Building Comprehensive Compliance for Cross-Border Supply Chains Under Export Control Laws and Regulations

Abstract

The tightening of export control regulations has laid the groundwork for unprecedented requirements around cross-border supply chain compliance. The traditional approach of conducting a static review of the parties directly involved in a transaction will not address the systemic challenges posed by the expansion of regulatory tentacles to the farthest reaches of the supply chain. Ultimately, the core of penetrating compliance lies in rethinking the logic of compliance governance, expanding the subject of compliance from individual corporations to all players in the entire chain, broadening the object of compliance from item control to end user/user verification, and shifting compliance from post-review to ongoing monitoring throughout the entire process. This framework relies upon penetrating due diligence during the admission phase, embedding compliance nodes in the circulation phase, and tracing the flow of end processes. Operational guidelines, collaborative management entities and information tracing systems provide operational support for penetrating compliance.