Welcome to the Trade Compliance &

Customs General Awareness Training

Module
 Trade Compliance & Customs

Schlumberger accountable for compliance

Assist employees in complying with laws
and regulations
TCC team can help navigate compliance
issues
Expected that processes, procedures and
workflows have trade compliance
imbedded
Understanding of your personal
responsibilities
Help avoid the devastating consequences
of non-compliance

Slide 2
 What is Trade Compliance?

All governments regulate imports and exports

Imports
Tax imports via customs to generate revenue
& protect interests
Exports
Place controls to support foreign policies
Ensure national security
Review the Schlumberger Trade Compliance
Policy
Provide information on import and export controls,
multilateral export controls, and trade restrictions

Slide 3
 Trade Compliance Code of Conduct

Trade Compliance is an integral part of the new Code of Conduct.

Merged and replaced the Code of Ethics and the 21 Policies.
Schlumberger employees are responsible that they comply with Schlumberger
codes.
Schlumberger employees must comply with all applicable import and export
control laws and regulations
Movement of goods, personnel, software, technology, information and data
Procedures must be maintained
Area management has primary responsibility for developing and
implementing programs
Legal Department is responsible for advising on compliance
Familiarize themselves with such procedures
Employees cooperate with all import and export control compliance activities
Violation of trade regulations can subject individuals to civil and criminal
liability

Slide 4
 What are Export Controls?

What are expert controls?

Government regulations that restrict
export of controlled products,
software, or technology to certain
persons, countries, and entities

Key Terms

Slide 5
 Export

An export is the transfer of

from one country to another, by
any means.
For example:
Sending an item by mail or
hand-carry on an airplane
Sending a maintenance
manual by e-mail or fax
Downloading software via
Internet

Slide 6
 The Broad Scope of Export

Be aware that export controls may still apply even if the item is:
Leaving your country temporarily
Is a gift and not for sale
Is used or repaired
Is going to a wholly-owned subsidiary in a foreign country
Is transmitted or transshipped through a country which is not
an items final destination

Slide 7
 What is technology?

Technology is specific
information necessary
for the development,
production, or use of a
product.
In the form of models,
drawings, manuals,
training, or technical
services.

Slide 8
 Wassenaar Arrangement

Multilateral export control regime with 41 participating

countries
Goods, technology and software considered dual use
Controlled for export and require licenses or exceptions
These countries will require either licenses approval or
license exceptions for exporting

Slide 9
 Is my export controlled?

Items may or may not

be controlled depending
on its technical
specifications, the
country of final
destination, end-user,
and end-use.
Four questions
determine control of any
item

Slide 10
 What are you exporting?

Export Control Classification Number Manufactured products are classified by

(ECCN) EMS
EAR99 are the majority of commercial Provide the ECCN
items consisting of low-technology Majority of goods are classified EAR99
consumer goods
Some items are classified as Dual Use
Dual-use items require either an export
license or a license exception

Slide 11
 Schlumberger Products classified as
Dual-Use

Slide 12
 Where are you exporting?

Determine the final destination

Dual Use goods may need licenses to ALL destinations, even
within the EU
Some countries may have UN, International or National
embargoes on them

UN US EU Canada

Slide 13
 Where are you exporting?

Slide 13B
 Who will receive your item?

Certain individuals and

organizations are banned from
receiving goods
Know who your end user is
Schlumberger sites have
processes embedded to ensure
the screening of all third parties
Slide 14
 What will your item be used for?

Some end-uses are prohibited, others

may require a license
Activities related to the proliferation of
nuclear, biological, and chemical
weapons are prohibited
For most intrrnal Schlumberger sales
the end use is known

Slide 15
 Import Compliance

Determine import regulations and

legislative requirements
Import controls are in place primarily to
generate revenue and regulate type of
import
Every import must comply with the
importing countrys regulations
Ensure correct Harmonized Tariff
Classification Code
Ensure correct valuation
Ensure correct Country of Origin
Duty to be paid

Slide 16
 Hand Carry

No hand carrying Products, Software or

technical data between countries
Some business critical items require hand
carrying
Exemption process for extreme
circumstances
Exemptions must be approved through
QUEST
For US embargo countries, the MEA or LAM
President must also approve exception

http://www.hub.slb.com/display/index.do?id=id3052
278

Slide 17
 Personnel

Export regulations can cover movement of people

Personnel transfers managed according to TCC
standard
Take into account embargoes and sanctions
Job involving travel to US on business cannot be
assigned to citizen of US Embargoed country
A US person must not approve budgets for US
embargo countries
An EU person cannot train any person assigned to
Iran or Syria
WesternGeco streamers under the control of
citizens from countries defined in license
Potential recruits screened against denied party
lists

Slide 18 http://www.hub.slb.com/display/index.do?id=id3052257
 Training Courses, Workshops and
Forums
Identify trade compliance issues prior to conducting
training or workshops.
Examples of potential issues:
US persons training a person assigned to a US
embargoed country
Trainers of any Nationality training a course with
controlled technology to staff who are ineligible to
receive such training
Discussion during a workshop which includes EU
persons and clients from Iran
Software being distributed during training and
exported to the trainees home country

Slide 19
 Training Course - Scenario

Farid is an Iranian citizen who is on an International contract with

Schlumberger presently assigned to Bahrain. He has booked himself on a
training course in Abu Dhabi. The training manager in Abu Dhabi has
rejected the application because the trainer is a US person.

Did the training manager do the right thing?

No.

