SOURCE: marcus evans

marcus evans

February 08, 2016 13:09 ET

Utilizing Voluntary Self-Disclosure to Ensure Proper Due Diligence in Trade Regulations

Interview with Iliyana Hristev, Sr. Manager, Trade and Customs, ASML

ARLINGTON, VA--(Marketwired - February 08, 2016) - For exporters and manufacturers whose articles, services or technologies are on USML or CCL lists, the responsibility of proper ITAR and EAR compliance regulations is fundamental in avoiding costly penalties and ensuring proper execution. An overwhelming amount of classification information is still confusingly defined. As issues surrounding specially designed products and commodity jurisdiction continue, new concerns regarding recently implemented procedures are beginning to take shape.

Iliyana, Sr. Manager, Trade and Customs at ASML, recently spoke with marcus evans about topics to be discussed at the upcoming 6thAdvanced ITAR and EAR Compliance Conference:

What factors do you take into account in deciding when to submit a self-disclosure?

ID: There are several things that need to be considered as a good corporate citizen:

  • To meet government/corporate reporting obligations
  • To meet shareholder obligations
  • To meet financial goals
  • Compliance with the law

Why disclose:

  • Recognized as a mitigating factor which often results in DDTC taking no enforcement action
  • Demonstrates your commitment to compliance
  • Your program actually works to detect and correct violations
  • Nondisclosure is treated as an aggravating factor in calculating penalties when violations are discovered
  • Violations will be reported by others
  • Parties in defense transactions (suppliers or shippers) may be inclined to make disclosures
  • Electronic filing information with Customs (AES/EEI) increases the availability of information to share across agencies 
  • Competitors may seek to secure a competitive advantage or avoid a competitive disadvantage
  • Employee whistleblowers

How do you use the results of audits to improve due diligence practices?

ID: A good program will also include audits. A best practice is to conduct an internal audit every six months, along with an outside audit by a trained professional every three years.

Companies regularly use outside consultants to perform the audit. However, there are significant risks associated with such audits. The primary risk is if a possible violation has occurred, the consultant is not bound by the duty of confidentiality and the attorney-client privilege is not applicable. Thus, everything the consultant may have learned (even if incorrect) can be disclosed not only to the government, but also to competitors, shareholders or other third parties during litigation.

When you have the audit results actually implement the corrective action, change the things that are broken. These changes will lead to better compliance and ultimately the Government will be satisfied and no further investigations will be prompted.

What must be included in a disclosure report for you to deem it "thorough and well written"?

ID: Final disclosure report must contain:

  • A precise description of the nature and extent of the violation(s) (e.g., an unauthorized shipment, doing business with a party denied U.S. export privileges, etc.)
  • The exact circumstances surrounding the violation(s) (a thorough explanation of why, when, where, and how the violation(s) occurred)
  • The complete identities and addresses of all individuals and organizations, whether foreign or domestic, involved in the activities giving rise to the violation(s)
  • Export license numbers, if applicable
  • U.S. Munitions List category and subcategory, product descriptions, quantities, and characteristics of the commodities or technical data involved
  • A description of any corrective actions already undertaken
  • The name and address of the person(s) making the disclosure and a point of contact, if different, should further information be needed

Why can record keeping be difficult? Do you provide internal training to teach proper record keeping?

ID: Recordkeeping is very difficult to comply with…especially for people that are not trained export/import professionals. This can be corrected by implementing continuous training programs for employees and stakeholders on the policy, the law and the ramifications for violation. No business transaction is worth going to prison.

What do you look forward to learning about at the upcoming conference?

ID: Different approaches to VD -- other views and best practices that have been implemented in their companies. Also, explanations regarding why and why not a VD should be submitted.

Iliyana Hristev is a Sr. Manager Trade and Customs for ASML, with more than thirteen years of International Trade and Corporate Law experience. In her current capacity, she leads a team responsible for overseeing the business's compliance with U.S. export laws and ITAR regulations, contracts and legal issues as they pertain to the Company's policy. Prior to ASML, she held a similar role as Director of Export and Trade Compliance for QinetiQ North America ("QNA") and United Technologies Corporation and Woodward and received her training at Deloitte Consulting and KPMG.

Mrs. Hristev holds a JD and an LL.M. from The John Marshall Law School, specializing in International Trade and Corporate Law; and an MA in Sociology and Political Science from the University of Plovdiv in Bulgaria. She has attended multiple leadership trainings, a prestigious honor reserved for emerging company executives. 

Join Iliyana at the 6 th Advanced ITAR and EAR Compliance Conference, February 24-25, 2016, at the Crowne Plaza National Airport Hotel in Arlington, VA. View the conference agenda to check out Iliyana's panel topic. For more information, please contact Tyler Kelch, Digital Marketing Manager, marcus evans at 312.894.6310 or Tylerke@marcusevansch.com.

About marcus evans

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