On July 30, 2019, the EU Commission issued guidance on internal compliance programs for dual-use trade controls.1 The guidance consists of non-binding recommendations on seven "core elements" for an effective dual-use trade control internal compliance program. For each core element, the guidance sets out clear expectations for internal compliance, as well as the necessary steps for implementation. These are summarized in the table below.
|Core Element||What is expected?||Steps involved|
|Top level management commitment to compliance
||Written statement of support of internal compliance procedures:
||Drafting and rolling out a statement of commitment clearly defining the expectations and conveying the importance and value placed on compliance.|
|Organizational structure, responsibilities and resources||Organizational structure to be set out in writing:
||Defining the number of qualified persons needed to carry out these functions and creating an internal structure that enables the performance of these functions.|
|Training and awareness raising||Training to be provided to staff to ensure awareness of the applicable requirements and rules, as well as about the company's internal compliance program. This training can be in the form of external seminars, subscription to information sessions, in-house trainings, etc.||Organizing periodic and compulsory training for personnel having trade controls-related functions, as well as awareness training for all staff, including -to the extent possible - on the lessons learnt.|
|Transaction screening||Set up a process - either manual or automatic - to evaluate
whether a particular transaction involving dual-use items is
subject to trade controls. The process should address the
||Establishing a process which includes:
|Performance review, audits, reporting and corrective actions||Performance reviews and audits:
||The program must allow for random controls as part of daily operations, as well as audits covering all aspects of the internal compliance program with corrective actions.|
|Recordkeeping and documentation||Procedures and guidelines for handling the relevant documents,
their storage, record management and traceability of activities:
||The procedure must reflect applicable retention periods as set out in local law and ensure that these are respected by all personnel as well as, if possible, external service providers, by way of an adequate filing and retrieval tools.|
|Physical and information security||Physical and information security measures must be introduced to prevent unauthorized access to or removal of dual-use items.||Dual-use items must be physically secured and measures and procedures must be put in place to protect information security.|
To assist companies and exporters with the implementation of their internal compliance program as well as with the specific risk assessment for each of the core elements referred to above, Annex I to the guidance provides some practical questions with comments on best practices. Annex II sets out examples of red flags that should help companies and businesses identify and calibrate dual-use risks.
1 Commission Recommendation (EU) 2019/1318 of 30 July 2019 on internal compliance programmes for dual-use trade controls under Council Regulation (EC) No 428/2009 (OJ L205, 5.8.2019, p. 15), as amended.
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