TRADE COMPLIANCE IN THE OILFIELD SERVICES SECTOR: ASSESSING THE RISKS & CALIBRATING THE PROGRAM

Transcription

1 & TRADE COMPLIANCE IN THE OILFIELD SERVICES SECTOR: ASSESSING THE RISKS & CALIBRATING THE PROGRAM October 7, 2013 Natalia Shehadeh, Associate General Counsel for Trade Compliance Weatherford International & Dan Fisher-Owens, Partner Berliner, Corcoran & Rowe LLP 1

2 Classification Licensing Valuation Country of Origin INDUSTRY IMPORT/EXPORT COMPLIANCE RISKS Division of import/export responsibility (e.g., Incoterms) Preferential Trade Programs Application Use of agents in support of the import/export business 2

3 IMPORT/EXPORT COMPLIANCE STRATEGY Questions to help assess risk & calibrate the program: Is our equipment, software and technology classified? Are competent controls in place to ensure the accuracy of the classifications? Are Finance, Logistics and Tax aware of the commonalities and differences between goods value for accounting and customs purposes? Does a process exist for country of origin evaluation preferential and non-preferential? Is the company aware of its customer demands regarding preferential trade agreement application and internal opportunities? Are the company s customs brokers & freight forwarders aware of the company s compliance policies? 3

4 INDUSTRY EXPORT CONTROL COMPLIANCE RISKS Novel technical developments Increasing use of military technologies End-use, end-user, end-destination diligence Increase in diversion risks and related scrutiny Heightened responsibilities with distributor sales 4

5 EXPORT CONTROL COMPLIANCE STRATEGY Questions to help assess risk & calibrate the program: What is the company s export & reexport control licensing outlook? Are we aware of the company s latest tech developments? Are we asking vendors for the export control classification of procured items, technology and software? Do we have a process for evaluating deemed exports and reexports? How are end-user, end-use and end-destination risks evaluated, by whom and at what point in the transaction? Has the company had compliance failures in the EUD space? Do we sell to distributors? 5

6 INDUSTRY SANCTIONED COUNTRY & PARTY COMPLIANCE RISKS Volatile geographic environments & increase in multilateral sanctions Competing bilateral sanctions programs & related conflicts Increasing indirect sanctioned country risks Venezuela, Turkmenistan, Angola, Oman, Azerbaijan, Pakistan, China, South Korea, Vietnam, UAE all countries with sanctioned-country dealings Transshipments Daily sanctioned party additions Growing money laundering risks 6

7 INDUSTRY SANCTIONED COUNTRY & PARTY COMPLIANCE RISKS Questions to help assess risk & calibrate the program: What is the nationality of our company? What sanctions regimes comprehensive and partial apply? How are we managing indirect sanctions and transshipment risks? What screening mechanisms (i.e., manual or automated or both) are in place? Have we considered the prevalence of denied and restricted parties in our industry? Did we manage past temporary sanctions programs well (i.e., Libya)? 7

8 INDUSTRY SANCTIONED COUNTRY & PARTY COMPLIANCE RISKS Questions to help assess risk & calibrate the program: Are we in partially sanctioned countries (e.g., South Sudan)? Is the company aware of all concession owners/lessors/participants in its project Have the downstream beneficiaries of the extracted resource been identified? Is the supply chain free of sanctioned-country nexus or taint? Does it need to be 100% sanctions-taint free? Does our company employ sanctioned-country nationals? 8

9 INDUSTRY ANTIBOYCOTT COMPLIANCE RISKS EAR and IRC jurisdiction Still active in our sector Increasing requests from non-irc countries: Bangladesh Pakistan Continued difficulty with local law compliance requirements in IRC countries 9

10 ANTIBOYCOTT COMPLIANCE STRATEGY Questions to help assess risk & calibrate the program: Jurisdictionally, are we subject to the EAR and the IRC? Do we have controls in place to review and respond to boycott requests? If not, who is best able to handle this contracts, legal, logistics, all? If subject to the IRC is tax preparing the Form 5713? 10

11 Coalition for Excellence in Export Compliance MISSION: Identify and recommend export compliance best practices that provide practical guidance to better detect and prevent violations of law. Specifically, reevaluate the Nunn-Wolfowitz report, identify gaps, and update with a deeper dive into global best practices with published standard. PARTICIPANTS: James Bartlett (fmrly. NorthropGrumman) Carol Fuchs (GE) Aaron Gothelf (GE) Jahna Hartwig (Sikorsky) David Hayes (UK Consultant) Doug Jacobson (Jacobson Law) John Pisa-Relli (Accenture) Jeff Merrell (Rolls Royce) Phil Poland (DHL) Stephanie Reuer (Boeing) Jeff Schwartz (Alston Bird) Natalia Shehadeh (Weatherford) Scott Sullivan (Flowserve)

12 Thank you Natalia Shehadeh & Dan Fisher-Owens 12