… requirements and tips for training.
In our first article “Is training an important part of a trade compliance program?” (article 1) we concluded that training is still an important and central part of a trade compliance program. The EU Commission, BIS and OFAC expect this, and training is a crucial prerequisite for employees to acquire knowledge, remember and incorporate the new knowledge into their everyday lives. However, decisions are not made only on the basis of knowledge of rules and processes. What the employee intuitively believes, thinks and feels – bias – also plays a role in the decision-making process.
Based on the worlds of law and behavioral psychology (and our experience with training), we have focused on the training in this article, and see, among other things, whether there are any requirements that must be met and/or anything else that can optimize the training.
In the articles, reference is made to the EU Commission’s guidance as “EUGE”, BIS’s guidance as “USGE” and OFAC’s guidance as “USGS”.
The EU Commission, BIS and OFAC’s requirements for training
The authorities do not have any legal requirements for the training, but have stated in the guidelines the expectations they have for the training in trade compliance programs.
Overall, the training must ensure that the employees gain enough knowledge of the rules and the company’s compliance program to be able to comply with them when performing the work for
the company. In other words, information must be provided about the rules and a bridge must be built for the various work tasks in the company.
It is also expected that the employee gains sufficient understanding during the training so that the employee “can … take the compliance obligations seriously”³.
This means that in addition to informing the employees and ensuring that they know what they have to do in their work function in order to comply with the rules, the training must therefore result in a mindset where compliance is taken seriously and the rules and the compliance program is de facto complied with.
The authorities recommend that this be done through at least two types of training:
- A general “awareness training” for all employees in the company, which gives employees a basic understanding of export controls and sanctions. The training must also inform the employees about the management’s position on trade compliance and the consequences for the company and the individual employee in the event of non-compliance.
- In-depth and preferably tailor-made training programs for those employees who have work tasks that can conceivably come into contact with trade compliance, e.g. because they are employed in sales, purchasing, development, invoicing, HR or management.
This type of training must provide employees with knowledge of all rules relevant to their job function as well as knowledge of their role and tasks under the trade compliance programme.
The EU Commission recommends that these employees are informed of all changes to the rules as soon as they are published4.
It is expected that experiences from performance reviews, audits, reporting, corrective measures and results of root cause analyzes are included in the company’s training program whenever possible.
There is no expectation from the authorities that the training takes place in a certain way, e.g. at physical meetings or e-learning. The training can be carried out in-house in the company or via external seminars, subscription to national, EU, BIS or OFAC information meetings and other training initiatives or in other ways.
The authorities expect the training to be repeated regularly and at least once a year, but they make no recommendations as to how training should otherwise be best approached so that the expected results of the training are achieved.
Make it as "relevant" as possible
The authorities do not expect employees to be trained as semi-lawyers in the legal area of trade compliance. It is “only” the legal rules that are “relevant” to the company’s activities and the company’s compliance program that must be trained.
This means that not all rules must be affected and/or affected to an equal extent. A company without imports or exports must therefore not have the same understanding of the export control rules as a company that buys from suppliers all over the world or exports to customers all over the world.
It also promotes learning that the examples included in the training are as close to the employees’ reality as possible. Examples given of rules and processes should therefore, as far as possible, be based on the individual company. Examples for a company that makes enzymes for the food industry should therefore concern enzymes and the food industry and not e.g. sale of spare parts for cars. Ensuring relevance in everything in the training also has the advantage that the amount of “new” that needs to be understood and learned is limited as much as possible. In other words, there is less “new” the employee has to deal with and learn.
Inspiration or actual examples can be obtained from e.g. audit reports and conclusions on root cause analyses, as is also recommended by the authorities. Information about the company, including during interviews of employees obtained as part of a risk assessment, is also valuable to use as a starting point when training is organized and examples are to be made.
By making the training as relevant as possible in as many ways as possible, a bridge is built during the training between the rules that must be observed and the reality that the employees find themselves in. This is a way of ensuring that the rules actually also observed in everyday life.
“Repetition is the mother of all skills”
As we concluded in article 1, repetition is a prerequisite for the employees to store what they learned during the training at a level where they use the fewest resources to remember and consider what should happen in a given situation. By repetition, information is moved from “new” to something “known” that can run more or less on the spine. It moves from a system 2 to a fast system 1 decision-making process.
