International Armoring Corporation Export Compliance Program Updated and Revised April 2019
International Armoring Corporation (hereafter referred to as “IAC”) main business is to convert and armor passenger vehicles. Nearly all of its sales are for exports and is therefore subject to export regulations set forth by the U. S. Department of Commerce Bureau of Industry and Security (BIS).
IAC has established this Export Compliance Program to ensure compliance with current export regulations.
Why an Export Compliance Program?
For reasons of national security, the United States Government has asked exporters to provide the following information about their exports:
- WHAT is the product?
- WHERE in the product going for its final destination?
- WHO is the end-user of the final product?
- WHY is the product being used for, or for what reason?
Section 1: Key Terms.
BIS: Bureau of Industry and Security of the U. S. Department of Commerce. Enforces export compliance laws.
EAR: Export Administration Regulations. The export rules set forth by the BIS.
End User: The person or entity that will be using the armored passenger vehicle, or the client.
Export: A shipment going out of the United States. Exports may include software and proprietary information such as schematics, research, or source code.
Export Compliance Officer: The IAC employee(s) responsible for IAC’s export compliance.
ECCN: Export Control Classification Number. Used to determine where the product is controlled within the EAR.
Export License: An official document provided by the BIS giving IAC permission to export its final products.
NLR: No License Required. Notification given by the BIS that no export license is required for a particular vehicle or product.
Re-export: A shipment of U. S. origin items from one foreign country to another foreign country. Example: Seller A in the U. S ships product to Buyer B in Nigeria, who then ships same item to Unknown C in Saudi Arabia.
RWA: Return Without Action. This occurs when the BIS has rejected an application for an export license due to a need for more information regarding the end-user.
SNAP-R: The online system where export licenses can be requested and where notification from the BIS is received.
Section 2: IAC products and their general export license requirements.
IAC exports a variety of products ranging from NIJ Level III (National Institute of Justice standard 0108.01, September 1985) armored passenger vehicles to armoring kits and general automotive parts. The following table should be taken as a general “rule of thumb” but is not a comprehensive list. If in doubt, ASK QUESTIONS and consult the BIS and the Export Compliance Officer.
|Armored vehicles produced outside of the United States.
|Armored vehicles sold to US domestic end-users.
|Armored vehicles with weaponry modifications.
|Laminated ballistic glass.
|Ballistic steel (AR500).
|Low to mid-level armored passenger vehicles (NIJ Level III-A)
|Armored passenger vehicles to Level NIJ III and higher.
*Specific end-users and country of destination restrictions may apply*
Section 3: IAC Export Compliance Protocol.
The following section outlines the steps IAC and its Export Compliance Officer(s) will take to unsure that IAC meets the BIS export administration regulations.
- Export Compliance Officer(s) and Training.
- IAC shall assign at least ONE employee to be the company’s Export Compliance Officer. Any employee(s) assigned such responsibility shall enroll in and attend a “Complying with U. S. Exports Controls” seminar presented by the BIS. New Export Compliance Officers should attend a seminar with the closest possible dates of presentation. Additional attendance to other BIS training seminars is not mandatory, but it is recommended.
- The current Export Compliance Officer is to train newly-assigned Export Compliance Officers on how to access and use the SNAP-R, how to determine if a product requires an export license, how to file an application for an export license, and how to gather and process all required documentation.
- The Export Compliance Officer shall also train the IAC Management and sales representatives on necessary export compliance procedures.
- IAC Export Compliance Program.
- The IAC Export Compliance Officer is responsible for the drafting, revision, and enforcement of an export compliance program within the company.
- In the event of an external export compliance audit, the export compliance officer should submit a copy of this export compliance program to the authorities for their review.
- The export license application process.
- Step 1: Coordination between Sales Representatives and Export Compliance Officer.
- When a Sales Representatives determines a client, or potential client, is ready to purchase an IAC product, the client’s name and contact information must be submitted to the Export Compliance Officer for review. If the client is not the end-user and is brokering the sale, then the client must provide the name and contact information of the end-user as well. If a company or other entity is to be the end-user, the company/entity name must also be submitted for review.
- The above-mentioned names, business, or entities are to be cross-checked by the Export Compliance Officer with the Denied Persons List. The Denied Persons List can be found at export.gov. It is also known as the Consolidated List. The Export Compliance Officer must take care to cross-check all variants of name spelling and addresses.
- If the broker and/or end-user are found in the Denied Persons List, the sale CANNOT proceed. If the broker and/or end-user are not on the list, the sale may proceed, BUT…
- …..it is HIGHLY recommended that the Sales Representatives finalize all armoring/product details BEFORE the export license processing takes place and BEFORE manufacturing of the vehicle begins. WHY?
