Violations of the Export Administration Regulations, 15 C.F.R. