The FLIR Systems settlement is an extraordinary event given the sheer number of violations, the systemic breakdown that occurred, and the absence of any meaningful compliance controls. It is all the more surprising given the fact that FLIR’s operations are devoted in large proportion to the highly-regulated international defense industry market. Given the level of risk, you would expect FLIR to have in place systems to identify risks and build a robust compliance program around such risks in order to avoid a significant enforcement action.
The FLIR case, along with the recent ZTE enforcement action by the Department of Commerce, underscores the trade compliance risks facing companies in the global economy. Even for those companies that are not involved in exporting defense articles or services, trade compliance should be a high priority, just as significant as anti-corruption and antitrust risks.
Under the FLIR settlement (see documents, here, here and here), the Office of Defense Trade Controls Compliance in the Department’s Bureau of Political-Military Affairs (DTCC) insisted that FLIR hire an external Designated Official to oversee the Consent Agreement. The terms of the Consent Agreement also provide important compliance program elements that should be reviewed by all companies for their trade compliance programs.READ MORE