Cornell Dubilier Marketing, Inc. - CDE · Web viewCornell Dubilier Marketing, Inc. Date: July 1, 2010. 1.2 - Management Commitment Policy Statement. A critical success factor for

CORNELL DUBILIER MARKETING, INC.

EXPORT MANAGEMENT COMPLIANCE PROGRAM MANUAL

JULY 2010

CORNELL DUBILIER MARKETING, INC.EXPORT MANAGEMENT COMPLIANCE PROGRAM

Table of Contents

1. Introduction and Management Commitment 1.1 Statement of Corporate Policy 1.2 Management Commitment Policy Statement

2. Risks Assessment 2.1 Definition, Terms, Acronyms 2.2 Export Regulatory Agencies 2.3 Export Controls 2.4 Types of Export Authorization 2.5 Business Flow Chart, Vulnerability and Controls, Responsibility

3. Cornell Dubilier Marketing Export Control Procedures 3.1 ECCN Classification 3.2 Embargoed Countries 3.3 Proliferation Concern and Denied Parties List Review 3.4 Antiboycott Israel 3.5 Export Shipment 3.6 Record Keeping 3.7 Export Control Statements

4. Training on Compliance Procedures

5. Foreign Nationals

6. Internal Compliance Monitoring

7. Voluntary Disclosure

Page 2 of 42May 2023


1.0 - Introduction

The objective of this Export Management and Compliance Program (EMCP) is to ensure that our company’s exports, deemed exports, reexports, transfers, and activities are transacted consistent with the Export Administration Regulations (EAR). Various departments have a role in the management of our export transactions and compliance with U.S. export laws and regulations. It is this company’s expectation that each employee understands the standards described and the importance of creating a synergistic system to manage the overall export responsibilities. A vital part of an EMCP is the establishment of mechanisms within the company’s daily operational procedures that provide checks and safeguards at vulnerable points of the system. Such checks and safeguards help to ensure that the right questions are being asked to preclude making shipments that are contrary to U.S. export controls, and therefore inconsistent with this company’s best interests.

An EMCP soundly implemented, coupled with good judgment, can greatly reduce the risk of inadvertently exporting to a restricted end-user, or exporting for a prohibited end-use or activity.

To ensure the integrity of this system, individual feedback and suggestions for strengthening the procedures are encouraged. For questions and to send feedback and suggestions related to the EMCP procedures, please contact: Linnea Cvirko, Import/Export Control Office, x316 or Kelly Holliday, FTZ Manager, Alternate Export Control Manager.

The official, hard copy of this EMCP Manual will be maintained in the Export Control Office and will be updated and distributed annually every September. Also, the EMCP may be found posted on our company intranet site at www.file-server1/cornell/default.com Updates made prior to September will be distributed and posted as they become available.


http://www.file-server1/cornell/default.com


Organizational ChartLink to MQ


Jim P. KaplanGeneral Manager

Linnea CvirkoExport Control Officer

Kelly Holliday – Alternate Export Control Officer

Pam ClementsAccounting

Tom CrumptonManufacturing

Phil WhitmireQuality

Ken ThomasEngineering

Raymond StameyMechanical Design Engineer

Cindy EvansPlanning & Logistics

Sam ParlerResearch & Development

Sam ParlerDesign & Process Engineer KVX

Richard MintzFacilities

Randy LesleyMIS

Judy GillespieHuman Resources

Trent BatesTraining Director

Rex EasterlyInside Sales


Identifying Personnel and Tasks

Where possible, the organizational structure of the company has centralized the key export functions and coordinated export activities with other departments that may become involved in export-related issues (e.g., legal counsel, credit, shipping or contracts).

All efforts were made, where practicable, to assign export responsibility separately from the sales function to prevent a conflict of objectives.

Each export control task has a specific person assigned to perform the task and a specific person who is responsible for assuring that it is performed. Personnel assigned export control functions have been given authority commensurate with their responsibilities.

Formal lines of communication between the key personnel and others with export-related functions have been established. Generally, typical responsibilities that our company wants to assign to compliance personnel include, but are not limited to, the following:

1. Day-to-day management of the Export Management and Compliance Program;2. Assessing the risk associated with export transactions;3. Maintaining and distributing the EMCP Manual, including any compliance-

personnel changes;4. Developing and implementing export-control and compliance training to ensure

all employees related to export functions are knowledgeable about export law and our company’s compliance policies and procedures;

5. The license process and procedures – handling all export related transactions from before sale to after shipment, including jurisdiction and classification of all company products, screening parties and activities regarding transactions, and monitoring compliance of license conditions;

6. All foreign national employees related to deemed export issues;7. Maintenance of all export records, including shipping documents, and

correspondence related to exports.8. Internal and/or external audits/assessments of a company’s export management

and compliance program; and9. Handling, reporting, escalating, and taking corrective action regarding compliance

problems and violations.

A compliance program is only as good as the personnel responsible for implementing that program. It is our Management policy to foster a culture where export compliance positions are valued, professional career positions in the company.

Compliance personnel must have a working knowledge of export control laws and regulations and be able to competently ensure a company’s compliance through the



effective management of its export management and compliance program. Export compliance positions should have sufficient authority and discretion vested in them to garner the necessary respect to ensure compliance. Personnel given export control functions should have authority commensurate with their responsibilities, including the authority to stop export transactions when export control questions arise. Compliance personnel must be able to see beyond the immediate economic bottom line, to the long-range legal implications that a company risks by not instituting an effective export management and compliance program. Compliance personnel must not only posses the ability to discern the right thing to do but, most importantly, have the internal fortitude to do the right thing, on a daily basis.

While the actual number of designated export-specific personnel will vary based upon available resources and expertise, our company must establish a system of checks and balances.

1.1 - Statement of Corporate Policy

The following statement by Jim Kaplan, President of CDM is intended to convey CDM’s clear commitment to export its products and know-how in compliance with all applicable U.S. export control regulations. This statement is being distributed to all relevant personnel. The statement will be updated and reissued as needed.



Statement of Corporate PolicyExport Control

Cornell Dubilier manufactures, purchases (domestically and by importation), and exports goods and services to customers throughout the world.

Because many exports from the United States are controlled or prohibited for strategic, nuclear, chemical/biological proliferation, missile technology proliferation, political reason and because of shortages, it is essential that all personnel are familiar with and exercise the controls appropriate to their work.

Any failure to comply with export regulations may result in suspension, limitation or revocation of export privileges of the company or its individual customer consignees.

Under no circumstances will exports be made contrary to United States export regulations. For example, no transactions are to be accepted from firms or individuals listed in the table of Denial Orders, Debarred Parties, and Designation National, or to any firms owned or associated with these entities.

