Export Control Reform – Are you ready?
Parts of the US Export Control Reform went into effect on October 15th, 2013. Are you ready?
The current system has two different control lists administered by two different departments, Commerce and State, and there are three primary export licensing agencies, Commerce, State, and the Treasury. A multitude of agencies – Commerce, Defense, Homeland Security, Justice, State, and the Treasury – each have authority to investigate and/or enforce some or all of the export controls, each using separate IT systems that do not intercommunicate.
Why reform? There are many reasons. In addition to streamlining the process, it is for economic reasons. The current export regulations encourage customers to source from non-U.S. suppliers when possible to avoid the U.S. licensing system. This harms U.S. manufacturers, diminishing their sales and driving up costs to the U.S. military for the same items. According to a Department of Commerce industry survey, U.S. firms estimated that U.S. firms lost in excess of $2.1 billion annually in sales due to export controls and billions more in lost opportunities to even compete for a sale.
The ongoing reforms are forcing companies to re-evaluate how they comply with these regulations. How do you currently control exports of physical goods, digital goods and technical data? Do you rely on painful manual procedures or custom programming? The ongoing export control reform is a good time to pause and re-consider your current approach. SAP GTS, with NextLabs, can help automate export compliance for physical goods, digital goods and technical data.
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