EAR Violations and BIS Policy Shift: Incentivized Self-Disclosure; Aggravated Punishments; Third-Party Whistleblowing
Weighing the Risks and Benefits of Filing a VSD; Making a Whistleblower Complaint
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
International
- event Date
Wednesday, September 27, 2023
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
-
This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE webinar will address the U.S. Department of Commerce's recent policy shift that increases the incentives for companies to voluntarily self-disclose (VSD) possible EAR violations, particularly when "significant," or risk serious penalties. The policy also incentivizes companies to report on others when violations are suspected (e.g., competitors). The panel will discuss what may qualify as "significant" possible violations and how to decide whether to file a VSD, and/or to blow the whistle on others. The panel will also describe best practices for limiting liability in cases of significant EAR violations.
Mr. McBride represents companies and individuals in international trade regulatory, compliance, investigative, and enforcement matters involving U.S. economic sanctions and economic embargoes, U.S. export controls, FCPA, U.S. anti-boycott controls, U.S. customs and other import controls, anti-money laundering and other banking controls, and U.S. international trade enforcement and regulatory actions.
Ms. Baj focuses her practice on export controls and economic sanctions laws and regulations, anti-corruption investigations and compliance, international trade, and security clearance issues. She has represented clients in the aerospace and defense, metals and mining, telecommunications, software, lumber, nuclear, capital equipment, and food processing industries.
Mr. Sagrans has over 25 years of experience in trade and related regulatory and government compliance including EAR, ITAR, CWC, OFAC, CFIUS, FCPA, FARs, DFARs, anti-dumping, anti-trust, anti-boycott and other areas, though his greatest concentration has been in export controls. By far most of these past years have been spent in the private sector, however, Mr. Sagrans worked briefly at the Directorate of Defense Trade Controls in the Department of State and in the Bureau of Industry and Security at the Department of Commerce prior to coming to DuPont.
The U.S. Department of Commerce's Bureau of Industry and Security (BIS) recently released guidance regarding a policy shift that sharpens the incentives for VSDs by companies, particularly of significant EAR violations, as well as reporting others' violations. This policy shift comes at a time of increased enforcement activity and record fines, such as the $300 million penalty against Seagate Technology L.L.C. in April, the largest standalone administrative penalty in BIS history and an unprecedented extraterritorial enforcement action based on the "foreign direct product" rule.
Prior to the policy shift, companies could receive mitigation of civil penalties if they filed a VSD, yet they were not formally penalized if they did not come forward. Now, however, a party's choice not to file a VSD when they've discovered a significant possible violation of the EAR can be considered an aggravating factor, resulting in increased penalties. In addition to incentivizing self-disclosure, the policy shift also encourages whistleblowing. Reporting others' violations can now be considered a mitigating factor if the reporting party is subsequently under investigation.
Listen as our expert panel discusses the effects of the BIS policy shift on companies, what companies and their counsel should consider when determining whether to file a VSD or blow the whistle on others, and best practices for compliance to limit liability.
- Overview of the BIS guidance and increased enforcement activity
- VSDs
- "Significant" possible violations
- Benefits and risks of filing a VSD
- Incentivized whistleblowing
- Benefits (and risks) to the reporting party
- Best practices for compliance and risk assessment
The panel will review these and other important considerations:
- What are "significant" possible violations as compared to minor or technical infractions?
- What are best practices for addressing possible EAR violations and determining whether they are "significant" enough to file a VSD?
- What should counsel and their clients consider when determining whether and when to file a VSD?
- How does the BIS policy shift benefit whistleblowers and what risks are involved?
