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Do You Need an Export Compliance Program? The Virginia SBDC Can Help
January 27, 2022 Ken Click, Business Development Specialist

A recent blog post highlighted the importance of Export Compliance Programs (ECPs). These programs can be established within a U.S. exporter’s office to manage export-related decisions and transactions to ensure compliance with the Export Administration Regulations (EAR).

To support Virginia-based small businesses who are exporting and in need of this program, the Virginia Small Business Development Center (SBDC) is encouraging qualified organizations to apply to its upcoming Export Compliance Program (ECP). Aaron Miller, Director of International Business Development, and Dulce Zahniser, Senior International Trade Specialist for the Virginia SBDC were interviewed about the program.

Q: Why do companies need an ECP?

Aaron - Many emerging exporters do not know what their responsibilities are to the U.S. Government when it comes to exporting products and services overseas, or the required due diligence to become a responsible exporter. The Virginia SBDC’s Export Compliance Program (ECP) lays the foundation. It’s a six-month program with training, required deliverables, and one-on-one customized assistance that will enable companies to build their own compliance program.

Q: What’s the intended program outcome for small business participants?

Aaron - The goal is for the small business to have their own internal facing document that lays out the responsibilities of those involved in its international trade operations. The document is never complete, but it can be adjusted as their exports grow and their situation evolves.

Dulce - ECPs are always customized to a specific business. The U.S. Government doesn’t require a specific, prescribed compliance program because every company and their commercial activities are different. One size does not fit all in compliance. Companies are encouraged to put ECPs in place and these plans should be organic. They should come from within the organization so companies can look at the specific risks and responsibilities they face based on their products, markets, as well as the countries they are doing business in. Ultimately, the objective with an ECP is to make sure companies are operating their export programs within the confines of U.S. laws and regulations.

Q: What are some mistakes that could happen if a company doesn’t have an ECP?

Dulce - There are several challenges a company can face. A company may have incomplete export documentation which could result in a fine or penalties. They could incorrectly self-classify their products. The company could inadvertently sell to a foreign buyer on the Bureau of Industry and Security’s Entity List because it hasn’t conducted a know your customer (KYC) due diligence process. Trade is a porous activity, and companies could end up with a problem if they don’t know the boundaries and how to mitigate problems. An ECP keeps exporters out of trouble.

Q: How do companies apply to the Virginia SBDC ECP program and who will be leading it?

Aaron - Interested companies should complete the application form by February 5th, 2022. The ECP will begin during the week of February 14th and end in September. We want to work with existing exporters that know how their product is classified (e.g., EAR or ITAR) so we have a similar jumping off point when the program begins. Companies should be based in Virginia and have a minimum of five employees. There’s a $325 program fee for accepted companies.

Senior International Trade Specialist Dulce Zahniser will be the primary counselor. Bringing more than 20 years of international trade experience and having worked in more than 40 international markets, Dulce joined the Virginia SBDC nearly two years ago. She works with companies on international trade compliance, trade finance, free trade agreements, and a host of other technical export and import issues that small businesses in Virginia need a handle on in order to be successful exporters.

Participants will also have access to attorney Andrea Ewart, Esq. She is an experienced international trade and customs attorney and policy advisor. As an advisor to the Virginia SBDC, Andrea will provide training and counseling to the participants, and play a critical role in reviewing and providing feedback on completed client plans.

Q: Are there ECP resources for companies based in other states?

Aaron - There are certainly resources available in other states to help companies develop a compliance program. SBDCs are a great place to start and get information. Many offer similar programs or training on the topic of export compliance.

The Virginia SBDC, like many other SBDCs around the country, is part of EXIM’s Regional Export Partner Program (REPP). EXIM is pleased to work with these organizations to expand export opportunities. For more information about EXIM, please schedule a consultation with a trade finance specialist.

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EXIM’s Blog postings are intended to highlight various facets of exporting, but the postings are not legal advice, and are not intended to summarize all legal requirements associated with exporting.