It is the responsibility of each department manager to be familiar with the classifications of the products handled by their respective departments.

Classifications are made under:

(a) Department of Commerce, Bureau of Export Administration(b) Department of State Office of Defense Trade Controls

Violations or possible violations of these regulations that come to the attention of an employee should be reported to the Export Control Officer or me immediately.

Willful failure to comply with company policy with regard to export control can lead to immediate dismissal. Failure to comply with the applicable laws could lead to corporate and/or individual civil and criminal liability.

If there is any doubt regarding a transaction, put the transaction on hold and refer the matter to the Export Control Officer or myself and we will see that the issue is resolved consistent with company policy.

Jim Kaplan, PresidentCornell Dubilier Marketing, Inc. Date: July 1, 2010



1.2 - Management Commitment Policy Statement

A critical success factor for CDM is our ability to establish an infrastructure capable of serving our customers. A key element in this infrastructure is CDM’s ability to export products while complying with U.S. export control laws and regulations. To achieve compliance with U.S. export control laws and regulations, CDM has developed an export management and compliance program, which is formulated to assure that CDM exports and reexports are not made contrary to company policies and procedures and the Export Administration Regulations.

Export compliance is the responsibility of all CDM personnel. CDM is committed to export compliance by ensuring that compliance is an important aspect of our corporate culture and that the requirements and disciplines to comply are integrated into every employee’s job related to export and our business processes. It is expected that CDM employees and contract personnel will be trained in the requirements, policies, and procedures to ensure CDM compliance to prevent even inadvertent violations.

Penalties can be imposed on both businesses and individuals for violating U.S. Export Regulations. These may include partial or complete denial of export privileges, civil penalties (fines) and/or seizure of equipment. Criminal penalties for willful violations of U.S. Export Regulations may include fines of up to $1,000,000.00 and imprisonment for up to a period of 20 years. These sanctions are defined in Section 764.3 of the Export Administration Regulations.

Any employee having reason to suspect the legitimacy of a transaction or concern that a violation of the United States export regulations has occurred or is about to occur is required to report their concerns immediately to a member of the Export Control Officer at x316 or CDM Management.

It is important to remember that compliance is the responsibility of every CDM employee. Therefore, any questions regarding export compliance and how it impacts your specific job, questions concerning the legitimacy of a transaction or any violations or possible violations should be immediately reported to the Export Control Officer, Linnea Cvirko, x316.



2.0 - Risks Assessment

The U.S. Government uses export controls as a way to limit and track military products and technology as it leaves the United States. Some of the reasons the U.S. Government maintains control over military hardware and technology are:

To ensure national security of the United States and its allies. To promote the foreign policy agenda. To protect human rights. To combat terrorists and countries sponsoring terrorism. To inhibit proliferation, or wide-spread use, of weapons of mass destruction.

Export controls serve an important role as the first line of defense against foreign aggressors.

2.1 - Definitions, Terms, and Acronyms

The terms used to describe exports, export regulations, export law, etc. is complicated and can be difficult to understand. The following definitions provide an outline of some of the more common terms:

AECA: Arms Export Control Act

Commodity Jurisdiction: The State Department, Office of Defense Trade Controls (ODTC), will provide, upon written request, a determination whether an article or service is covered by the United States Munitions List. It may also be used for consideration of a re-designation of an article or service currently covered by the United States Munitions List (USML). Requests shall identify the article or service, and include a history of the product’s design, development and use.

Defense Article: Includes any weapons, weapons system, munitions, aircraft, vessel, boat or other implement of war; any property, installation, commodity, material, equipment, supply or goods used for the purposes of furnishing military assistance or making military sales; any machinery, facility, tool, material, supply or other item necessary for the manufacture, production, processing, repair, servicing, storage, construction, transportation, operation or use of any other defense article or any component or part of any articles listed above, but shall not include merchant vessels, major combatant vessels or as defined by the Atomic Energy Act of 1954, source material, by-product material, special nuclear material, production facilities, utilization facilities, or atomic weapons or articles involving restricted data.



Defense Service: Includes any service, test, inspection, repair, training, publication or technical or other assistance or defense information used for the purpose of furnishing military assistance or FMS but does not include military education and training activities.

Exemption: Relief from the securing of an export license or other written approval from the Office of Defense Trade Controls to export defense articles or defense services.

Export: The transfer of technical data can take place through a variety of media including telephone or direct conversations, fax or telex transmissions, computer links via direct connection or modem, and the like. These all represent “exports” and must be covered by an appropriate export license or exemption.

Department of Commerce - The term “export” means (for purposes of the Export Administration Regulations):(a) An actual shipment, transfer, or transmission of goods or technology out of the United States;(b) A transfer of goods or technology in the United States to an embassy or affiliate of a controlled country, or(c) A transfer to any person of goods or technology either within the United States or outside of the United States with the knowledge or intent that the goods or technology will be shipped, transferred, or transmitted to an unauthorized recipient.

Department of State - Export means, for purposes of the ITAR:(a) Sending or taking a defense article out of the United States in any manner, except by mere travel outside of the United States by a person whose personal knowledge includes technical data; or(b) Transferring registration, control, or ownership to a foreign person of any aircraft, vessel, or satellite covered by the U.S. Munitions List, whether in the U.S. or abroad; or(c) Disclosing (including oral or visual disclosure) or transferring in the United States any defense article to an embassy, any agency or subdivision of a foreign government (e.g., diplomatic missions); or(d) Disclosing (including oral or visual disclosure) or transferring technical data to a foreign person, whether in the U.S. or abroad; or(e) Performing a defense service on behalf of, or for the benefit of, a foreign person, whether in the United States or abroad.(f) A launch vehicle or payload shall not, by reason of the launching of such vehicle, be considered an export for purposes of this subchapter. However, for certain limited purposes, the controls of this subchapter may apply to any sale, transfer or proposal to sell or transfer defense articles or defense services.

U.S. Customs - An export is considered to have been “attempted” when the merchandise is placed in the “export stream” (e.g., has been delivered to the carrier at a port of export in a manner indicating “intent to export” or has been delivered to a freight forwarder with instructions to transport it to the international carrier, etc.). At that point, the goods are



subject to detention or seizure if export documentation is not in order.

ITAR: International Traffic in Arms Regulations

License: License refers to a document bearing the word “license”, issued by the Director Office of Defense Trade Controls, or his authorized designee, permits the export or temporary import of a specific defense article or defense service controlled by the ITAR.

This definition generally applies also to export licenses issued by the Department of Commerce, Bureau of Export Administration.

Manufacturing License Agreement (MLA): An agreement (e.g., contract) whereby a U.S. person grants a foreign person an authorization to manufacture defense articles, abroad and which involves or contemplates (a) the export of technical data or defense articles or the performance of a defense service, or (b) the use by the foreign person of technical data or defense articles previously exported by the U.S. person.

