ILMA Compoundings April 2017 - 17

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with an ever-branching network of connections around the globe. Since our
beginnings 75 years ago as a division of Jacob Stern & Sons, those relationships
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because we believe what we do makes a difference - to each other, to our
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ate data combinations and lists) and dealing with reported
results must be detailed and tested. Information must be
distributed to all the correct persons (internal and external)
in a manner and at a speed that will truly prevent a prohibited sale or delivery. Training records must demonstrate
successful enactment of the protocol, including appropriate
resolution of a hypothetical sale or shipment where a restriction was notified in the process.
The second part of the tangibility requirement is that it
must produce a tangible result. This means that the operation of the policy and procedure in "real time" must
demonstrate that all the related parties to each actual transaction are, in fact, appropriately screened and evaluated, and
that alerts to potential restrictions are properly and timely
resolved without infraction. If alerts of Denied Parties or
other restrictions to the transactions (applicable embargo
or other sanction) never or infrequently occur, or if false
positives frequently occur, the methods used in the screening
process must be evaluated. Under the new guidance, it will
be important for each seller/shipper to demonstrate that the
entire practice is sound and effective.
The "measured" component means that not only are
the results and effectiveness measurable, they are also
truly measured. Using the same example of Denied Party
screening, the entire compliance practice must be evaluated
for its effectiveness in producing results. If alerts are never
experienced, then the screening parameters must be vetted.

Perhaps the search threshold is too high. The same is true if
false positives are common. The results might be accurate
in each case, but the company records need to reflect the
measurements and the resulting improvements.
This example carries over to import/export, export
controls (including third-party compliance management)
and anti-bribery compliance as well. In each case, the same
tangibility concepts of design impact and demonstrated end
result must be shown. The "measurement" aspect in these
other areas is just as critical as it is with Denied Party screening, but it can be significantly more difficult and complex.
HOW MUCH IS ENOUGH?
DOJ does not offer advice concerning the frequency and ratio of measurement. It simply expects your data to show the
effectiveness of your practice. This involves the perspective
of effectiveness at assuring compliance, and it also includes
the perspective of evaluating the quality of effectiveness
based on changing circumstances, available technology and
new trends in prohibited conduct. Suffice it to say that the
standard will change with the context and all the variables in
flux. The frequency of your measurement and effectiveness
evaluation must keep pace.
Eggenschwiler is an international trade attorney
and director of Global Trade for Redstone Group LLC.
He can be reached at 614-923-7472 or
jeggenschwiler@redstonegrp.com.

http://www.acme-hardesty.com

ILMA Compoundings April 2017

Table of Contents for the Digital Edition of ILMA Compoundings April 2017