On January 16, 2024, Bureau of Industry and Security (BIS) Assistant Secretary for Export Enforcement Matthew Axelrod announced further updates to the EAR voluntary self-disclosure (VSD) process, all designed to incentivize the prioritization of export control compliance resources of the U.S. Government, industry, and academia.
The Office of Export Enforcement (OEE) released a Memorandum to accompany the announcements which are now reflected on the BIS VSD webpage. A summary of the four key changes follows:
(1) First, OEE clarified that its policies with respect to fast-tracking its processing of "minor" or "technical" voluntary self-disclosures applies to non-significant violations, which it considers to be those resulting from "a good-faith misinterpretation or the checking of a wrong box on a form," and generally those in which "no aggravating factors are present."
(2) For such VSDs, OEE announced that it will no longer require the full five-year lookback unless it specifically requests it. Additionally, disclosing parties may now submit an abbreviated narrative account of the facts and circumstances giving rise to the violation, which "should briefly describe the nature of the violations as outlined in § 746.5(c)(3), but need not include all of the accompanying documentation outlined in Section § 764.5(c)(4), unless specifically requested by OEE." The OEE VSD webpage also now clarifies that parties can bundle these disclosures, if close in time, and submit on a quarterly basis.
(3) For items that were originally unlawfully exported, BIS has updated the VSD webpage to suggest that courtesy copies of requests to the Office of Exporter Services to engage in activities that would otherwise be prohibited by § 764.2(e) (commonly referred to as GP10 waiver requests) should be provided to OEE via email to expedite such requests. Furthermore, for parties seeking to return an unlawfully exported item back to the United States, OEE will presumptively recommend BIS authorize such reexports.
(4) Lastly, BIS is now formalizing the COVID-era policy of strongly encouraging the submission of VSDs via email (although it will still accept hard-copy submissions).
The Assistant Secretary delivered remarks announcing the changes during a discussion on corporate voluntary self-disclosure policies at NYU School of Law hosted by the Program on Corporate Compliance and Enforcement. Following his announcement, a panel of export control experts, including OEE Director John Sonderman and C&M Partner Jana del-Cerro, discussed the VSD process and possible implications of the changes announced.
Crowell will continue to monitor developments regarding the voluntary self-disclosure process.
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