Basic Marketing Information: Information that relates to the general function, purpose, or generic system descriptions of defense articles as well as information generally available in the public domain.

Person:

Department of the Treasury - Any individual, corporation, company, association, firm, partnership, society, or joint stock company.

Department of Commerce - A corporation, partnership, limited partnership, association, company, trust, or any other kind of organization, situated, residing, or doing business in the U.S. or any foreign country, including any government or agency thereof, as well as a citizen or national of the U.S. or any foreign country.

Department of State - Person means a natural person as well as a corporation, business association, partnership, society, trust, or any other entity, organization or group, including governmental entities. If a provision of this does not refer exclusively to a foreign person or U.S. person then it refers to both.

Re-export or Retransfer: The term ‘re-export’ in the Export Administration Regulations (EAR), or in any license, order, or export control document issued there under, includes re-export, transshipment, or diversion of commodities or technical data from one foreign destination to another.



The written approval of the Department of State must be obtained before reselling, diverting, transferring, transshipping, or disposing of a defense article in any country other than the country of ultimate destination as stated on the export license or on the shipper’s export declaration in cases where an exemption is claimed under the ITAR.

Technical Assistance Agreement (TAA): An agreement (e.g., contract) for the performance of defense services or the disclosure of technical data, as opposed to an agreement granting a right or license to manufacture defense articles.

Technical Data:

Department of Commerce - Technical data means information of any kind that can be used, or adapted for use, in the design, production, manufacture, utilization, or reconstruction of articles or materials. The data may take a tangible form, such as a model, prototype, (models and prototypes are controlled both as technical data and as commodities), blueprint, or an operating manual (the tangible form may be stored on recording media); or they may take an intangible form such as technical service. All software is considered technical data.

Department of Defense - Classified or unclassified information of any kind that can be used, or adapted for use, in the design, production, manufacture, repair, overhaul, processing, engineering, development, operation, maintenance, or reconstruction of goods or munitions; or any technology that advances the state of the art or establishes a new art in an area of significant military applicability in the United States. The data may be tangible, such as a model, prototype, blueprint, or an operating manual, or may be intangible, such as a technical service or oral or visual interactions.

Department of State - Technical data means, for purposes of the ITAR:(a) Classified information relating to defense articles and defense services;(b) Information covered by an invention secrecy order;(c) Information which is directly relating to the design, engineering, development, production, processing, manufacture, use, operation, overhaul, repair, maintenance, modification, or reconstruction of defense articles. This includes, for example, information in the form of blueprints, drawings, plans, photographs, instructions, computer software and documentation. This also includes information that advances the state of the art of articles on the U.S. Munitions List. This does not include information concerning general scientific, mathematical or engineering principles. (ITAR, 120.10)

Ordinarily, under the ITAR, unclassified information that provides only a description of the defense article and its general characteristics and expected performance does not constitute technical data. Further, information which does not exceed that normally included in sales brochures or marketing data sheets or similar products, readily available to the public (including competitors) at trade shows or other public events, normally does



not constitute technical data within the spirit and intent of the ITAR.

The Office of Defense Trade Controls has stated in public forum that a reasonable ‘rule-of thumb’ which companies may use in helping evaluate’ whether or not information is technical data, for licensing purposes, is whether or not the company would readily provide the information to a competitor.

Temporary Import: Temporary import means bringing into the United States from a foreign country any defense article that is to be returned to the country from which it was shipped or taken, or any defense article that is in transit to another foreign destination. Temporary import includes withdrawal of a defense article from a customs bonded warehouse or foreign trade zone for the purpose of returning it to the country of origin or country from which it was shipped or for shipment to another foreign destination.

Imports of defense articles into the United States are normally regulated by the Department of Treasury. However, the Department of State also regulates imports of defense articles if the article is being returned to the United States under the authority of a temporary export license (DSP- 73) or if the article is brought in as an in transit shipment or temporary import.

United States Munitions List (USML): Those articles, services and related technical data designated as defense articles and defense services pursuant to sections 38 and 47(7) of the Arms Export Control Act (22 U.S.C. 2778 and 2794(7)). Such designations are made by the Department of State with the concurrence of the Department of Defense (ITAR, 121.1 and 120.2).

2.2 - Export Regulatory Agencies

Exports from the United States are regulated by a wide variety of agencies. Each agency has its own set of regulations governing the exports that they control. CDM with their current product line is primarily concerned with the following:

U.S. Customs and Border Protection (CBP): U.S. Customs and Border Protection serves as a gateway agency for both imports and exports. Although they are primarily concerned with goods coming into the United States, they also regulate some export activity as well. U.S. Customs acts as an administrative and enforcement extension for other agencies like the U.S. State Department, ATF, and DEA.



U.S. Department of State (DoS): The U.S. State Department – Directorate of Defense Trade Controls is primarily responsible for licensing the export of sensitive military equipment, technological hardware, and related technical data. In some cases, they license the import of these items as well. The U.S. State Department has final authority to allow CDM to export military products and technology to foreign customers.

U.S. Department of Defense (DoD): The U.S. Department of Defense acts as a resource for the U.S. State Department. The DoD assigns specialists to review defense articles and technical data being licensed for export when it is outside the scope of the DoS licensing officer’s experience and knowledge. The DoD’s recommendation is often the basis for the DoS to allow the export of military hardware and technical data.

Other Government Agencies and regulations that apply to exports from the United States include:

Office of Foreign Assets Control (OFAC) Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Drug Enforcement Agency (DEA) Food and Drug Administration (FDA) Environmental Protection Agency (EPA) National Industrial Security Program Operating Manual (NISPOM) Department of Commerce (DOC) Export Administration Act (EAA) Export Administration Regulations (EAR) Commerce Control List (CCL) Arms Export Control Act (AECA) International Traffic in Arms Regulations U.S. Munitions List

2.3 - Export Controls

Export Controls apply to all U.S. origin products, imports and re-exports. Although some controls are stricter than others, exporters are required by law to report all exports to U.S. Customs. In addition, exports from specific product categories must be reported to the agency or agencies that govern that type of export. CDM exports products specifically designed for military applications and must report to U.S. Customs and the Department of State.



In addition, export controls apply to all U.S. origin technical data. Similar to the controls governing U.S. origin products, all technical data produced in the United States is subject to export controls. CDM exports technical data that is directly related to military hardware and applications and must report to U.S. Customs and the Department of State.

Export controls for CDM also apply to foreign components that result from U.S. data, services supplied by U.S. persons, and the employment of foreign nationals.

