The defining factor between success and failure

A company supplying an article to a supply chain of a product purchased by the US Department of Defence (DoD), must be aware of the strict compliance DoD place on all export and imports. The consequences can be severe, there are no excuses and one cannot simply claim that one did not know, as it is your responsibility to know, says CEO of Elmatica, Didrik Bech.

No option for shortcuts
Compliance management in the defence industry can be the defining factor between financial success and costly mistakes. When procuring components, printed circuits or materials to the Defence Industry, there are no such thing as assuming or relying on questionable interpretations of rules and regulations. No option for shortcuts whether your supplier follow the regulations or not. You must know the country of origin down to the component, the printed circuit or material level of your products, and the Bill of Materials (BoM) should encompass a country of origin for every article. Otherwise you risk not only jeopardising your customers business, exclusion from delivering to the US market, but substantial penalties to your own company, says Bech.

The what, how, where and to whom
DFARS Subpart 225.7 prohibits all procurement of PCBs from Mainland Communist China. DFARS Subpart 225.10 and 225.003 states that foreign acquisition can only be conducted from NATO countries or allies of the United States. Any exemption from this regulation requires a deviation approval according to DFARS Subpart 201.4.

Transparency, compliance methodology and clear communication with your partners, ensures that correct information regarding what, how, where and to whom articles are produced and delivered, are addressed. We want to face the challenges of Export Control, Sanctions and Regulations, by sharing our knowledge and experience so we increase cooperation on compliance, says CEO of Elmatica, Didrik Bech.

Do not risk imprisonment
FAR, DFARS and ITAR specifically relates to defense programs of the US Government. The consequences of not following the regulations are severe. Violations of the US export control laws may lead to civil and criminal penalties of up to $1m, or twice the value of a transaction, imprisonment, administrative penalties and suspension or debarment from US government contracting.

DoD requires that a clause, mandating strict compliance with US export and import control laws and regulations, is included in all DoD solicitations and contracts. Including contracts between prime contractors and subcontractors. This requirement highlights, as we have said for a long time, the importance of close communication with manufacturers and sub-suppliers down to the tiniest part of your products to ensure compliance, says Bech.