The authorities also recommend that the training be repeated, but repetition can and should also take place during the training itself. There is no need to wait a year to repeat.
During training, key messages can be advantageously selected and repeated as many times and in as many different ways as possible.
A central message could be, for example, that third parties must be screened before agreements are made with them or payments/delivered to them. This message can be repeated, e.g. as information (visually or verbally), by asking employees (“how was it with third parties. Can you…”?), storytelling, and combinations of all these.
Elimination of bias
Bias are misconceptions that occur on the unconscious level and can affect a decision-making process. This was explained in more detail in Article 1.
The challenges with biases is that we all have them and we are typically not aware of them. Nevertheless, biases can be decisive for whether rules are followed and whether a mindset shift can actually be achieved during the training.
A bias that can exist in a company can e.g. be of the opinion that compliance is an obstacle to doing business. Such a bias can therefore lead to a resistance to actually carrying out what is learned in the training. The employees can instead focus on making it look as if processes have been carried out, but in a completely impractical way the employees do as they have always done.
Another challenge with biases is that they cannot be completely eliminated, but one can try to eliminate their impact on the decision-making process⁵. The method for this starts with an understanding that bias can occur – with management, the compliance department and all other employees. By developing an awareness of their existence and gathering knowledge about biases in employees that can have a negative impact on the decision-making process, their influence can be minimized.
Biases that may be relevant to be aware of can then be included in the training.
Some of the most frequently occurring biases are:
- Bandwagon bias: The tendency to adopt a certain behavior or attitude because others do.
- Confirmation bias: The tendency for people to interpret, focus on and remember only information that confirms their own understanding and opinion.
- Sunk cost and escalation of commitment bias: The tendency to continue a project because money and time have already been invested in it.
- Status quo bias: Tendency to prefer that things remain relatively the same.
The above is just a microscopic selection of all the different biases that can occur⁶.
One tool to address biases is to give employees some questions that employees can ask themselves in a given decision-making process. This could be, for example:
- Does this situation remind me of someone else gone wrong?
- Am I nervous about making this decision?
- What assumptions have I already made about this situation?
- Is this something I KNOW or is it something I feel, believe or have a hunch (ie a bias)?
In addition, training could also include examples of the various biases to make it concrete. Examples of biases the training can advantageously examine and address:
- Bandwagon bias: Is there a specific attitude towards who is responsible for compliance in the company. Is there e.g. a basic attitude that it is compliance, legal, the parent company, the subsidiary or others who have the actual responsibility for ensuring compliance with trade compliance?
- Confirmation bias: Is there a certain basic perception among the employees that can color their understanding of the training. It can e.g. be that compliance is an obstacle to
- Sunk cost and escalation of commitment bias: Emphasize that being compliant may mean that the company will have to give up and stop projects and deliveries to customers, – even if this may mean the loss of many years of effort and the loss of goodwill with
- Status quo bias: Highlighting the extent to which processes remain relatively the same and which changes are inevitable and require a change to the status quo.
Biases are corrected through attention to their existence and content. Attention is created by, among other things, ensuring that employees are equipped with questions that in the decision-making process can shed light on biases that can have a negative impact on the compliance process. When biases are addressed during training, awareness of their existence, content and influence increases, and the company reduces the risk of wrong decisions being made based on these biases.
Training in trade compliance – in short
Training in trade compliance must include the legal rules and processes that are relevant to the employees, and it must be organized in such a way that the employees take the compliance work seriously.
When organizing the training, it is expedient to relate the training as much as possible to the daily life of the employees and the company’s activities through examples and selection of legal rules. Repetition – repetition of key messages – will ensure that what is learned becomes an integrated part of the employees’ everyday life and daily decision-making processes more quickly. In addition, examples of relevant biases can advantageously be included in the training, so that employees’ awareness is increased and any negative effects are limited as much as possible.
In the next article, we will take a closer look at whether there is anything else and more besides training that the company can also do to ensure the best possible compliance with the trade compliance rules.
The next article will be on December 30, 2021.
Homepage: www.lykkeschmidt.com
Article by Isabella K. S. Schmidt, Bachelor in Business Psychology and Annelise Lykke Schmidt, Lawyer (L).
Published December 19, 2021