2.4 - Types of Export Authorization

Exports by CDM of military hardware, technical data, and defense services can be authorized from the U.S. Dept. of State in one of three ways:

1. License – This is the most common form of authorization that CDM receives from the State Department. Licenses are granted after an application is made and has gone through an approval process. Exports made against a license apply only to specific parts or shipments and only for specific dollar or quantity amounts. Licenses must be accounted for very carefully to prevent mistakes. Export part values reported to the DoS must always reflect the part value noted on the original license. Often, part values listed on export invoices differ from the part values listed on a DoS license. In addition, licenses may include specific provisions that carefully spell out additional export rules that CDM must abide by. Currently CDM has no product that requires a license and all products shipped with ECCN Classification: EAR99.

2. Agreements – Agreements are similar to licenses except that they are more flexible in the amount of product or information that may be exchanged with a foreign entity. Agreements come in the form of a Manufacturer’s License Agreement (MLA) or a Technical Assistance Agreement (TAA). Agreements are drafted when a large amount of data or hardware must be exchanged with a foreign entity for a specific product or program. As the names imply, agreements can be used to allow manufacturing of U.S. designed products overseas, or to provide general technical assistance to a foreign party working with a specific product or program. Because the creation and approval processes for an agreement can be very lengthy, CDM would use them only when other methods are unsuitable. Currently CDM has no agreements in place.



3. Exemptions – Exemptions from the licensing requirements of the U.S. State Department apply to specific circumstances outlined in the International Traffic in Arms Regulations (ITAR). Exemptions have their own record-keeping requirements and only apply only to specific circumstances. They do, however, preclude the use of a License or Agreement. Exemptions help to simplify routine exports in certain cases and can be very convenient, but their use is closely monitored by the State Department. Use of an exemption to export an otherwise licensable article is a violation of the law. Currently CDM has no exemptions in place.

2.5 - Business Flow Chart, Vulnerability and Risk Responsibility

The following is a flow chart which indicates the process flow from the design of the capacitor to the shipment to the customer. It also indicates the departments involved in the tasks and identifies the areas of vulnerability or omission. The Export Control procedure noted describes the responsibility, process, and Internal Controls to be implemented to minimize the risks of noncompliance.



Business Flow Chart, Vulnerability/Risk and Control Responsibility

Action Vulnerability Task Responsibility

CDM Control

ProcedureRequest for new design

Does it need to be controlled for technology exchange or product export?

-Responsibility to review the Federal Register Notices of changes to part 774, the commodity Control List.-Checks with government if design meets parameters to determine if control is needed.-Checks with the design request against ECCN classification sections 3A001.e.2, 3A201.A, 3A999c-Ensures electronic logic in system, reviews new design and writes to export table with harmonization code and ECCN classification

ECO: Linnea Cvirko, 316Alt. ECO: Kelly Holiday, 332

Director of R&DSam Parlor, 224Alt:MIS Manager, Randy Lesley, 330Alt: Application Programmer, David Rowley, 331

ECP-102

ESP-103Esp-174

MIS-107

New customer outside the U.S.

Red flags

Is the customer on the Denied party List?

What are end use, ultimate destination, and proliferation concerns?

Is customer in embargoed country?

Is there an Antiboycott clause in the letter of credit?

Know “red flags” and contact Eco

Review again the Denied Party list

Send proliferation letter to the customer

Electronic customer data base with flags for proliferation and denied parts check so that order cannot be entered if flags are not turned

Turning flags and retaining letters of proliferation concern

Review of the Denied party listing

Review the letter of credit

Establishing electronic file containing all countries, with flag for embargoed country, that will not allow order entry

Sales, Marketing, Engineering

ECO: Linnea Cvirko, 316Alt. ECO: Kelly Holliday, 332International Sales Specialist, Jim Navaro, 447Alt: Sales Engineer, Aron Cobb, 412MIS Manager, Randy Lesley, 330Alt: Application Programmer, David Rowley, 331

ECO: Linnea Cvirko, 316Alt: Kelly Holiday, 332Credit and Collections, Dawn Dooley, 430

ECO: Linnea Cvirko, 316Credit and collections, Dawn Dooley, 430Alt: ECO, Linnea Cvirko, 316MIS Manager, Randy Lesley, 330

CSS-114ESP-122ROS-001SHP-106ACT-104

ECP-102

CSS-118

MIS-107ECP-102

ECP-102ACT-102

ECP-102

ACT-103

MIS-107


http://file-server1/cornell/it/Shared%20Documents/MIS-107.mht


http://file-server1/cornell/css/Shared%20Documents/CSS-118.mht

http://file-server1/cornell/shipping/Office%20Documents/SHP-106.mht

http://file-server1/cornell/engineering/Shared%20Documents/ESP-122.mht




or shipment Alt: Application Programmer, David Rowley 331



Action Vulnerability Task Responsibility

CDM Control

ProcedurePrepare shipment

All proper documentsIncorrect or missing information

Establishing electronic file containing all countries, forms needed and generated by the system

Complete and print all documents

MIS Manager, Randy Lesley, 330Alt: Application Programmer, David Rowley, 331Shipping Supervisor, Tracy Medline, 398Alt: Mary James, 398

MIS-107SHP-108

Record keeping

Missing records Electronic data retention

Waybills Shipping

MIS Manager, Randy Lesley, 330Alt: Application Programmer, David Rowley, 331Shipping Supervisor, Tracy Medlin, 398Alt: Mary James, 398

MIS-106

SHP-108

International contracted distributors and manufactured representatives

All Export Customers

Ensuring they comply with the U.S. regulations

Ensuring they comply with the U.S. regulations

Form statements in contracts

Form statements on system generated export documents

Vice President, World Wide Sales, Mike Selvaggi, 337Alt: International Sales Specialist, Jim Navarro, 447

MIS Manager, Randy Lesley, 330Alt: Application Programmer, David Rowley, 331

ECP-102ROS001

MIS-107

Training All involved functions not understanding regulations and responsibilities

Export Control Compliance Program ManualEmployee Training

ECO: Linnea Cvirko, 316Alt. ECO:Kelly Holliday, 332

CSS-114ESP-122ROS001SHP-106ACT-104MIS-107

International Compliance Monitoring

Are all procedures understood and performed correctly?

ECP audits part of the total company audit system

Director of Quality Manager Phil Whitmire 250Alt: Quality Engineer, Robin Young, 323

SYS-103.14


http://file-server1/cornell/managementsystem/Office%20Documents/sys103-14.mht

http://file-server1/cornell/managementsystem/Office%20Documents/sys103-14.mht











3.0 - CDM Export Control Procedure

In general, the purpose of compliance is to allow CDM to legally import and export the products, services, and data needed to transact business and remain profitable.

