INSIGHTS | CASE STUDY #2
US Information Security MNC
The company specialises in developing, manufacturing and trading of information security products and operates multiple distribution facilities globally, Singapore being one of them in order to meet with customers' demands. Although a significant portion of its products universe was subject to strategic trade controls (aka export controls) themselves under the US Export Administration Regulations, the company enjoyed license exemptions for its exports out from the US and hence export control licenses were not applied for then and recorded as such on its internal ERP order management system.
There was however an internal oversight when the ERP system mistakenly applied the license exemptions for all its controlled exports out from the distribution facility in Singapore over an extended time period. Under the Singapore's Strategic Goods Control Act (SGCA), the US license exemptions do not apply and require strategic goods permits (i.e. export control license) if the product itself is subject to control within the Singapore strategic goods control list.
In this case, the company unwittingly committed export control violations under the Singapore export control laws and the number of affected export shipments was significant. The company was keen to rectify the situation as soon as possible with Singapore Customs (the governing authority for SGCA).
Benefits to company: