Why is this a risk?
Export control and international arms trafficking legislation was created by the United States in the 1970s and has now spread throughout the world. The purpose of the legislation was to protect certain exported goods and services from falling into the wrong hands. These 'wrong hands' are usually certain companies and individuals (who are typically in a sanctions list) and debarred countries. The laws are principally directed at goods that are used to prevent the proliferation of weapons and technologies, including weapons of mass destruction, to problem end-users and supporters of international terrorism. The laws also apply to goods and services that are deemed dual-use items (items that can be used in military and other strategic uses and in civil applications).
These laws place an onus on you to ensure that your suppliers are not engaging with sanctioned companies, individuals or countries.
Examples of where this risk could affect you
- One of your suppliers could be looking to move you into new markets or source your products for a particular sanctioned company, individual or country
- A supplier is engaged with a foreign and restricted market or owned by that market
- You are engaging a ship or other transport service that moves your product through restricted markets
- You are engaging a ship that is owned by a sanctioned foreign government to move your product
What sort of suppliers could be engaged in this risk area?
The suppliers that are of highest risk are those that have ties with sanctioned companies, individuals or governments, including those:
- in certain countries like Sudan, Iran or North Korea
- that procure high-risk material that is of military or dual use, or involves anything that may be used in restricted activities.
How are these risks managed?
The risks of an export-control violation are normally managed through:
- review of the company and a deep analysis of their background and ownership using a screening solution like the IntegraWatch® | Compliance Screening database
- review of the company's export control and sanctions compliance programme
- on-the-ground reviews and audits to look at the payments and ownership of the company and its customers.
Which systems and tools do we provide as part of the Supplier Ecosystem™ Initiative to manage these risks?
IntegraWatch® | Compliance Screening
IntegraCheck® | Integrity Due Diligence
On-the-ground reviews and audits