This goal is achieved through employee awareness, knowledgeable application processing, careful recordkeeping, and routine auditing.

By increasing awareness of the importance of compliance, it is the goal of CDM to reduce exposure to fines and penalties resulting from import/export errors while maintaining a competitive advantage with their ability to export in compliance with U.S. Government regulations.

3.1 - ECCN Classification

Identification, Receipt and Tracking of ITAR Controlled Items/Technical Data

Employees working directly with sales, contracts, engineering, shipping, and compliance are expected to maintain a working knowledge of the AECA and ITAR provisions.

Company employees will be notified of applicable changes in U.S. export control regulations via the Export Control Officer. Notices will be distributed in regular training sessions or via e-mail.

Questions regarding the interpretation of the AECA or ITAR will be addressed by the Export Control Officer or a member of senior management. CDM employees are prohibited from interpreting questionable portions of the AECA or ITAR without assistance.

As a distributor and sales platform, CDM does not manufacture any controlled items. ECCN Classifications Capacitors 3A001.e.2, 3A201.a, Capacitors 3A999C contain electrical parameters that could require a license to export product of verbal technology. Since a new design is created for each customer application, a review of those sections is needed both manually and systematically for each new design. ECP-102 and ESP108, ESP174 and MIS107 are the procedures.



ECCN Classification

Capacitors 3A001.e.2

E.2. High energy storage capacitors, as follows:

E.2.a. Capacitors with a repetition rate of less than 10 Hz (single shot capacitors) having all of the following:

E.2.a.1. A voltage rating equal to or more than 5 kV;E.2.a.2. an energy density equal to or more than 250 J/kg andE.2.a.3. a total energy equal to or more than 25 kJ;

E.2.b. Capacitors with a repetition rate of 10 Hz or more (repetition rated capacitors) having all of the following:

E.2.b.1. A voltage rating equal to or more than 5 kV;E.2.b.2. An energy density equal to or more than 50 J/kg;E.2.b.3. A total energy equal to or more than 100 J; andE.2.b.4. a charge/discharge cycle life equal to or more than 10,000

Capacitors 3A201.a

a. Pulse discharge capacitors having either of the following sets of characteristics:

a.1. Voltage rating greater than 1.4 kV, energy storage greater than 10 J, capacitance greater than 0.5 µF, and series inductance less than 50 nH; or

a.2. Voltage rating greater than 750 V, capacitance greater than 0.25 µF, and series inductance less than 10 nH;

Capacitors 3A999C

c. All flash x-ray machines, and components of pulsed power systems designed thereof, including Marx generators, high power pulse shaping networks, high voltage capacitors, and triggers.



3.2 - Embargoed Countries

As a matter of corporate policy, CDM refrains from engaging in activities with countries the United States Treasury regulations mandate a complete embargo treatment. Currently the countries are:

CubaIranNorth KoreaSudanSyria

The procedure for stopping order entry or shipping by the system and monitoring the government for change is covered in procedures ECP-102 and MIS107.



3.3 - Proliferation Concern and Denied Parties

CDM transacts business with a stable customer base. We maintain an up-to-date, “clean” database of all pre-approved Customers. Customers that have been checked against all the various control tests. If an export transaction involves a customer that is not in the company database, the order cannot be accepted into the system until all screening is complete on the following:

Denied Persons List

Proliferation Concerns

The Export Control Officer will screen new export customers against the Denied Parties Web list. The International Sales Specialist will initiate the following letter and questionnaire. Once the letter is received back and reviewed it is given to the credit and collections employee to turn the flag on the system customer master so that orders can be entered. It is then retained in a file with other customer information. These procedures are outlined in procedures EC-102, ACT103, CSS118

Subject: LETTER OF PROLIFERATION

To:

Proliferation Concern Checklist

Our business activity will be considered an export activity from the U.S.A. Certain provisions in the Export Administration Regulations (EAR) require an exporter to submit an individual validated license application if the exporter is aware that an export, that is otherwise exempt from the validated licensing requirements, is for end-uses involving nuclear, chemical, and biological weapons, or related missile delivery systems in named destinations listed in the Regulations.



In order for us to know that a license is not required, we will need to have the attached Proliferation Concern Checklist on file prior to making a shipment. This questionnaire only needs to be completed and returned one time. It will cover all future activity.

Please complete all questions on the three checklists and return, electronically, within two weeks for filing. We will not be able to process an order without the questionnaire on file.

For reference please see: http://www.access.gpo.gov/bis/ear/pdf/738.pdf and http://www.access.gpo.gov/bis/ear/pdf/738spir.pdf for information on the country chart of proliferation concerns andhttp://www.access.gpo.gov/bis/ear/pdf/744.pdf for project listings.

Thank you in advance for your assistance.

We look forward to doing business with you.

Sincerely,


http://www.access.gpo.gov/bis/ear/pdf/744.pdf

http://www.access.gpo.gov/bis/ear/pdf/738spir.pdf

http://www.access.gpo.gov/bis/ear/pdf/738.pdf


Page 1

CORNELL DUBILIERMISSILE TECHNOLOGY CHECKLIST

CompanyCountry of Ultimate Destination: (Country where components will be installed in a piece of equipment)Address

Date Screened _______________________________Screened by__________________________________ (Cornell Dubilier Representative)

Level 1.Have you been informed by the Bureau of Export Administration (BXA) that a

license is required?

YES __________ NO _______-If yes, a license application must be submitted to BXA and a

license Exception may not be used-If no, proceed to level 2

Level 2.Is the end-user located outside of Canada or in a destination listed on the U. S.?

Countries of Proliferation Concern chart?YES ______ _____ NO _____ ______-If yes, proceed to level 3-If no, a license exception may be used provided no other aspect of

the transaction requires a license.Level 3. A. Do you have knowledge that the end-use is involved in a project noted in Export

Administration? YES ___________ NO -If yes, a license is required-If no, answer the following questions

B. Do you have knowledge that the end-user of the items being sold is involved in any activities involving the development of missiles as identified below?



Do they have any direct or indirect assistance in the design, fabrication, operation, or maintenance of rocket systems (including ballistic missile systems, space launch vehicles and sounding rockets)?

YES ___________ NO __ _________

OR, in unmanned air vehicles systems (including cruise missiles systems, target drones, remotely piloted vehicles and reconnaissance drones)?

