Export Controls Voluntary Disclosure
New DOJ Policy Encourages Voluntary Self-Disclosure
Export Controls Compliance
Any company considering exporting goods or services quickly discovers the export control regulations are a confusing and interlocking set of complex requirements that are a potential minefield. Even the most diligent companies with tight control processes can have compliance violations and face an enforcement action. It is critical to handle potential export control violations properly to mitigate the potential for large fines, other administrative actions such as suspension or debarment, or criminal sanctions. In December 2019 the DOJ issued a revised voluntary self-disclosure policy to encourage companies to self-report potentially willful violations directly to the DOJ National Security Division (NSD).
The Revised DOJ Voluntary Self-Disclosure Policy
The revised DOJ policy offers substantial mitigation for voluntary self-disclosure, and provides that if a company (1) voluntarily self-discloses willful export control violations to the NSD Counterintelligence and Export Controls Section, (2) fully cooperates, and (3) timely and appropriately remediates the violation, then there is a presumption that the company will receive a non-prosecution agreement and will not pay a fine, absent aggravating factors. If there are aggravating factors, a voluntary self-disclosure can still result in a reduced fine that is at least 50% less than the amount that could be imposed, and avoid a monitor if the company instituted an effective export controls compliance system.
Revised Policy Key Considerations
• The revised policy encourages voluntary self-disclosure of “willful” violations. An act is willful if done with the knowledge that it is illegal.
• The voluntary self-disclosure must be made before the government knows of the act.
• Voluntary self-disclosure must be made to the NSD; voluntary disclosures to another government agency, including DDTC, Commerce, Census Bureau, or OFAC, will not count.
• To be effective, a company must report potential violations to all agencies involved in regulating the conduct. These days violations are reported between the enforcement agencies, which means normally a voluntary self-disclosure must be made to at least two or three separate agencies, that each have different reporting requirements and policies.
• The company must disclose all relevant facts known to it at the time of the disclosure, including any individuals substantially involved in or responsible for the misconduct.
• There must be “full cooperation” which means providing all relevant facts, including from an internal investigation, voluntarily, and not just when specifically asked.
• Remediation must be complete, including full repayment of gains from the violation.
• The company must fully analyze the conduct, and institute an effective compliance system that addresses and solves the underlying issues.
Additional Information
If you have questions regarding export controls, voluntary self-disclosures or other federal government contract issues, contact the professionals at Williamson Law Group at (301) 788-8198 for confidential and candid assistance and counsel, or e-mail our attorneys at info@williamsonlawgroup.com.
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