How to Facilitate Legitimate Trade in Export Controls

How to Facilitate Legitimate Trade in Export Controls ARF Export Licensing Experts Meeting 17 – 18 Nov 05

Approved Company Scheme (ACS) Gives recognition to companies/ organisations with an effective Internal (Export Control) Compliance Program (ICP) Launched on 1 Nov 03

Approved Company Scheme (ACS) The need to facilitate legitimate trade among the majority of honest traders To encourage companies to develop an effective ICP to self regulate its strategic goods trade

Who are Eligible? Companies that are equipped with an effective & competent ICP to routinely screen all of their strategic goods and technology transactions

Benefits of Approved Company Scheme Serves as a recognition that a company has an effective ICP in place Credibility Enhances a company’s credibility as a responsible trading company, or business partner

Benefits of Approved Company Scheme More facilit ative declar ation proce dures Eligible to apply for bulk permits for multiple shipments Able to handle large number of transactions in a relatively shorter turnaround time

What is an Internal Compliance Program? Quality system of checks and controls to ensure compliance with the SGCA/SGCR & related domestic laws Covers controlled products, technology, or documents in which strategic goods technology is recorded, stored or embodied

Benefits of Internal Compliance Program Streamlines processes Accountability Reinforces senior management policy Better management ICP Training Discover suspicious customers/ activities

How to Develop an Effective ICP? v. The specific elements that should be included in a company’s ICP is dependent on Ø The complexity of business activities Ø The nature and size of the company Ø The strategic goods item(s) the company is/are dealing in Ø The recipient or end-user country, and the company’s relationship with the shipper(s) or consignee(s)

How to Develop an Effective ICP? Relevant corporate policies and resources Clear statement of corporate policy Commitment must be well communicated Reinforced policy statement Company’s commitment

How to Develop an Effective ICP? Responsible for implementation of ICP Senior management in-charge Establish formal lines of communication Maintain a list of control officers List should be circulated Nomination of strategic goods control officers

How to Develop an Effective ICP? Working procedures for screening Ensure each transaction have a valid strategic goods permit Process in product screening Maintain a list of strategic goods/technology Ability to check permit requirements Products screening

How to Develop an Effective ICP? End users screening Maintain prohibited/denial list Legitimate transactions Validate customers’ details

How to Develop an Effective ICP? Record keeping > 2 years for export/re-export, transshipment and transit > 5 years for transmission of technology and brokering of strategic goods and related technology Examples of records to be kept • Bulk permits • End user certificates • Export licences • Business transaction documents • Internal audit records • Internal training records • Import authorisations

How to Develop an Effective ICP? Training Conduct regular training Keep training records Discuss ways of improvement

How to Develop an Effective ICP? Audits Conduct regular internal audits Submit details of violations Internal system to notify Customs of any non-compliance promptly

Validity of ACS v. The ACS status will be valid for a period of 24 months from the date of approval

Bulk Permit v. Enable multiple strategic goods transactions v. Shorter turnaround time v. Not allowed for WMD goods and technology Bulk permits

Process Flow Form G ACS Bulk permit. Form H 1 end-user / multiple products Intra-company ICP Company/business 1 product / multiple (approved) end-users

Granting of Bulk Permit v. The granting of each bulk permit is considered on a case by case basis: Ø The merits of the trading/ business activity Ø The effectiveness of the company’s ICP v. Factors considered include Ø The nature and sensitivity of the items Ø Frequency and volume of transactions Ø Destination/end-users

Validity of Bulk Permit v. The bulk permit will be valid for a period of 12 months or upon the expiry of the ACS status, whichever is earlier

Revocation/Suspension of ACS Status v. The ACS status will be revoked or suspended if: Ø The company has violated the terms and conditions of the ACS prescribed by Singapore Customs Ø The company has knowingly exported/ diverted strategic goods and technology to UN prohibited countries and to countries or companies not approved by the supplying or exporting country

Revocation/Suspension of ACS Status v. The ACS status will be revoked or suspended if: Ø The company has knowingly export/re-export, transship strategic goods/technology destined for WMD related activities Ø The company has failed to maintain an effective ICP Ø The company has not complied with any other requirements of the SGCA or its Regulations, and other related domestic laws

Revocation/Suspension of Bulk Permit v. The Bulk Permit will be revoked or suspended if: Ø The company has violated the terms and conditions as prescribed in SGCR and by Singapore Customs Ø The ACS status is being revoked or suspended

In Summary ICP ACS Bulk Permits Audits (Compliance & Records) Retain/Revoke/Suspend

Advice to Japan Foreign Trade Council Inc v Sought Singapore Customs’ advice on compilation of comprehensive ICP guidelines on Singapore's strategic goods control, for Japanese companies v The ICP serves as valuable reference to Japanese trading companies with branch offices, subsidiaries or affiliates operating in Singapore

Conclusion Industry needs: further facilitative measures (legitimate trade) Careful balancing

Thank you