BIS proposes revised guidance for certain export penalties

The Bureau of Industry and Security has published a proposed rule to revise its guidance on charging and penalty determinations to settle administration enforcement cases involving alleged export control violations.    The U.S. Commerce Department’s Bureau of Industry and Security has published a proposed rule to revise its guidance on charging and penalty determinations to settle administration enforcement cases involving alleged violations of the country’s Export Administration Regulations.
   In specific, BIS wants to make the guidance changes for civil penalty determinations, found in EAR’s Supplement No. 1 to part 766, “more predictable and transparent to the public” and bring them in line with those of the Treasury Department’s Office of Foreign Assets Control. 
   OFAC administers most of its sanctions programs under the International Emergency Economic Powers Act (IEEPA), the same authority by which BIS implements EAR. As the starting point for determining civil penalties, OFAC uses the transaction value of the alleged illicit export. Under IEEPA, criminal penalties can reach as much as 20 years in jail and $1 million per violation, and administrative monetary penalties can reach $250,000 or twice the value of the transaction, whichever is greater. 
   Both OFAC and BIS coordinate and cooperate on investigations involving violations of export controls, including programs related to weapons of mass destruction, terrorism, Iran, Sudan, “Specially Designated Nationals” and “Specially Designated Global Terrorists.”
   BIS said its proposed penalty guidance changes would not apply to civil administrative enforcement cases involving violations restrictive trade practices and boycotts (EAR’s part 760).
   BIS’s new guidelines “would provide factors by which violations could be characterized as either egregious or non-egregious and describe the difference in the base penalty amount likely to apply in an enforcement case. The base penalty would depend on whether the violation is egregious or non-egregious and whether or not the case resulted from a voluntary self-disclosure,” the agency said.
   The proposed guidelines may be viewed here. Comments related to the proposed rulemaking are due to BIS by Feb. 26.