Bush administration proposes hefty hike in export violation penalties

Bush administration proposes hefty hike in export violation penalties The Bush administration has proposed federal legislation that would significantly increase the Commerce Department’s fines and penalties for companies that violate U.S. export control regulations.
   The Commerce Department’s Bureau of Industry and Security continues to operate under the 1979 Export Administration Act, which expired in 2001 and has since been reinstated annually through presidential authority under the International Emergency Economic Powers Act (IEEPA).
   IEEPA civil penalties were increased to $50,000 per violation in the reauthorized USA Patriot Act of 2005, signed into law on March 9, 2006. However, for violations committed prior to this amendment, civil penalties continue to be set at the 1979 Export Administration Act’s level of $11,000 per violation.
   Under the Export Enforcement Act, the maximum civil penalty will be $500,000 per violation. The maximum corporate penalties for criminal violations under the proposed legislation would increase from $50,000 under the IEEPA to a maximum $5 million or 10 times the value of the exports involved in the violation. Individuals involved in criminal violations of the act, if convicted, may spend up to 10 years in jail.
   “This act will renew Commerce’s authority to administer the dual-use export control system while we work with Congress on long term, fundamental reform to reflect the national security and economic challenges of the 21st Century,” said Commerce Secretary Carlos Gutierrez in a statement.
   The Bush administration’s proposed export enforcement legislation will also:
   * Provide the Commerce Department’s special agents with statutory overseas investigation authority and expanded undercover authorities.
   * Make permanent provisions protecting confidential business information.
   * Expand the list of criminal violations upon which a denial of export privileges may be based.
   The administration believes the legislation, if implemented, would “give law enforcement officers the vitally important tools necessary ' to keep the most sensitive items out dangerous hands,” Gutierrez said.