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December 21, 2011 

Wassenaar Arrangement Issues Best Practice Guidelines on Internal Compliance Programs for Dual-Use Goods and Technologies

During the recent Plenary meeting of the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (WA) held in Vienna, Austria, the Participating States of the WA adopted a document encouraging exporters, including companies and academic institutions, located in WA Participating States to develop and implement export-related Internal Compliance Programs (ICPs).

The document, entitled "Best Practices Guidelines on Internal Compliance Programmes for Dual-Use Goods and Technologies" (a copy of which is provided below) states that WA Participating states should consider:
  • providing exporters with opportunities to consult on the form and content of their export ICPs;
  • encouraging exporters to to submit their draft ICPs for examination and comment;
  • implementing measures and stimuli that would encourage exporters to introduce ICPs (e.g., taking the development and implementation of an ICP into account when considering applications for licenses and revoking existing licenses, or making an ICP a condition for the granting of a general license for an exporter.);
  • taking steps to assess an exporter’s compliance with domestic export control laws and regulations, as appropriate, which may involve face-to-face consultations and/or inspection visits. 
The document also contains a number of basic and additional elements that may be included in an export ECP, depending on the organizations' structure, size and other circumstances.  The WA's Best Practices Guidelines state that the basic elements of an export internal compliance program for dual-use items include:
  1. Commitment to Compliance
  2. Structure and Responsibility
  3. Export Screening Procedures
  4. Shipment Control
  5. Performance Review
  6. Training
  7. Record Keeping
  8. Reporting and Corrective Action
Many countries encourage exporters to adopt export-related internal compliance programs. For example, the U.S. Department of Commerce's Bureau of Industry and Security has recommended that U.S. exporters implement an Export Management and Compliance Program and has issued detailed guidelines.  Japan's Ministry of Economy, Trade and Industry (METI) has been encouraging companies to establish export ICPs since 1987 and since 2003 has published on its website the names of companies that have voluntarily established ICPs, conducted self-audits, and registered with METI.

However, the WA's adoption of the Best Practices Guidelines on export internal compliance programs is significant given the number of countries that participate in the WA and the range of countries that are currently seeking membership (e.g., Mexico and India). The issuance of the WA Best Practices Guidelines will likely lead to the increased issuance and use of ICPs by exporters, particularly if governments provide meaningful benefits to exporters that voluntarily adopt and implement such programs.

While the WA's "Elements of Internal Compliance Programmes For Dual-Use Items" is a useful framework for export compliance programs, the elements do not contain a great amount of detail. Exporters should supplement the WA guidelines by reviewing export and other compliance-related materials issued by governments and non-government organizations when creating their ICPs. For example, the Nunn-Wolfowitz's Task Force Report on Export Compliance Programs (pdf), while more than 10 years old, still serves as a useful resource with respect to best practices in export compliance programs. In addition, the detailed export compliance best practices that were recently issued by the Coalition for Excellence in Export Compliance (CEEC) provide specific and practical information with respect to the various elements of export internal compliance programs.
WA 2011- Internal Compliance Programmes

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