Ensure International Trade Compliance and Export Trade Restrictions
With modern globalization, it is integral for many companies to collaborate with international partners. This necessitates international trade compliance with export restrictions such as US International Traffic in Arms Regulations (ITAR) ITAR, Export Administration Regulations (EAR), German BAFA, and the UK Export Control Act (ECA). NextLabs solutions protect information within the enterprise, ensuring their Export Controls are compliant when dealing with global suppliers, and restrict access to controlled information to authorized users, and provides detailed reports to demonstrate international trade compliance and support audits.
International trade compliance such as ITAR, EAR, German BAFA, and ECA impose heavy fines and penalties for inappropriate deemed export of technical data and assets.
International trade compliance apply to many different industries, and it comes as no surprise that industries such as civilian nuclear power are heavily regulated by the Nuclear Regulatory Commission. Companies in the Life Sciences and Pharmaceutical industry are also subject to export restrictions. The distinction of what is restricted for export can be complex, as seen in the published guidance from the Department of Commerce’s Bureau of Industry and Security on export restrictions for biological items. This makes it important for organizations to have a solution that allows them to automatically apply fine-grained access controls for data subject to international trade compliance.
How International Trade Compliance and Export Trade Restrictions Impact Enterprises
A proper grasp of International Trade Compliance is the gateway for enterprises and organizations to operate on an international scale. These regulations impact more than just an organization’s business transactions, but other activities such as research and collaboration. As the company grows and expands, there is an increasing need for adherence to regulations to prevent accidentally incurring penalties.
Each violation of export trade restrictions can lead to millions of dollars in fines and even jail time of up to 20 years. Besides monetary penalties and imprisonment, these violations can also lead to the debarment from all government contracts and the loss of a companies export privileges. This would restrict companies from international business opportunities.
Export Controls for Technical Data
Export-controlled technical data is any information or related data that cannot be released or transferred to foreign countries or representatives of a foreign nation, without first obtaining approval or license. “Technical Data” refers to technical information beyond general and basic marketing materials about a controlled commodity. It does not refer to the actual product or the controls that accompany it. Some examples include technical documentation for software, or blueprints, photograms, or diagrams that include technical specifications.
To transfer any of these materials internationally, it is necessary to be compliant with Export Trade Restrictions. Export Trade Restrictions have existed since the 1940s and differ depending on what export a certain enterprise may deal with. Some of the predominant regulations include the Export Administration Regulations (EAR) implemented by the Dept. of Commerce, the International Traffic in Arms Regulations (ITAR) implemented by the State Department, and the Office of Foreign Assets Control (OFAC) implemented by the Treasury Department.
ITAR, for example, is a set of United States Government regulations on the export and import of defense-related articles and services. In a global marketplace, many U.S. prime contractors are requiring their suppliers to be “ITAR compliant.”
These regulations exist as a means to protect national security interests, the unregulated transfer of technology could aid international threats and enemies of the state. These regulations do not solely apply to the purchasing and selling of products and the associated technical data but also include the collaboration of foreign partners and even non-us citizens within the United States.
How to Achieve Technical Data Export Compliance
Following regulations when exporting your technical data is only half of achieving compliance, the other half is proving compliance. This is best done by creating and keeping track of a comprehensive audit trail. This means keeping tabs on your data, including who has access to it, who has accessed it, and who it has been sent to. However, this can be difficult to manually, which is why many people turn towards automated compliance solutions.
A quality automated compliance solution will streamline your export regulation process by applying policies across the servers, applications, and workstations where technical data is managed and stored. These policies assist in controlling who can access, share and edit data in order to prevent compliance violations caused by human error.
When looking for automated Export Control solutions, keep in mind a few key aspects:
- Control access to technical data based on user citizenship, certification training, computer system, and physical location.
- Track and apply policy-based controls on technical data to control duplication, storage, copy/paste, printing, removable media, e-mail,
- Automatically match technical data export to Export Licenses or Technical Assistance Agreements (TAA).
- Create information barriers around projects, applications, and systems to prevent leakage of export-controlled technical data into uncertified systems or applications.
- Detect user activity that constitutes Deemed Export and automate the process of export license determination and/or manager approval.
Common Business Practices for Technical Data Export Trade Restrictions
Classifying your Data
If you are trying to figure out if your technical data is controlled under the U.S Export Administration Regulations, the first thing you should do is check if it has been assigned an Export Control Classification Number (ECCN). These numbers are also associated with the reason why the export is controlled and will let you know what license if any, your organization needs to apply for.