Farid is permanently assigned to Bahrain so he is treated as if he is

Bahraini under the regulations. Farids citizenship is of no consequence in
this instance.

Slide 19B
 Violation Penalties

High exposure risk

Business operations in
sensitive countries
Severe penalties for export
violations
Loss of export privileges
Added to a denied partys list
Civil penalties imposed on the
company
Business implications can be
catastrophic

Slide 20
 Violation Example

On June 22, 2010, Agar

Corporation Inc., a company
in Houston, pleaded guilty to
violating the International
Emergency Economic Powers
Act and agreed to pay $2 million
in criminal fines
and civil penalties. Agar
Corporation illegally
facilitated the export of
multi-phase flow meters by
an affiliate in Venezuela to
Sudan for use in the Melut Basin
oilfield in violation of
the embargo on Sudan.

Slide 21
 US Export Controls - Extra Territorial
Reach
US is unique in having extra-territorial jurisdiction over its exported goods.
Follow any US-made controlled item wherever it goes
Covers foreign-origin items being exported from US
Cover incorporation of US components into non US manufactured
items

Slide 22
 US Persons Restrictions

US Persons:
US Citizens and permanent resident aliens or
green card holders
Foreign nationals living in or getting paid in the US
Employees of a branch of a US company
All persons who are physically present in the US
Transactions by US persons involving Cuba, Iran,
Sudan or Syria are prohibited, including indirect
participation in:
Approvals of any kind
Facilitation of any business

Slide 23
 US Persons Restrictions - Facilitations

Facilitation includes but is not limited to:

Approvals in SWPS, Quest, iLearn,
InTime, or any other corporate software
Travel or expense help or approval
Budgetary approvals
Training of persons assigned to an
Embargo Country
Allocating, answering or forwarding an
InTouch ticket
Putting a software bug request in SWIFT
Slide 24
 US Persons Restrictions - Scenario

John receives an InTouch ticket to his helpdesk in Sugar Land, USA. It is from his old
friend, James, who is based in Cairo, Egypt. The ticket is a request for help with an issue
in Sudan. Realizing that Sudan is a US embargoed country, John assigns the ticket to
Pierre, who is based in Paris. John, James and Pierre are each Canadian citizens.

Has John facilitated business with Sudan?

Yes.

The act of assigning a ticket, or forwarding an email to a non-US person, is considered

facilitation of business by the US where the embargoed country sanctions are concerned.

Slide 24B
 The US Deemed Export Rule

Deemed export is the transfer of controlled technology or source

code within the United States, to a foreign person and can be:
Visual or verbal
Formal setting or casual inquiry
Foreign person anyone who is not a citizen, permanent
resident or Green Card holder of the US
Person transferred from Japan to the US with a Japanese
passport who has a valid work visa
Considered a foreign person for the deemed export rule

Slide 25
 The US Deemed Export Rule - Scenario

Farid is an Iranian citizen who is on an International contract with Schlumberger,

presently assigned in Bahrain. He has booked himself on a training course in Houston.
The training manager in Houston has rejected the application.

Did the training manager do the right thing?

Yes.

Although in some circumstances, it would not be illegal for Farid to go to the USwhen
the training was non-technical, for instanceSchlumberger has taken the position that no
citizen of Cuba, Iran, Sudan or Syria may visit the US for any business reason.

Slide 25B
 EU Restrictions

All EU Persons subject to EU Export Laws.

EU Persons are:
EU citizens and permanent residents wherever
located
Foreign nationals living/getting paid by an EU
entity
All persons, regardless of nationality, physically
present in EU

As of March 2012, most transactions and facilitation of

Schlumberger business by EU Persons involving
the heavily sanctioned countries of Iran and Syria
are prohibited.
http://www.hub.slb.com/display/index.do?id=id3052262

Slide 26
 EU Restrictions - Scenario

Rafi, an Iranian citizen assigned to SIS in the UK, flies to Tehran to

visit his mother. During his visit, he meets old colleagues from
Schlumberger in a coffee house and they discuss technical details of
the new functionality of Petrel software.

Has Rafi broken EU sanctions on Iran?

Yes.

Although it is perfectly acceptable to visit Iran, Schlumberger would

consider this technical support which is not compliant with EU
sanctions on Iran (March 2012).

Slide 26B
 Code Words, Concealment and Evasion

Schlumberger operates lawfully in

every country in which it has business.
Employees must not use
euphemisms in an attempt to
disguise which
country theyre referring to "Southern Egypt"
Use of code words or terminology
may appear to conceal the true "Another country I support"
destination of shipments
Carries significant risks
Could be viewed as evidence of
intent to avoid US sanctions or
conceal potential violations

Slide 27
 QUEST

Employees who become aware of a risk

that could result in a violation must
submit an SQ report in QUEST.
If any employee believes that a violation
has occurred, it must be reported to their
Manager, the local TCC Leader and/or
TCC Area Manager.
Schlumberger is committed to
maintaining full compliance with the laws
and regulations governing trade controls
in all jurisdictions in which we operate.

Slide 28
 TCC Hub and Contacts

TCC Hub: Trade Compliance

Policy
http://www.hub.slb.com/display/index.do?id=id2586875 Export Classification
TCC Standard: Compliance Tools
http://www.hub.slb.com/display/index.do?id=id3052255 Customs
Denied Party Screening
Guidelines and
Standards
Movement of Personnel
/ Travel
Organization & Contacts
Sanctions & Embargoes
Training
WesternGeco

Slide 29
 Conclusion

This concludes the Trade Compliance & Customs General

Awareness Training Module.

Slide 30