Export Enforcement in Focus
New names, new priorities at the Bureau of Industry and Security
by Peter Quinter, guest columnist
Earlier this spring, David Mills, the new Assistant Secretary for Export Enforcement, Bureau of Industry and Security (BIS), US Department of Commerce, and his Special Advisor, Bob Rarog, reviewed the enforcement priorities of BIS for the Export Controls and Economic Sanctions Committee of the American Bar Association’s Section on International Law.
The priorities were established by Eric Hirschhorn, appointed by President Obama and sworn in as Under Secretary of BIS a little over a year ago.
Mills, who has an excellent perspective having been an attorney in private practice and having served Chief of Licensing at the Office of Foreign Assets Control (OFAC), identified the three primary initiatives of export enforcement by the BIS.
1. Efficiency – process administrative cases faster.
2. Education – outreach program to exporting companies.
3. Enforcement – going for the $250,000 maximum penalty or twice the value of the transaction, whichever is greater.
Mills stated that where both OFAC and BIS have jurisdiction over a violation, it is best to file voluntary self-disclosure simultaneously with both agencies. Generally, Special Agents from the BIS Office of Export Enforcement will conduct the investigation thereafter.
Another interesting point was that the Obama Administration remains focused on Iran, preventing the proliferation of weapons of mass destruction (WMD), and prohibiting any transactions with Specially Designated Nationals (SDNs). This is consistent with the US Department of Justice’s National Counter-Proliferation Initiative to increase the detection and prosecution of export control violations. For the past two years since this Initiative started, the number of criminal and civil cases targeting violations of the International Traffic in Arms Regulations (ITAR), Export Administration Regulations (EAR), and trade sanctions has greatly increased. Federal agents from the FBI, Justice, BIS, ICE, OFAC, State, and Defense have investigated and prosecuted companies and individuals for illegally exporting goods and technology not only to countries such as Iran, China, and Cuba, but also to close allies such as Canada, Mexico, Taiwan, and Israel.
What surprised many of the legal experts who practice in the area of export controls was Mills’ statement that a company’s filing of voluntary self-disclosure with BIS will not necessarily protect the employees of that company. Mills was sending a message: “Willful or knowing, as opposed to inadvertent, violations by individuals will be punished.”
He clearly set forth a new policy: “Special Agents of BIS are directed to focus on investigating culpable individuals for criminal prosecution or civil penalties.” He also stated that it is often an appropriate action for the company to terminate the employee who violates the laws of the United States.
[On May 12 in testimony before the House Committee on Foreign Affairs, Under Secretary Hirschhorn discussed BIS enforcement priorities in more detail. You can read his testimony here.]
Please call or email me with any questions or comments.
Copyright © 2011, Becker & Poliakoff
About Peter Quinter
10 May 2012: Peter Quinter is now a Shareholder in the law firm of GrayRobinson and Chair of the firm’s Customs & International Trade Law Group. Based in the firm’s Miami and Ft. Lauderdale offices, Quinter principally represents persons and companies involved in international trade and transport. Editor of the GrayRobinson Customs and International Law Blog, Quinter is widely recognized for his expertise in international and trade law.
You can contact Peter Quinter at firstname.lastname@example.org or at (954) 270-1864.
Date posted: May 31, 2011