YES ___________ NO ____ _______

If yes, a license may be required, please verify with BXAIn no, answer the following questions

C. Does the end-user have any of the “red flag” indicators noted on the Diversion Risk Profile?

YES ___________ NO ____ _______ If yes and the question cannot be adequately resolved you should

Consider filing a license application with BXAIn no, a license exception may be used provided no other aspect of the

transaction requires a license

Page 2

CORNELL DUBILIERNUCLEAR APPLICABILITY CHECKLIST

Company:Country of Ultimate Destination: (Country where components will be installed in a piece of equipment)Address:

Date Screened _______________________________Screened by________________________ (Cornell Dubilier Representative)





YES ___________ NO ___ _ ______-If yes, a license application must be submitted to BXA and a

license exception may not be used-If no, proceed to level 2

Level 2.Is the end-user located outside of Canada or in a destination listed on the U. S.

Countries of Proliferation Concern chart?

YES ___ _______ NO ___________-If yes, proceed to level 3-If no, a license exception may be used provided no other aspect of

the transaction requires a license.

Level 3.Indicate if the customer is involved in any of the following potentially nuclear

related industries or Activities:

Power Plants **************************************** YES ______ NO ______Energy Plants **************************************** YES ______ NO ______Fertilizer manufacturing facilities ************************ YES ______ NO ______Ammonia manufacturing facilities ************************ YES ______ NO __ ____Glass, ceramic, or porcelain production ******************** YES ______ NO __ ___(country where components will be installed in a piece of equipmentNuclear facilities ************************************** YES ______ NO __ ____Nuclear explosives or weapons activities ******************* YES ______ NO __ ____Manufacturing of parts used in atomic facilities ************* YES ______ NO __ ____Nuclear or atomic reprocessing plants ********************* YES ______ NO __ ____Nuclear or atomic waste activities ************************ YES ______ NO __ ____Nuclear or atomic “source” material



(e.g. plutonium/ enriched uranium)**************** YES ______ NO __ ____Plants of any kind supported by fast breeder reactors ********* YES ______ NO __ ____Institutes of science and technology ********************** YES ______ NO __ ____Radiological facilities ********************************* YES ______ NO __ ____Conventional weapons and armaments research

And development establishment ****************** YES ______ NO _ _____Other military entities ********************************* YES ______ NO __ ____



Page 3

CORNELL DUBILIERCHEMICAL/BIOLOGICAL WEAPONS APPLICABILITY CHECKLIST

Company: .Country of Ultimate Destination: (country where components will be installed in a piece of equipment)Address:

Date Screened _______________________________Screened by _________________________________( Cornell Dubilier Representative)



YES ___________ NO ___ _______-If yes, a license application must be submitted to BXA and a

license exception may not be used-If no, proceed to level 2

Level 2.Is the end-user located outside of Canada or in a destination listed on the U. S.

Countries of Proliferation Concern chart?YES _____ ______ NO ___________-If yes, proceed to level 3-If no, a license exception may be used provided no other aspect of

the transaction requires a license.Level 3.

Indicate if the customer is involved in any of the following chemical/biological activities or industries.

Chemical plants ******************************************YES ______ NO ______Petrochemical plants ************************************** YES ______ NO ______Petroleum ********************************************** YES ______ NO ______Cosmetics ***********************************************YES _____ NO _



Food processing equipment *********************************YES ______ NO ______Glass, ceramic, or porcelain production *********************** YES ______ NO ______Mining operations **************************************** YES ______ NO ______Metal manufacturing ************************************** YES ______ NO ______Organic synthesis *****************************************YES ______ NO ______Paper manufacturing ************************************** YES ______ NO ______Plastic or rubber manufacturing ***************************** YES ______ NO ______Pharmaceuticals ***************************************** YES ______ NO ______Textile or textile dyes ************************************* YES ______ NO ______Insecticides or pesticides ***********************************YES ______ NO ______Semiconductor manufacturing ****************************** YES ______ NO ______Paint production ***************************************** YES ______ NO ______Institutes of science and technology ************************* YES ______ NO ______Conventional weapons and armaments research and development

Establishments ********************************** YES ______ NO ______Other military entities ************************************ YES ______ NO ______Other potential end-users of controlled chemical weapons precursors

Or biological agents ******************************* YES ______ NO ______



3.4 - Antiboycott

Antiboycott laws require U.S. persons to refuse to participate in foreign boycotts that the U.S. does not sanction (part 760 of the EAR).

Some indicators of antiboycott concern can also be viewed as “Red Flags”:

Agreements to refuse, or actual refusals, to do business with Israel or with entities blacklisted by boycotting countries.

Agreements to discriminate or actual discrimination against other persons based on race, religion, sex, national origin or nationality.

Furnishing information about business relationships with Israel or with entities blacklisted by boycotting countries.

Furnishing information about the race, religion, sex, or national origin of another person.

Paying or otherwise implementing letters of credit that include requirements to take boycott related actions prohibited by the antiboycott regulations.

Create a HOLD function until resolved.

You are required to report each boycott-related request you receive to the Office of Antiboycott Compliance at (202) 482-2381.

EC-102 and ACT103 are the procedure that covers this area of vulnerability.



Instructions for Issuing Letters of Credit

Dear Sir or Madam:

Following are the details we wish to have included in your documentary letter of credit issued in reply to our underlying contract or agreement. We have made every effort in these instructions to provide you with terms which can be easily accommodated. If you or your bank is unable to comply with these terms and conditions, please consult with our offices prior to the issuance of the credit to avoid delay or non-shipment. Please instruct your bank to open an irrevocable letter of credit in accordance with the following terms and subject to the International Chamber of Commerce, Uniform Customs and Practices for Documentary Credits, Publication No. 500.

1. Transmit the letter of credit by: SWIFT/Telex2. The credit shall be advised by:

SunTrust BankAttn: International operations25 Park Place, 16th Floor (Mail Code 3707)Atlanta, Georgia 30303SWIFT: SNTRUS3A

3. The credit shall not be transferable.4. Beneficiary:

Cornell Dubilier Marketing, Inc.140 Technology PlaceLiberty, SC 29657USA

5. The credit is to be payable in USD.6. Payment Terms: At sight7. All banking charges are for the account of the applicant.8. Partial shipments: Permitted9. Transshipments: Permitted10. Shipping terms: EXW, Liberty SC (per Incoterms 2000)11. Documents we customarily provide: commercial invoice; packing list; certificate of origin; full set of clean on board ocean bills of lading, consigned to order of shipper, marked freight collect12. Cornell Dubilier Marketing cannot accept any letter of credit that includes any boycott related actions prohibited by the antiboycott regulations. If the letter does have boycott related actions it will be returned for removal before we can accept.

