Export Compliance Reviews & Assessments
Luks Cormaney LLP provides a range of services related to assessing the effectiveness and adequacy of internal export compliance policies, compliance procedures, Technology Control Plans (“TCPs”) and implementation plans for licenses and agreements in companies of varying sizes, including recommending new procedures or changes to existing procedures to increase the effectiveness of internal controls. Also, the firm has specific expertise in ensuring that export compliance policies and procedures are adapted and customized to integrate – to the extent possible – with the existing business operations of its clients. This helps ensure that export compliance procedures are observed in “day to day” business operations and do not merely sit unused on a shelf because they unnecessarily interfere with the ability of company personnel to complete their job responsibilities.
Due to the firm’s substantial experience in assisting companies with developing and implementing export compliance procedures, there already exists a large variety of models that can serve as a starting point and that can be modified to address specific issues facing new clients. This increases the cost-effectiveness of the firm’s efforts to enhance existing procedures or develop company-specific compliance procedures for new clients.
Analyzing Jurisdiction Issues
Luks Cormaney LLP provides expert guidance to clients on the issue of which set of U.S. Government regulations apply to the export of products and technical information – the controls under the Export Administration Regulations (“EAR”), which apply to civil and “dual use” items or the controls under the International Traffic in Arms Regulations (“ITAR”), which apply to exports of military and defense related items. This determination can be difficult, as many key items and technologies (e.g., aircraft parts, electronic components, etc.) fall within the grey area separating the two sets of regulations. The firm provides expert analysis of jurisdiction issues, and has substantial experience in drafting and obtaining formal determinations – called “Commodity Jurisdictions” – from the U.S. Department of State.
Obtaining & Implementing U.S. Government Authorizations
Luks Cormaney LLP provides a wide range of services to clients related to obtaining licenses and other export authorizations issued by the U.S. Government. These include export licenses of all varieties (e.g., Commerce and State licenses, including authorizations for the employment of foreign persons in the United States), Technical Assistance Agreements (“TAAs”), Manufacturing License Agreements (“MLAs”), Warehouse and Distribution Agreements (“WDAs”) and reexport authorizations. The firm is experienced in preparing such submissions that comply with the most recent guidance – formal and “informal” – from the regulatory agencies and that utilize the electronic license submission systems (“SNAP” and “D-Trade”) to ensure a timely response.
The firm also provides expert guidance to U.S. clients and the foreign parties involved in licensed transactions on how to effectively implement the requirements of such authorizations. Too often, the compliance efforts of U.S. companies after the receipt of the export approval do not match the diligence devoted to preparing the application. However, there are ongoing administrative and substantive requirements to ensure that all activities are covered under the authorization and that any changes to the scope of work or parties involved are submitted for prior U.S. Government approval. The firm has substantial experience in providing specific guidance and training on the often detailed requirements application to foreign parties under U.S. export licenses or other authorizations (e.g., sublicensing, involvement of dual/third country nationals, retransfers, etc.). This is critical to U.S. companies because, at the end of the day, a compliance issue with a foreign party will reflect on the U.S. applicant and may cause substantial delay to international cooperative programs important to all parties.
Export Compliance Training
Luks Cormaney LLP provides export compliance training for company personnel at all levels – ranging from compliance briefings for senior management personnel to in-depth, hands-on training on key issues, including: license preparation training for personnel responsible for preparing and submitting requests for licenses or other authorizations; the identification, marking and control of technical information by engineers and technicians; ensuring that contracts and shipping documents conform to regulatory requirements; exporting hardware and technical data; and controlling access to export-controlled information in computer systems. The firm has several training “modules” and standard materials that can be tailored and adapted to the specific training needs of our clients.
Mergers and Acquisitions
Luks Cormaney LLP has developed expertise in conducting pre-acquisition export compliance “due diligence” reviews. This process involve conducting interviews and reviewing key documents in an expedited manner with the goal of identifying any export compliance issues that may affect the closing of an acquisition. We also advise clients on methods to modify the terms and conditions of an acquisition or merger to ensure that the acquiring company is protected and indemnified for any costs related to addressing pre-acquisition export compliance issues.
Finally, we have worked with U.S. Government agencies to ensure that any required amendments to existing authorizations or notices are submitted in a timely manner so that the merger or acquisition does not affect or invalidate any existing export authorizations. In this regard, the firm was responsible for conducting the due diligence review of a $1 billion acquisition by a major U.S. defense contractor, prepared multiple due diligence reports, recommendations, corrective measures and voluntary disclosures to the Department of State, each of which was settled without any enforcement penalty or action.
Ownership, Control or Influence
Luks Cormaney LLP has
experience in assisting U.S. clients with obtaining facility security clearances from the U.S. Government. In particular, we have expertise in analyzing requirements related to foreign ownership of cleared
facilities. The firm provides advice to clients regarding the types of actions likely to be required to
mitigate foreign ownership, control or influence (FOCI) of a company desiring to obtain a
facility clearance. Our firm’s in-house
experience includes preparation and negotiation of FOCI mitigation instruments - such as Special Security Agreements ("SSAs") - with the U.S. Defense Security Service ("DSS"), as well as hands-on guidance to clients on policies and procedures to ensure compliance with the day-to-day requirements of the NISPOM and applicable FOCI mitigation instruments.