Where Industry and Security Intersect
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Overseas Export Control Officer Program:
The mission of the Bureau of Industry and Security (BIS) Export Enforcement is to protect U.S. national security, homeland security, foreign policy, and economic interests through a law enforcement program focused on: sensitive exports to hostile entities or those that engage in onward proliferation; prohibited foreign boycotts; and related public safety laws. BIS Export Enforcement (EE) is an elite law enforcement organization recognized for its expertise, professionalism, integrity, and accomplishments. EE accomplishes its mission through preventative and investigative enforcement activities and then, pursuing appropriate criminal and administrative sanctions against export violators. EE works with the Department of Justice to impose criminal sanctions for violations, including incarceration and fines, and with the Department of Commerce's Office of Chief Counsel for Industry and Security to impose civil fines and denials of export privileges. EE also works closely with other Federal law enforcement agencies, including the FBI and the Department of Homeland Security, when conducting investigations or preventative actions.
BIS places the highest priority on stopping illegal exports and related violations before they occur. Besides outreach activities to the export community, prevention also includes actions that directly stop violations before they occur, such as recommending denial of license applications, conducting pre-license checks and pre-shipment inspections, detaining shipments suspected of violations of the EAR, placing parties on the Unverified List, screening foreign nationals for appropriate access to controlled technology, and issuing warning letters to industry partners (76 in 2004).
EE’s Office of Enforcement Analysis (OEA) screens all export license applications to ensure export control enforcement information is considered before any final license decision is made. An interagency committee reviews license applications to assess diversion risks, to identify potential violations, and to determine the reliability of those receiving controlled U.S-origin commodities or technical data. In some instances, a pre-license check is conducted to determine the bona fides of the transaction and the end-user. EE factors the result of this check into the licensing recommendation EE makes to BIS’s licensing offices. Post-shipment verifications also help the U.S. Government ensure that an item that was exported is being used in accordance with U.S. export control regulations and the terms of the export license.
When BIS cannot conduct a pre-license check or a post-shipment verification for reasons outside of the U.S. Government’s control, the names and countries of foreign persons who were parties to the transaction are placed on the Unverified List. That list includes persons involved in export transactions where BIS has not been able to verify the existence or authenticity of the end user, intermediate consignee, ultimate consignee, or other party to the export transaction. Any transaction to which a listed person is a party will be deemed by BIS to raise a “red flag” with respect to such transaction within the meaning of the guidance set forth in Supplement No. 3 to 15 C.F.R. Part 732.
EE conducts on-going reviews of AES records to uncover attempts to export items illegally and to detain illegal shipments. EE specifically targets items for export to destinations of concern and exports of proliferation concern. Through the AES Review Program, EE also identifies past shipments that may have violated the Export Administration Regulations and refers them for further investigation. Hundreds of investigations of suspected export control violations occur annually, based on the routine review of AES records.
The Visa Application Review Program is conducted to prevent unauthorized access to controlled U.S. technology or technical data by foreign nationals visiting the United States. EE reviews information on visa applications to detect and prevent possible violations of the EAR. Under this program, EE makes recommendations to the U.S. Department of State against issuing visas for technology control reasons.
Temporary Denial Orders are issued by the Assistant Secretary for Export Enforcement, denying any or (typically) all of the export privileges of a company or individual to prevent an imminent or on-going export control violation. These orders are issued ex parte for a renewable 180-day period and cut off not only the right to export from the United States, but also the right to receive or participate in exports from the United States.
Section 11(h) of the Export Administration Act provides that, at the discretion of the Secretary of Commerce, no person convicted of a violation of the EAA, IEEPA, or Section 38 of the Arms Export Control Act (or any regulation, license, or order issued under any of these laws) will be eligible to apply for or use any export license issued under the EAA for up to ten years from the date of the conviction. In addition, Section 11(h) provides that the Secretary of Commerce may revoke any export license which the party had at the time of the conviction.
EE’s Office of Export Enforcement (OEE), as the primary enforcement arm of BIS, works to keep the most sensitive goods out the most dangerous hands. OEE conducts its operations from Headquarters and nine field locations, in Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York, San Jose and Washington, DC. OEE works cooperatively with the exporting community to prevent violations. When prevention is not achieved, OEE conducts investigations to gather evidence to support criminal and administrative sanctions.
OEE Special Agents are sworn Federal law enforcement officers with authority to make arrests, execute search and arrest warrants, serve subpoenas, and detain and seize goods about to be illegally exported. OEE investigations are initiated on information and intelligence obtained from a variety of sources, and are conducted to objectively and thoroughly gather testimony and evidence of alleged or suspected violations of dual-use export control laws. OEE works closely with attorneys with the Department of Justice and BIS’s Office of Chief Counsel to prosecute criminal and administrative cases. A summary of recent significant OEE cases may be viewed here.
As part of BIS's international efforts to achieve its enforcement mission, BIS sends experienced OEE Special Agents overseas as Export Control Officers (ECOs) at key U.S. embassies in Beijing, China; Abu Dhabi, UAE; New Delhi, India; Moscow, Russia; and Hong Kong, China. The principal mission of the ECOs is to ensure that U.S. dual-use goods entering their region are used in accordance with U.S. export control laws and regulations. Compliance verification is accomplished through targeted end-use checks and by working with the host governments and local businesses to ensure that they understand and comply with U.S. export control laws and regulations. ECOs also work with host governments and local businesses to provide information and appropriate training to facilitate better understanding of U.S. dual-use export control laws and regulations, and to help develop indigenous export control capabilities.
Many end use checks are conducted through BIS’s Sentinel Program. Trained OEE criminal investigators are sent to a country to visit the end-users of sensitive controlled commodities and determine whether these items are being used in accordance with license conditions. Sentinel teams assess the suitability of foreign end-users to receive U.S.-origin licensed goods and technology, assess prospective end-users on pending license applications for diversion risk, and conduct educational outreach to foreign trade groups. In this way, Sentinel trips help to create the confidence needed to foster trade while strengthening U.S. national security.
Violations of the EAR may be subject to both criminal and administrative penalties. Criminal penalties can reach up to 10 years imprisonment and $1 million per violation. Administrative penalties can reach $11,000 per violation, and $120,000 per violation in certain administrative cases involving national security issues. Endnote
Violators may also be subject to denial of their export privileges. A denial of export privileges prohibits a person from participating in any way in any transaction subject to the EAR. Furthermore, it is unlawful for other businesses and individuals to participate in any way in an export transaction subject to the EAR with a denied person.
It should be noted that in most cases, BIS reaches negotiated settlements in its administrative cases prior to a formal administrative hearing. Those negotiated settlements are often reached as a result of voluntary self-disclosures (VSDs) of violations by companies and individuals. BIS considers VSDs to be a "great weight" mitigating factor when negotiating settlements of administrative cases. To encourage VSDs, in appropriate cases, fines and other administrative penalties may be significantly reduced. Guidance regarding administrative penalties is provided in Supplement No. 1 of Part 766 of the EAR.
Pursuant to Part 764.5 of the EAR, the information constituting a voluntary self-disclosure or any other correspondence pertaining to a voluntary self-disclosure may be submitted to:
Director, Office of Export Enforcement
1401 Constitution, Ave.
Room H4514
Washington, DC 20230
Tel: (202) 482 5036
Facsimile: (202) 482-5889
On February 20, 2004, the Commerce Department’s Bureau of Industry and Security published in the Federal Register penalty guidance for the settlement of administrative enforcement cases under the Export Administration Regulations (EAR).
The guidance provides the public with a comprehensive description of how BIS determines appropriate penalties in the settlement of administrative enforcement cases. It explains that BIS carefully considers each settlement offer in light of the facts and circumstances of each case, relevant precedent, and the appropriate level of penalty and deterrent effect.
The guidance identifies both general factors, such as the destination of the export and degree of willfulness involved in violations, and specific mitigating and aggravating factors that BIS typically takes into account in determining an appropriate penalty. The guidance also encourages parties to provide information to BIS that would be helpful in the application of the guidance to their cases.
Under the guidance, voluntary self-disclosure of violations are given “great weight” as a mitigating factor and are typically considered in deciding whether violations should be addressed by a warning letter rather than a penalty. Aggravating factors that receive “great weight” include a deliberate effort to hide or conceal violations and a serious disregard for export compliance responsibilities.
BIS finalized this guidance after receiving and carefully considering public comments on the proposed guidance. In response to these comments, BIS made several revisions, including a clarification of the mitigating effect of post-violation compliance efforts and of the factors BIS usually considers in deciding whether to issue a warning letter instead of bringing an administrative enforcement case.
The final rule adopting the guidance can be accessed by clicking here .
The Office of Antiboycott Compliance (OAC) enforces the EAR’s antiboycott provisions. Implemented to support countries friendly to the U.S. and eliminate impediments to the U.S. economy, the antiboycott regulations direct U.S. businesses not to participate in foreign boycotts that the U.S. does not sanction. OAC provides extensive guidance to the exporting community concerning the application of the regulations and trends in boycott activity through its telephone and E-mail advice line and speaking engagements to trade associations and banking groups. When preventative measures fail, OAC pursues criminal and administrative sanctions in matters that include furnishing boycott-related information, refusal to deal with blacklisted businesses, and discrimination for a boycott purpose based on religion or national origin. Please visit the antiboycott section of the BIS website www.bis.doc.gov/AntiboycottCompliance/ for detailed information and if you have a question about any boycott-related matter, please contact the OAC advice line at (202)482-2381 or via the E-mail link.
These violations are based on the Export Administration Act of 1979 (50 U.S.C. app. §§ 2401- 2420 (2000)), as amended, and inflation adjustments made in 15 C.F.R. § 6.4 (2004). From August 21, 1994 through November 12, 2000, the Act was in lapse. During that period, the President, through Executive Order 12924, which had been extended by successive Presidential Notices, the last of which was August 3, 2000 (3 C.F.R., 2000 Comp. 397 (2001)), continued the Regulations in effect under the International Emergency Economic Powers Act (50 U.S.C. §§ 1701 - 1706 (2000)) (“IEEPA”). On November 13, 2000, the Act was reauthorized by Pub. L. No. 106-508 (114 Stat. 2360 (2000)) and it remained in effect through August 20, 2001. Executive Order 13222 of August 17, 2001 (3 C.F.R., 2001 Comp. 783 (2002)), which has been extended by successive Presidential Notices, the most recent being that of August 6, 2004 (69 Fed. Reg. 48763, August 10, 2004), continues the Regulations in effect under IEEPA.