Thank you for your cooperation,

Dawn DooleyCredit & Collections Manager



3.5 - Export Shipment Documents

CDM exports goods governed by the International Traffic in Arms Regulations as well as the Arms Export Control Act, and is responsible to ensure that all required documents with accurate information accompany the shipments. To achieve this goal and ensure accuracy we utilize our systems where possible.Classification and HTS file When our product is designed and has a part number the system logic automatically writes the part number to an export part number file. In addition to the part number the logic determines the Export Commodity Control Number (ECCN). At this point if the design met the technical parameters outlined in ITAR 744 section 3A001.e.2 and 3A201.a. Currently there are no items that fit these criteria. Should we develop a design and the classification not checked with the U. S. department of State, the system would flag the part and not allow order entry or shipping until it had been reviewed with the government. Currently all of the CDM products carry a classification of EAR99 and list on documents that No License is Required (NLR). A second logic has been written that determines the tariff or harmonization code from Schedule B-Statistical Classification of Domestic and Foreign Commodities. Both the Harmonized Tariff Schedule (HTS) number and the description are required on the commercial invoice and the SED. Country Document fileCDM also retains a country file. This indicates the documents that are required and also if the country is embargoed. Based on the country destination the system notifies shipping which documents are needed and has them pre populated with information except for a few pieces of information such as quantity and weight.

Changes to these files can only be made at the instruction of the ECO or Alt. and MIS is responsible to ensure that the information is accurate. This is outlined in the following procedures ECp-102, Mis107, SHP108



3.6 - Recordkeeping

Purpose

CDM exports goods governed by the International Traffic in Arms Regulations, as well as the Arms Export Control Act, CDM is responsible for maintaining accurate records. CDM must be able to provide these records on demand for a period of five years from the date of export or license expiration.

General Definitions

Export Records to be retained:

Export Control Documents: Memoranda; Notes; Correspondence; Contracts; Invitations to bid; Books of accounts; Financial records; Restrictive trade practice or boycott; Documents and reports; Other records pertaining to this type of transaction

Licensing: CDM currently does not have any licenses to retain. Exemptions: CDM currently does not have any.

It is the policy of CDM, Inc. to properly maintain and categorize export documents, export licenses, and exemption articles in accordance with U.S. Government regulations.

Procedure

Recordkeeping will be the responsibility of the following departments:o Shipping and receiving will be responsible for the creation of export

invoices and related documents which will be supplied to the customers preferred freight forwarder.

o The customers preferred freight forwarder/broker will be responsible for generating all remaining shipping documents, decrementation of necessary licenses, and for filing required AES documentation. It is important to note that license values reported to the Department of State must reflect the value associated with a specific license. Part values on an export license often differ from part values listed on a commercial invoice. Upon billing, the customers preferred freight forwarder will return a copy of all generated documents to the Accounting Department.

The Compliance Department will be responsible for:o Maintaining export license files.o Providing quality control over the recordkeeping process.



o Maintaining records related to exemptions and their use.o Periodic review on a semi-annual basis that will consist of an audit of 26

unique records - one from each two-week period.o Destruction of records maintained beyond the requirement of law. Expired

records will be destroyed on an annual basis.o The above is detailed in procedures ECP-102, ACT102,104, MIS106 and

SHP108

3.7 - CDM Policy - Export Control Statements

Introduction

Exports of strategic goods and technical data must be labeled in accordance with the International Traffic in Arms Regulations. The following statements are used at CDM.

Statements

Technical Data:

Currently CDM does not have technical designs that require control. If we do develop such a design the following statement would accompany the information:

EXPORT SENSITIVE: ITAR CONTROLLEDInformation contained herein is subject to the Code of Federal Regulations Chapter 22 International Traffic in Arms Regulations. This data may not be resold, diverted, transferred, transshipped, made available to a foreign national within the United States, or otherwise disposed of in any other country outside of its intended destination, either in original form or after being incorporated through an intermediate process into other data without the prior written approval of the US Department of State.

Product - the following statement appears on all commercial invoices:“These commodities were exported from the United States in accordance with the U.S. Export Regulations. Re-export, diversion, or transshipment for ultimate destination, Hong Kong contrary to U.S. law prohibited.”

The destination is populated by the computer system based on the ultimate destination given in the response to the letter of proliferation concern.

Contracts - the following statement appears in all Distributor Contracts:



Domestic Distributor Agreement: SECTION 11. CERTAIN PROVISIONS RELATING TO LEGAL COMPLIANCE Distributor represents and warrants to Cornell-Dubilier that Distributor’s acquisition, application, use, transfer, disposal and other disposition of each product acquired by Distributor will be in accordance with all applicable laws and regulations including, without limitation, all applicable environmental laws or regulations, and all applicable laws or regulations regarding the exportation of any property, product, material, commodity, technology, software, information or service which the Distributor purchases or obtains from Cornell-Dubilier. Distributor represents and warrants to Cornell-Dubilier that Distributor is not restricted under the terms of any U.S. custom or export law or regulation from receiving any product to be purchased from Cornell Dubilier; and Distributor agrees that none of the products to be purchased by Distributor from Cornell-Dubilier will be exported or re-exported , directly or indirectly (except in full compliance with all U.S. custom and export control laws and regulations) to any country or person that Distributor knows or has reason to know is restricted from receiving such goods by any U.S. custom or export control law or regulation. Furthermore, the Distributor will refrain from acquiring, using, or transmitting any product or technology of Cornell-Dubilier to the extent that such acquisition, use or transmission would violate any U.S. law or regulation; and Distributor shall not directly or indirectly sell, transfer, provide, deliver or transmit (except in full compliance with all U.S. custom and export control laws and regulations) any such products or technology to any persons, countries or organizations that the Distributor knows or has reason to know are subject to denial of U.S. export privileges.INTERNATIONAL Distributor Agreement: SECTION 11. CERTAIN PROVISIONS RELATING TO LEGAL COMPLIANCE

Distributor represents and warrants to Cornell-Dubilier that Distributor’s acquisition, application, use, transfer, disposal and other disposition of each product acquired by Distributor will be in accordance with all applicable laws and regulations including, without limitation, all applicable environmental laws or regulations, and all applicable laws or regulations regarding the exportation of any property, product, material, commodity, technology, software, information or service which the Distributor purchases or obtains from Cornell-Dubilier. Distributor represents and warrants to Cornell-Dubilier that Distributor is not restricted under the terms of any U.S. custom or export law or regulation from receiving any product to be purchased from Cornell Dubilier; and Distributor agrees that none of the products to be purchased by Distributor from Cornell-Dubilier will be exported or re-exported, directly or indirectly (except in full compliance with all U.S. custom and export control laws and regulations) to any country or person



that Distributor knows or has reason to know is restricted from receiving such goods by any U.S. custom or export control law or regulation. Furthermore, the Distributor will refrain from acquiring, using, or transmitting any product or technology of Cornell-Dubilier to the extent that such acquisition, use or transmission would violate any U.S. law or regulation; and Distributor shall not directly or indirectly sell, transfer, provide, deliver or transmit (except in full compliance with all U.S. custom and export control laws and regulations) any such products or technology to any persons, countries or organizations that the Distributor knows or has reason to know are subject to denial of U.S. export privileges.

