Export Compliance: University vs. Corporate World

April 2015

Meet Jeff Sammon

Director of Export Compliance

Traliance: You are currently in the midst of an exciting career change, shifting from a major U.S. university to a major U.S. defense company. Previously, you held key international trade compliance leadership roles in the defense and aviation industry. What are the key differences in the trade compliance challenges that companies versus universities face?

Jeff: There are several big differences between academia and industry, first being that academia is primarily seeking to further mankind’s knowledge of a particular topic, versus make money. There is also a concept of “academic freedom.” That is, the freedom for faculty members to pursue ideas without being told what to do and how to do it by the administration. Additionally, there is a significant difference in structure of the overall organization. Corporations are very structured with a more defined chain of command, whereas academia is more fractured with a looser chain of command. Not to mention the export control regulations – there are different exemptions and exceptions that apply to each.

Traliance: You’ve been instrumental in building the export controls compliance program at a major U.S university. To be truly effective, an export controls compliance program must be sustainable. This is likely on your mind as you prepare to transition out of your current role. What are your thoughts on the secret to establishing lasting compliance processes?

Jeff: First of all, compliance is a team effort! To have a successful lasting program you need buy-in at all levels and in every function of the university or company. A compliance program cannot rest on one person; the one person can spearhead it and be the “guiding light” but that person cannot be the only person who handles all day–to–day compliance issues.

I think the ideal program is arranged such that the routine issues (e.g., restricted party screening, identifying potential licensing needs, etc…) are handled by the operational departments, while the compliance manager handles the exceptions (e.g., investigating restricted party matches, processing licenses, etc…) The compliance manager or team guides the other departments towards robust compliance.

Traliance: Export control regulations are complex and touch almost every function in a large organization. Given your experience in both environments, what do you think are the top factors for driving successful collaboration and support for organizational – wide compliance in both industry and higher education?

Jeff: Regardless of the organization, you need both top down and grass roots support for the program. If the top leaders do not view export compliance as important and provide a drum beat to their teams, the compliance program will not get very far. Likewise, if you have top down support, but your day-to-day operators see export compliance as a roadblock to their daily operations, the program will not get very far. One group can help influence the other to demonstrate the importance of export compliance. Ideally, both populations get onboard quickly and are eager supporters to drive a solid compliance program!

I also believe it’s imperative for the export compliance personnel to be a facilitator of business and research growth – not a roadblock! The compliance manager needs to be customer-focused and make compliance easy (i.e., “Do you want fries with that?” type attitude). This is accomplished by openly accepting feedback on how to best embed the requirements into the business. The result will be an improved process resulting from a team effort… which leads to an enhanced overall compliance program.

“Successful compliance processes facilitate business growth and help advance research”

Traliance: What are the top two regulatory areas that you’ve seen organizations struggle with in regards to international trade compliance? Why do you think these areas are more challenging for organizations to handle?

Jeff: The two areas I have seen organizations struggle with are 1) OFAC and EAR integration and 2) the fundamental research exclusion. The first one, FAC and EAR integration, covers situations where two government agencies are involved with a single transaction. For example, needing to obtain an OFAC license to travel to an embargoed country, while needing an EAR license to take equipment and support items. Often times people outside of export compliance do not understand how approval is required from two U.S. government agencies just to do activity X in country Y. A solution to this issue is driving proper awareness and training with the specific targeted population within the organization.

The second regulatory area is the fundamental research exclusion (FRE). The explanation provided by National Security Decision Directive 189 seems clear on the surface, but it is just gray enough to cause confusion. I think so many organizations struggle with the FRE because the line between fundamental research and proprietary research is not a bright white line. So compliance leaders are left to define and defend that line for their own organization. Additionally, it is quite possible for a research project to contain both fundamental and proprietary research! This is where the export compliance professional really needs to work with the researcher to document and understand the implications of that bright line.

Traliance: What advice would you give to those contemplating a career shift from industry to higher education, or vice versa?

Jeff: If you are moving from industry to higher education be prepared for a downshift in speed of the operations, but not the workload! Because higher education does not have month–end, quarter – end and year–end profit requirements, the pace of the operation can be slower. However, you will still have last-minute requests to ship something. (Thorough education on the requirements can alleviate this.) Higher education is also structured completely different from industry as there is a concept of “shared governance” in academia. The faculty input is taken seriously by the administration. Because of this framework, many decisions are made through committees that take more time to come to consensus. Additionally, you should be prepared to be a one-person team or part of a very small team of fellow export professionals.

If you are shifting from higher education to industry, the overall pressure to get things done in a short amount of time will be greater due to the profit-driven culture. Industry comes with its own level of bureaucracy with matrix reporting structures and, at times, the sheer size of the organization.

Traliance: Given the various trade compliance roles you’ve held, what do you see as essential traits for trade compliance professionals to foster in their own career growth?

Jeff: The top three traits that I have seen in successful trade compliance professionals are:

  1. Customer–focused. That means figuring out how to make compliance as painless as possible. Consider what the business is already doing to eliminate duplication of efforts.
  2. Follow–through . Possess the willpower to say, “I do not know, but I will find an answer and get back to you.” Then, follow up with the person who was asking the question. Do not guess or provide an “easy” answer. In any regulatory compliance field, one cannot guess, and the easy answer may not be the best path forward for the organization.
  3. Operate tactically and think strategically. Learn to comprehensively handle the day–to–day workload, while also looking ahead at what the institution or business is going to need beyond a particular daily task.

Who We AreTrade Compliance Services

Traliance provides export controls consulting services for research universities and technology companies. Our focus is on the implementation of practical solutions that drive robust export controls compliance. Our services are based on a unique blend of knowledge in U.S. export controls regulations, scientific research, and business process improvement methodologies. We bring valuable experience from working with universities, non-profits, and companies of all size that span a range of industries and sectors (including satellites, drones, aerospace, advanced materials, chemicals, underwater, medical, and SaaS.)