DOJ Scrutiny of Export Controls and Sanctions Violations: Mitigating Risk of Corporate Criminal Prosecution

Criminal liability may be incurred by companies when employees or agents violate export controls or sanctions laws under various federal criminal statutes. Counsel should be able to guide their corporate clients through the steps they should take to minimize such criminal exposure. 

Those steps include maintaining robust compliance programs with rigorous due diligence, oversight, and auditing capabilities to detect and address misconduct. However, if wrongdoing occurs, companies may consider taking advantage of the NSD's Enforcement Policy for Business Organizations (the Policy) by promptly initiating internal investigations, identifying root causes of the compliance violations, taking appropriate corrective actions, and timely submission of a voluntary self-disclosure. 

Recent cases demonstrate how companies that have taken advantage of the Policy have benefited when the NSD decides not to prosecute based on the companies' proactive measures. For example, when Universities Space Research Association (USRA) received an inquiry from NASA about the sale of software licenses to China-based purchasers, the company promptly began an investigation. When the suspected employee admitted to wrongdoing, the company quickly self-disclosed the violations to NSD within days of the employee's admission. The DOJ declined to prosecute USRA for several reasons including its timely and voluntary self-disclosure of the wrongdoing. 

Listen as our expert panel examines under what theories of liability companies may be held criminally liable for export controls and sanctions violations committed by their employees and agents. The panel will discuss lessons that can be learned from recent decisions where the DOJ declined criminal prosecution, identify measures that companies can take to mitigate risk of criminal prosecution when an employee or agent violates export controls or sanctions laws, and outline the various factors that weigh into a voluntary self-disclosure decision.

I. Introduction

II. Relevant federal statutes and theories of corporate criminal liability

III. Steps that companies can take to mitigate risk of criminal prosecution

A. To prevent wrongdoing

1. Compliance programs

2. Due diligence, oversight, and auditing

B. When wrongdoing occurs

1. Investigations

2. Corrective actions

3. Voluntary self-disclosure considerations

IV. Lessons from recent cases

V. Practitioner takeaways

The panel will review these and other important issues:

• Under what theories of liability may companies be held criminally liable for employee or agent violations of export controls or sanctions laws?
• What measures can companies put into place to mitigate the risk of this type of wrongdoing from occurring?
• What steps should companies follow when they discover that an employee's or agent's wrongdoing has already occurred?
• What are best practices for helping clients create a robust compliance program? For guiding clients through an NSD investigation?