goods³.

For hassle-free exports, it is important to understand all the necessary compliance based on the product category, origin and destination countries. This is where Amazon steps in and makes exports easy through its e-commerce exports program – Amazon Global Selling and international tools like Exports Compliance Dashboard and Fulfillment by Amazon (FBA).

Visit Exports Compliance dashboard to meet your documentation requirements

Easy e-commerce exports from India with Amazon Global Selling

Amazon Global Selling enables Indian exporters to reach millions of customers around the world by selling their products on Amazon’s international marketplaces. From compliance to training and from managing inventory to global shipping support, Amazon assists sellers at every stage of their journey to simplify the process of exporting from India.

Frequently Asked Questions

What are a few examples of export controls?

Export controls involve restricting exchange of licenses, embargoes, sanctions, restricted parties, classifications, and compliance programs.

How do you ensure export control compliance?

Export control compliance can be ensured through training, screening, and monitoring of restricted goods.

What is the red flag in export control meaning?

‘Red flags’ refers to potential export control violations in transactions.

Published on March 29, 2023.

Sources:
1. https://compliance.ucsf.edu/importance-export-control-compliance
2. https://www.beinformed.com/blog/what-is-export-control-compliance-and-why-is-it-so-important/
3. https://www.ucop.edu/ethics-compliance-audit-services/compliance/international-compliance/export-faq.html
4. https://www.uab.edu/exportcontrol/images/Export_Controls_elements_effective_export_compliance.pdf

Guide on export procedure and documentation

What is an export license: How to apply and documents required to start an export business in India

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*Map not to scale. The map has been used for design and representational purpose only, it does not depict the geographical boundaries of the country. These do not conform to the external boundaries of India recognized by the Survey of India.