So Many Feathers on the Scale: Whether and How to Voluntarily Disclose Violations of U.S. Export Controls and Economic Sanctions Laws

摘要

The export control and economic sanctions laws are a minefield for U.S. companies that export products and engage in other forms of cross-border transactions. Mistakes are common, even for diligent, well-intentioned exporters.rnThe company suspecting it has exported an item or technology outside of compliance with these complex laws must consider whether to disclose the violation to the relevant federal agency. Although usually not required by law, a voluntary disclosure can be advisable for many reasons, including avoidance or mitigation of penalties.rnBut two things are true about the vast majority of violations: Most do not remotely threaten the national security of the United States and most are unlikely to be independently discovered by the enforcing agency. The would-be discloser is justified in wondering what is the merit-for the company and for the national security-in making a disclosure. In addition, where the company does decide to disclose, it confronts a host a questions, including what should be disclosed, how, to whom, and when to make the disclosure.rnThis article considers these questions in the context of the three primary U.S. export-control and economic sanctions laws: the International Traffic in Arms Regulations (ITAR), administered by the State Department's Directorate of Defense Trade Controls (DDTC); the Export Administration Regulations (EAR), administered by the Commerce Department's Bureau of Industry and Security (BIS); and the economic sanctions regulations administered by the Treasury Department's Office of Foreign Assets Control (OFAC).