Training
Another common practice is including an export control section in your annual company training. Ensure that employees know that emailing or transferring technical data, even internally, can be considered regulation violations if the proper procedures haven’t been followed. It is also a good idea to clarify what actions and data are controlled by export regulations.
Organize your Data
A detailed data organization should also be implemented. The labeling of all technical data should be marked whether or not is deemed for export as well as whether or not it is controlled/restricted by ITAR or EAR. This should also apply to any external storage that technical data is stored on such as hard drives and USB devices. Depending on how large your organization is, it might be beneficial for your technical data labels to include which partner the data is associated with as well as its correlating ECCN classification number.
Digital Access Control
One of the best ways to avoid accidental violations is to implement an automated Attribute-Based Access Control (ABAC) solution. This access control method dictates access and privileges to data and files based on a number of attributes that could include location, nationality, and citizenship. This means that even if a foreign citizen had gained access to your cloud system, whether it be through an accidental email or link they would not be able to access these files, avoiding an accidental violation
NextLabs’ International Trade Compliance Solutions
Solution Features:
- Technical Data Export Compliance
- Program and Location-based Access Control
- ITAR (Citizenship-based) and Export License Authorization
- Safeguarding of Technical Data via Mobile and Remote Access Use to Prevent Wrongful Disclosure
- Export Compliance Reporting and Audits
- Secure Supply Chain Collaboration on ITAR Projects
- Policy-driven Controls to Avoid Conflicts of Interest and Improper Disclosure of Technical Data
- Preventive Controls to Eliminate Contamination via See-Through
Solution Benefits:
- Minimize the Risk of Inappropriate Disclosure / Deemed Export
- Automating Export Control Policies and Procedures to be in compliant with export regulations
- Enable Dual-Use Operations
- Simplify and Reduce the Cost of Export Compliance Reporting and Audits
- Educate Users on Policies and Best Practices for Protecting Technical Data
The NextLabs Export Controls for Technical Data solution enables businesses to:
- Control access to technical data based on user citizenship, certification training, computer system, and physical location.
- Track and apply policy-based controls on technical data to control duplication, storage, copy/paste, printing, removable media, e-mail, IM, Web uploads, FTP, and web conferencing.
- Prevent the leakage of technical data beyond certified systems and users.
- Automatically match technical data exports to the corresponding Export Licenses or Technical Assistance Agreements (TAA).
- Detect and track user activity that may qualify as a “Deemed Export,” as well as automate the process of export license determination and/or manager approval.
NextLabs’ Export Compliance Applications
NextLabs’ solution is a set of applications that includes comprehensive best practice policy libraries and reports required to support compliance with export regulations such as ITAR and EAR. Policy sets can be easily customized to the environment or used as templates to create new policies.
The solution allows companies to control and audit Deemed Export of Technical Data by applying policy across the servers, applications, and workstations where technical data is managed and stored. This is accomplished by leveraging Dynamic Authorization and Attribute-Based Access Control (ABAC) to protect information within the enterprise, ensuring compliance with export regulations when dealing with global suppliers. It works through restricting access of controlled information to authorized users based on certain variables. Export Control for Technical Data safeguards information within the enterprise ensures proper handling of technical data export to satisfy regulatory requirements.
The solution addresses technical data export requirements by enabling project teams to:
- Control access to technical data based on user citizenship, certification training, computer system, and physical location.
- Track and apply policy-based controls to control duplication, storage, copy/paste, printing, removable media, e-mail, IM, Web uploads, FTP, and web conferencing.
- Prevent leakage of technical data beyond certified systems and users.
- Automatically match technical data export to Export Licenses or Technical Assistance Agreements (TAA).
- Apply policy universally across data repositories and endpoints including file servers, document management, PDM/PLM applications.
- Create Information Barriers around projects, applications, and systems to prevent leakage of export-controlled technical data into uncertified systems or applications.
- Detect user activity that constitutes Deemed Export and automate the process of export license determination and/or manager approval.
- Provide a full audit trail detailing technical data access and usage to satisfy regulatory compliance audit requirements.
- Leverage best-practice policies and reports for easy and rapid deployment.
The solution actively enforces export controls by understanding the complex, business context for appropriate technical data handling and disclosure. Collaboration inside and outside the enterprise, including supply chain partners and a mobile workforce, can now be governed to demonstrate compliance with export regulations such as ITAR and EAR.
For more information on export control for technical data, read our post on Technical Data Export Control or watch the video on Ensuring Export Control Compliance with Dynamic Data Masking and Dynamic Data Segregation.
