BIS Revises Guidance Regarding EAR Enforcement Cases

On Wednesday, June 22 the Department of Commerce, Bureau of Industry and Security (BIS) published (81 FR 40499-40511) updated guidance (found in Supplement No. 1 to part 766) regarding violations of the Export Administration Regulations (EAR). 

The guidance amends the EAR to make civil penalty decisions more transparent and aligns them with the Treasury Department's Office of Foreign Assets Control (OFAC). 

OFAC criminal penalties can reach 20 years imprisonment and $1 million per violation.  OFAC civil penalties use the transaction value as the starting point and can reach $250,000 or twice the value of the transaction, whichever is greater (Economic Sanctions Enforcement Guidelines). 

The updated guidance does not apply to alleged violations under part 760 of the EAR - Restrictive Trade Practices and Boycotts or to cases that are pending prior to July 22, 2016. 

The effective date of the final rule change is July 22, 2016. 

Key Link(s):

• Guidance on OFAC Enforcement Policy
• OFAC Enforcement Guidelines
• 15 CFR 766 - Guidance on Charging and Penalty Determinations in Settlement of Administrative Enforcement Cases

DOJ Launches New FCPA Prosecutorial Guidance Pilot Program

On April 5, 2016 the Department of Justice (DOJ) Criminal Division announced a new one-year pilot program within the Fraud Section's FCPA Unit.  The pilot program provides guidance to DOJ prosecutors for resolutions in FCPA cases.  The program was designed to assist companies with their decision making process as to whether they should voluntarily self-disclose FCPA violations, cooperate with the Fraud Section, and when appropriate, correct gaps in their controls and compliance programs. 

The program describes what is meant by "voluntary self-disclosure", "full cooperation", and "timely and appropriate remediation".  The guidance states that when a company cooperates, remediates, and voluntarily self-discloses violations, it will be eligible for the full range of mitigation credit.  In the event a criminal resolution is warranted, a company may be granted a reduction of up to 50 percent below the low end of the applicable U.S. Sentencing Guidelines range.  In addition the company would generally not require the appointment of a monitor.

What are the reader's thoughts on the value of this pilot program?   

Related Documents:

• "Individual Accountability for Corporate Wrongdoing", by Deputy Attorney General Sally Yates, on September 9, 2015
• "The Fraud Section's Foreign Corrupt Practices Act Enforcement Plan and Guidance" on April 5, 2016