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  August 16th, 2016 | Written by

Crossborder Weapons Sales: Who’s Minding the Store?

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  • U.S. companies require suppliers and buyers to be screened.
  • U.S. export controls are mandated for any defense or national security goods.
  • OFAC enforces U.S. economic and trade sanctions.

The headlines seem at times like a James Bond, international spy-versus-spy action thriller movie description, but they are real.

Russian-born CEO Procures Millions in Sophisticated Microelectronics For Russia

Billionaire Fuels African Civil War By Masterminding Illegal Shipments Of Weapons

There are many more examples.

But all of this crossborder trade doesn’t hide behind a cloak of darkness. In the global and online marketplace, many U.S. companies are requiring suppliers and buyers to be screened to ensure export controls and other regulatory practices are in place. This is often complex and difficult without multiple levels of checks in place.

Today, U.S. export controls are mandated by the Department of State for any defense- or national security-related goods under the International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR) programs. Violating U.S. Export Control Regulations can lead to fines, imprisonment, and the denial of future export licenses. But international arms transactions need to have this level or greater, of screening to keep close guard on weapons of all types – ranging in size and type.

The Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, WMD proliferators, and other threats to the national security, foreign policy, or economy of the United States. This agency publishes multiple restricted/denied party lists and country sanctions, as well as many other governmental bodies including the European Union, Japan, Canada, Hong Kong, Mexico, United Kingdom, Australia, Russia, India, Israel, France, China, Turkey, and others.

Complying with ITAR is a difficult task with stringent requirements. A comprehensive solution automates the necessary export compliance and transactional functions including country controls, restricted party screening (RPS), license determination and tracking, document generation, and auditing. Using a configurable and comprehensive set of validation rules, the system executes a series of compliance checks to validate products against the regulations of the countries involved.

The primary steps in this process includes identifying the product and type; screening the country of destination; screen parties involved in the transaction against more than 400 lists; and maintaining documentation for audit trails and complete management reporting to promote compliant and efficient export trade processes

By automating the process, companies can keep better track of compliance by seeing automatically whether the supply-chain partner meets the requirements. Software with additional logic enables suppliers to answer questions in the process and force them to confirm the proper screening.

Compliance measures and government restrictions require companies to be diligent and thorough. The key is having the right system in place that bridges the trade compliance, sourcing and product development, and connecting all of the subsequent parties that are involved in the intricate supply chains of today. Be in the headlines for all the right reasons, and leverage technology to automate your global trade operations.

J. Anthony Hardenburgh is vice president for global knowledge at Amber Road.