- Filing an export license application requires that all armoring and extra modifications be detailed within the export license application. Remember, WHAT are the armoring/extra modification and WHY is the end-user requesting such items?
- The Sales Representative and, if necessary, the Export Compliance Officer must inform the broker and/or end-user that the vehicle MAY NOT be re-exported to a different county or end-user. The end-user cannot export or re-sell the product to any other entity.
- Step 2: Applying for an export license.
- The Export Compliance Officer must now consult the EAR to determine if export restrictions apply and if an export license is necessary. If in doubt, file an application for an export license anyway. Also remember, vehicles with Level NIJ III and higher, and vehicles with any weapons racks, weapons modifications, etc. will ALWAYS require an application for an export license.
- The Export Compliance Officer may then access the SNAP-R and proceed to process the application for an export license. The Export Compliance Officer must remember WHAT, WHERE, WHO, WHY.
- Applicant Reference Numbers on the application are usually files with the following nomenclature: “IACXXXX” where “XXXX” is the IAC vehicle number. The application has to be re-filed for the same vehicle, the nomenclature follows as such per re-application: “IABXXX”….IADXXXX….IAEXXXX.”
- Multiple vehicles of the same make/model and armoring/modification level being sold to the same end-user DO NOT need individual export licenses.
- HOWEVER, vehicles of differing make/model and armoring modification level need their own specific export licenses.
- Documents to be submitted with the application usually include: 1. A Letter of Assurance form the end-user that states an understanding of vehicle usage and reexport restrictions. A copy of this letter should be kept in the IAC vehicle file.
- Import/End-user Certificate such as the Bill of Sale and vehicle title. A copy of the vendor and end-user signed title should be kept with the IAC vehicle file.
- IMPORTANT: The Export Compliance Officer MUST verify that the vehicle title is signed to the end-user and nobody else.
- Step 3: Post-application status.
- Within a short period following the submission of the application for an export license, the BIS will usually respond with the following:
- Export License: The process is now complete and the finished vehicle(s) may be exported without further delay. A copy of the license should be printed and kept with the IAC vehicle file and a copy should be provided to the shipper/freight forwarder. The vehicle then needs to be shipped BEFORE the export license expires. Any number of vehicles of the same make/model and armoring/modification levels specified within the export license may be exported to the end-user before the expiration date.
- RWA: The BIS has determined that there is a deficiency in the export license application. The BIS will ask for the necessary information to be submitted. In the meantime, the vehicle MAY NOT be exported until the application is re-submitted and the appropriate export license granted.
- RWA-NLR: The BIS has deemed that no export license is required for the specified vehicle, destination, or end-user. Vehicle may be exported without further delay.
- Step 4: Necessary record-keeping and follow-up.
- Before the vehicle is shipped out, the Export Compliance Officer must ensure that the following documents are included in the IAC vehicle file:
- A copy of the Letter of Assurance.
- A copy of the vehicle Bill of Sale.
- A copy of the vendor and end-user-signed vehicle title.
- A copy of the export license or RWA-NLR advise.
- A copy of the shipper/freight forwarder Bill of Lading.
- In case of an external audit or investigation, these documents must be readily available. These documents should be kept for a minimum of 5 years. Remember that the BIS also keeps records of the licenses it has granted.
iii. REMEMBER: Export licenses last for a period of four (4) years. If a client (end-user) desires another vehicle of the same make/model and armoring package, said vehicle may be exported without the need for a new license as long as the license has not expired.
Section 4: Simplified Export Compliance Flow Chart.
Section 5: Banned countries, export violations, and self-disclosure.
UNDER NO CIRCUMSTANCES may IAC export to a broker, entity, or end-user located or with the intent on re-exporting any IAC product to the following countries:
The mentioned countries have been listed by the United States Government as Terrorist Supporting Countries. Also, in light of recent developments with narcotics trafficking, special care and due diligence must also be taken when exporting any products to Mexico.
If any IAC employee has discovered that a product was shipped without the necessary documentation, has been re-exported, or has been located within a banned country, the Export Compliance Officer must:
- Meet with and notify the CEO of the export violation.
- Disclose the violation to the BIS.
- Actively participate with the BIS in the audit and provide necessary documentation.
- Assure the BIS that the necessary changes will be implemented and enforced.
- Revise the IAC Export Compliance Program.
- Train fellow Export Compliance Officer(s) and other employees on the new changes to export compliance policy.
In the event that a broker or end-user willingly re-exports the product with or without given notice to IAC, IAC MUST report this violation to the BIS. IAC self-disclosure of any export violations shows the BIS that IAC is willing to cooperate and conduct business within the existing law. While the self-disclosure of violations may still result in penalties, the BIS has shown to be very cooperative in reducing the penalty incurred upon export regulations violators who have willingly disclosed violations to the BIS.