Many companies have systems to deal with the alphabet soup of agencies and regulations that govern the handling and transfer of products and technology in the U.S. Yet few biotechnology companies have the compliance systems necessary to handle export control risks involved in their international operations.
With over 60 companies in the biotechnology, chemical,
and equipment industry penalized in the last five
to six years, more companies are making sure they are
compliant with export regulations. Penalties for violating
export control rules include criminal charges against
companies and individuals (including jail time of up to
20 or more years) and civil penalties up to $1 million per
export or technology release. Beyond civil or criminal
penalties, companies that violate the regulations risk
being denied all export privileges. Companies put on
so-called “denied party lists” can have trouble buying
equipment from the increasing number of suppliers who
screen their customers against those lists. Companies can
also lose the ability to sell to the U.S. government.
Working without an export compliance system is,
in many ways, just as risky as not having a health and
safety compliance program. And, with some guided effort,
a good export compliance system is not difficult or
costly to implement.