INTERNATIONAL Sales Representation Agreements: Section 18

Compliance:

The Representative shall comply with all laws and regulations applicable to the

Representative, including, without limitation, all applicable Indian laws and regulations regarding customs or non-proliferation or regarding the importation, exportation or other transfer of any property, product, material, commodity, technology, software, information or service which the Representative markets for or obtains from the Company or any affiliate of the Company. In addition, the Representative agrees not to submit any purchase order to the Company or otherwise participate in any sale, or other marketing, which the Representative knows, or has reason to know, includes, involves or will result in: (a) any export, import, transfer or other activity that violates any Indian or US law or regulation; or (b) a sale (or other transfer) to any person, individual, firm, organization, country or other entity, or any associate thereof, not permitted to participate in such a sale (or other transfer), or to receive such an export, import, or other transfer, pursuant to any Indian or US law or any regulation (the “Restricted Persons”). Furthermore, the Representative shall take appropriate precautions and utilize appropriate procedures intended to address the requirement that the Representative’s customers of any products or services of the Company, or any Company affiliate (i) do not include any Restricted Person and (ii) are not directly or indirectly participating in the export, re-export, import, or other transfer of any goods or services provided by the Company or any Company affiliate or any technical data of the Company or any of the Company affiliates to any Restricted Person, except in accordance with all applicable Indian and US laws and regulations and with all appropriate approvals and clearances from the Indian and US governments.



4.0 - Training on Compliance Procedures

Training is one of the critical elements of a company’s export management and compliance program. Because export control regulations change and products and their end-uses are continually evolving, it is essential for companies to include a training component in their Export Management and Compliance Programs. Informed employees minimize the likelihood that inadvertent violations of export laws will occur. Ambiguities can lead to confusion which could contribute to an inadvertent export violation. CDM, therefore, is dedicated to updating their export control and compliance knowledge-base on a regular basis through training.

As important as it is to have export compliance policy and procedures, it is equally important that they be communicated effectively to all employees. All employees who are involved in export-related functions, including top management, contractors, consultants, and even interns, should fully understand export compliance responsibilities. CDM will provide these employees with sufficient training in order to ensure they possess a working knowledge of current export control regulations as well as the specific requirements of the company’s Export Management and Compliance Program. By tailoring training to be job-specific, while also providing the big picture regarding the whole process, including some proliferation awareness, your staffs will more clearly understand the importance of the export-compliance roles to the company and the nation.

Training should cover processes, responsibilities, obligations, and consequences (positive and negative). CDM will consider emphasizing training on high-risk areas of noncompliance. Employees will be required to complete training to learn not only about specific export regulations, but also about the particular products the company exports, ways in which such products can be misused, how to identify illegalities, how to detect suspicious and inconsistent behavior, and what to do in those circumstances. Providing exercises, problems to solve, and “What if…?” scenarios to work through in training might help in this regard.

Through an effective, compulsory, periodic training program for all associated with export transactions an espirit de corps can be built to ensure that your staffs become your compliance partners as you make it easy for them to help you. As we invest in our greatest asset, our people, we go a long way in creating the corporate-culture of compliance

Compliance Training is to be conducted on an annual basis, or at any interval necessary to educate new employees, update critical material, etc. This training may include, but is not limited to:

- General instructions regarding export compliance



- Changes to applicable U.S. regulations- Updated procedures and related policies- Distribution of revised CDM compliance literature- Any other activity or material necessary to meet the goal of informed

compliance.The compliance Department will be responsible for maintaining a record of the CDM training schedule and attendance in order to demonstrate due diligence and reasonable care.Human Resources will be responsible for scheduling training and maintaining a record in each employee’s personnel file regarding their attendance

5.0 - Foreign Nationals

According to the International Traffic in Arms Regulations (ITAR) it is illegal to disclose export sensitive technical data to a foreign national regardless of status without the express written permission of the U. S. Government Failure to prevent the disclosure of sensitive technical data can result in criminal and civil charges.

It is common for foreign nationals to visit, work and live in the United States. With this however, we must always be aware that foreign nationals are not obligated in their interests to the United States, and that any information given to them is considered an international export.

Foreign National; All persons who are not citizens or nationals of or immigrant aliens to, the U. S. This includes, but is not limited to foreign diplomats, buyers, salespeople, engineers, etc. of any country including Canada and Mexico.

Sensitive Technical Data: Information which is required for design, development, production, manufacture, assembly operation, repair, testing, maintenance or modification of defense articles. This includes information in the form of blueprints, drawings, photographs, plans, instructions and documentation.

Non-Sensitive Data: Data that has been made generally available to the public in any form, including:

-Data released orally or visually at open conferences, lectures, trade shows, or other media open to the public.

Publications that may be purchased without restrictions at a nominal cost, or obtained without costs, or are readily available at libraries open to the public.



6. Internal Compliance MonitoringObjective:To protect the integrity of the CDM Export Management Compliance Program by verifying that operation compliance procedures within all of the company’s export- related functions reflect the company’s written compliance procedures and that company procedures are consistent with government regulations.

To identify and resolve inconsistencies between written and operational procedures, draft and audit / assessment module which answers:

Who should conduct reviews?What procedure should reviews follow?What should be audited/ assed?How often will reviews take place?

The CDM EMCP is part of the total Quality Management System. The annual training of the audit personnel will be a priority. The audits will cover from customer inquiry to product delivery with an overview of potential areas of risk. If the audit ‘s findings raise questions concerning export compliance risks, procedures will also be in place for these issues to be raised to management attention. By being part of the total quality management system procedures for implementing audit recommendations, following-up on corrective actions taken and reporting on audit recommendations will be ensured.



7. Voluntary Disclosure

General Definitions

Voluntary Disclosure: The act of willfully communicating information to a regulating agency for purpose of discovery.

It is the policy of CDM Inc. to file a Voluntary Disclosure with an appropriate U.S. Government Agency when it has been determined that an error or violation has occurred. In cases where a Voluntary Disclosure has been filed, CDM will conduct itself according to applicable U.S. laws and regulations.

Procedure

All CDM employees are responsible and encouraged to immediately reporting violations in import and export law to their immediate supervisor or manager.

Managers will be responsible for reporting violations to senior management and the Compliance Department.

The Compliance Department, in conjunction with Human Resources will be responsible for providing training to CDM employees to educate them with regards to applicable U.S. laws and regulations.

The Compliance Department will be responsible for filing a Voluntary Disclosure in accordance with U.S. law.

Senior management must enact final authority on any Voluntary Disclosure before submission to a regulating agency.


