ITC Audits & Investigations Tahlia Townsend

Transcript:ITC Audits & Investigations Tahlia Townsend:
ITC Audits & Investigations Tahlia Townsend December 11, 2015 Regulatory landscape Genuine commitment at the top Proper oversight and independence Accurate, living policies and procedures Meaningful training Regular risk-based review, audit, and testing Meaningful mechanisms for internal reporting Prompt and thorough investigations Consequences for willful misconduct Convincing, completed & sustained corrective actions Government expectations Sentencing Guidelines Sentencing Guidelines Audits Why audit? USG expectations Risk mgmt - if it isn’t audited, it isn’t done Culture and awareness Who should perform the audit? Business or legal? Internal or external? Scope & frequency Risk profile Manageability Prevention, detection, & cure Preliminary considerations Volume of hardware exports Exports to known transshipment hubs (e.g., UAE, Turkey …) Exports to countries with high numbers of SDNs/Entity List parties (e.g., China, Pakistan, Russia, Singapore …) Sensitivity of technology (e.g., aerospace, electronics, high-tech materials, semi-conductors, nuclear-related machinery …) Volume of foreign suppliers External access to IT systems (supplier portals, etc.) Foreign subsidiaries/offices (conflicts between sanctions regimes; awareness of re-export obligations) Volume of foreign employees Mergers and acquisitions (integration, culture, successor liability) Factors Affecting Risk Level Perform under legal direction Think carefully about scope & frequency Have a written audit process & timetable Review BIS’ online EMCP Audit Module Self-Assessment Tool Document carefully Act promptly on findings Assign owners and track completion (with proof!) Create mechanisms for accountability Watch out for recidivism Tips for successful audits Internal Investigations Audit finding Employee report Third party report M&A due diligence Government inquiry, direction, subpoena, or search Data mining Competitor/whistleblower Border seizure Disclosure/other investigation How do investigations start? Determine whether a violation occurred If so: Identify who, what, when, and where of violation Determine root cause Implement corrective actions Disclose in appropriate cases If no: Document conclusion of no violation Identify and address the causes of the near-miss Demonstrate commitment to compliance Goals Who should perform the investigation? How should it be scoped? Should we disclose? Considerations Mandatory when ITAR 126.1 implicated Mitigation of penalties 15 CFR 766, Supp. 1 – “great weight” 22 CFR 127.12 “may be considered” 31 CFR Part 501 “important factor”; 50% penalty reduction (Appx A) Credit only given if submitted before USG learns elsewhere (IVD?) Failure to disclose will be considered “an adverse factor” (ITAR); “deliberate concealment” is an aggravating factor (EAR) Most disclosures result in a warning letter but no guarantee Resources, penalties & public relations risks must be weighed Whether and when to disclose Timely