Export control, a global safety issue
Globalization, geopolitical issues, rapid technological developments and the evolution of worldwide supply chains have put export control regimes at the top of the corporate agenda. It's true that their enforcement is crucial to maintaining international security, protecting human rights and halting the proliferation of weapons of mass destruction. However, this export control is complex and must be carried out in compliance with embargoes, sanctions, extra-territorial scopes and other international agreements, which are constantly evolving according to the geopolitical context. Russia's war against Ukraine, for example, led to the rapid deployment of economic and commercial sanctions imposed by international organizations and governments. Several countries have banned the export of products to Russia, while the Russians have also blocked the export of some of their strategic goods.
A significant risk
Given the complexity of national, European and international regulations in force, failure to comply can result not only in substantial fines and the cancellation of export licenses, but also in trade restrictions and even criminal prosecution, not to mention damage to an organization's reputation. So it's important to put in place a solid international trade compliance program. But to do this, you need to be able to control your trade flows, a process made much easier by a proven RegTech solution.
An ever-tightening regulatory framework
The dual-use regulation
Since the entry into force of the Dual-Use Regulation (EU) 2021/821 of the European Parliament and of the Council of May 20, 2021, the global context of export controls has fundamentally changed. As a reminder, the Dual-Use Regulation ensures that items such as advanced electronics, new technologies, toxins, missile technology or nuclear components, which have both civilian and military uses, cannot fall into the wrong hands.
A dense web of international legislation
The international legislative framework for export control is extensive: the Wassenaar Arrangement, which focuses on the control of exports of military and dual-use goods and technologies, the Arms Trade Treaty (ATT), which regulates the international trade in conventional weapons, and national regulations such as the Export Administration Regulations (EAR) which regulate exports of sensitive goods and technologies from the United States, China's Export Control Law (ECL, 2020), post-Brexit regulations in the UK, ..... calling for the utmost vigilance on the part of companies.
Implement due diligence processes to ensure compliance of business transactions
Export Control requires a comprehensive understanding of current national and international regulations. Companies need to be aware of the specific restrictions and requirements applicable to different types of goods and technologies, as well as to the destination, such as the transport of satellite equipment prohibited to certain countries. In addition, certain governments, such as Russia, may have embargoes in place. The ecosystem of business partners and their reputation is also an important factor to consider, as lists of prohibited persons and entities can change rapidly, requiring constant monitoring and adaptation of business practices. Finally, it is necessary to know how exported goods will be used once they arrive.
How a Regtech solution can help control exports
The RegTech AP Solutions IO solution offers advanced functionalities that will considerably lighten the regulatory burden. Equipped with the latestechnology, it will filter export transactions, automatically check customer and trading partner lists (KYC/KYS) to identify those subject to sanctions or restrictions, and enable the keeping of documented records, essential in the event of an audit by regulatory bodies. The sanctions lists on which they are based are constantly updated by thousands of analysts worldwide (United Nations, OFAC, EU). More agileagility in the face of a complex regulatory environment, but also greater peace of mind when operating internationally!
Would you like to know how AP Solutions IO can help you optimize your Export Control compliance policy? Request a demo.
