APPROACHES TO COMPLIANCE

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 Focusing solely on compliance with the regulations can often be a check-in-the-box exercise missing the underlying reasons why export controls and sanctions exist. Adversarial governments study laws and have learned how to circumvent them. A solely reactive and legal-based approach to compliance can cause a wide variety of risk to a company.

 A risk-based approach focuses on the risks factors inherent in conducting global trade, identifying red flags, and ensuring an organization knows its supply chain, customers, and customer's customers. 

 A threat-based approach focuses on the threats posed to industry by adversarial foreign government's, terrorist organization's, and organized crime's illicit acquisition programs. When comparing the priorities of these entities to a company's products and services, industry can allocate limited resources to critical threats and protect its people, products, services, and reputation.  

 Historically, industry and government have maintained reactive approaches to compliance and enforcement. Government enforcement is the last line of defense in ensuring compliance with export controls and sanctions; however, reactive enforcement inherently means government is responded to illegal and illicit activity that has already occurred.  

 Industry is the first line of defense in sanctions and export controls. Industry is uniquely situated to detect and identify threats, risks, and nefarious activities. By making industry aware of the threats posed by illicit acquisition networks, companies can take a proactive approach to protect themselves and international security.   

Understanding how to align limited resources to address critical risk areas affecting a company, using all methods of legal, risk, and threat-based compliance while balancing a proactive and reactive approach.