Using external audit expertise
„If resources allow, it is a good business practice to periodically utilize an outside auditor. External audits can provide an unbiased, third-party evaluation, and validation, of an organization’s overall export compliance program and practices.“
A company’s export controls (more on ICP) must be regularly reviewed for design, adequacy and effectiveness. This is because the ICP is subject to both internal and external influences. Internal influences can be changes or further development of the company’s own products as well as customers in new (crisis?) regions. Externally, legal changes such as the Dual-Use Regulation, which will be amended in 2021, or new requirements of the export control authorities (BAFA, OFAC, BIS) influence the export law assessment.
Therefore, it is recommended that the ICP is reviewed every one to three years to see if the benchmark is still correct.
Structure of an export audit
- Determination of the audit objective
- Establishment of audit criteria and legal basis
- Determination of the status quo of the ICP in the company
- Analysis of ICP and comparison with audit criteria
- Audit results
- Recommendation for action
The audit criteria are derived from the following framework:
- BAFA: Internal company export control, March 2018.
- European Commission: Recommendation (EU) 2019/1318 of July 30, 2019, on internal compliance programs for the control of trade in dual-use goods
- U.S. BIS: Export Compliance Guidelines, January 2017.
These criteria must be tailored to the company’s requirements as part of the audit. This is because the requirements in the banking sector (sanctions) are different from those in the area of military equipment or dual-use listed civilian goods.