BIS updates export regulations with new self-disclosure and penalty guidelines
The United States Department of Commerce’s Bureau of Industry and Security (‘BIS’) has finalised a new rule that amends the Export Administration Regulations (‘EAR’) bringing significant changes to the voluntary self-disclosure process and administrative enforcement procedures. The changes are set to take effect on 16 September 2024.
The updated rule revises § 764.5 of the EAR, which pertains to the procedures for submitting voluntary self-disclosures (‘VSDs’). According to the rule, these changes ‘revise provisions related to the voluntary self-disclosure process for exporters who believe that they may have violated the EAR, or any order, license or authorization issued thereunder.’
Additionally, the rule updates Supplement No. 1 to part 766, providing ‘clarified guidance on charging and penalty determinations in settlement of administrative enforcement cases.’ These revisions are meant to align with policies announced in BIS policy memoranda since 2022 and refine how BIS calculates penalties for administrative violations.
The updates stem from the Export Control Reform Act of 2018 (‘ECRA’), enacted as part of the John S. McCain National Defense Authorization Act for Fiscal Year 2019. Under ECRA, the Secretary of Commerce is authorised to impose civil penalties for violations, including ‘a fine of not more than $300,000 or an amount that is twice the value of the transaction that is the basis of the violation,’ and additional sanctions like ‘revocation of a license issued under [ECRA] or a prohibition on the person’s ability to export, reexport, or in-country transfer any items controlled under [ECRA].’
