Software eases export compliance issues

Dec. 15, 2004
Coherent (Santa Clara, CA) is among a number of companies that are using an automated software system from eCustoms to ensure compliance with strict export laws designed to safeguard U.S. homeland security.

BUFFALO, NY—Coherent (Santa Clara, CA) is among a number of companies that are using an automated software system from eCustoms to ensure compliance with strict export laws designed to safeguard U.S. homeland security. Coherent, which first began working with eCustoms in 2001, recently extended its contract with the software company, which operates primarily as an application service provider and has been in business since 1981.

According to Coherent's International Trade Services Manager, Serena Lam, eCustoms' export compliance solution ensures that Coherent does not deal with people and organizations deemed by U.S. authorities as a threat to national security. Prior to using eCustoms' export compliance solution, Lam said Coherent was using a system that was akin to "pulling teeth."

"What we had before wasn't very user friendly and it was limited in its functionality, especially in generating audit reports, which is very important nowadays if you need to prove that you have an effective compliance system in place," Lam said. "With the eCustoms system, you just type in the names and 'boom', you have the results you want quickly. It's the same when generating audit reports."

According to Jackson Wood, corporate business manager at eCustoms, in recent years the United States has established tougher laws aimed at preventing the export of goods and technology to people and organizations deemed by authorities as risks to national security. This is done through the application of restricted party screening; every time a company is thinking about exporting, it has to make sure that the recipients of the goods are not on the restricted party lists that most governments have in place. For example, while lasers can be classified as both a military and nonmilitary technology, the U.S. government has consolidated many lists of companies and people worldwide that cannot use these technologies (specially designated nationals, or SDNs). And if a company is caught doing business with an SDN, they can be fined and the executives responsible for those decisions can be criminally prosecuted.

"This is an important issue for hi-tech companies especially because something quite innocuous could get a company into trouble," Wood said. "For example, if you were to go to the U.S. Bureau of Industry & Security website ( and click onto the news section, you'll find a list of companies and individuals who have been charged and fined for exporting things like car parts and sports night vision goggles. For most of these companies, having an effective compliance system in place is essential not just for adhering to the letter of the law, but also ensuring their supply chain remains moving and efficient."

eCustoms solutions include export and import documentation, electronic submissions to Customs, NAFTA management, tariff classification, Restricted Party screening, ECCN analysis, export license determination, usage audit reporting, and export license application, submission and post approval management. Each of these solutions can be integrated with clients' ERP systems, such as SAP, Oracle, PeopleSoft, Baan, JD Edwards and others, leveraging existing investments in IT infrastructure.

"There is a naivete in many industries that there is no way to automate these processes," Wood said. "But we employ a research department whose only job is to research on a daily basis state departments worldwide and update our system."

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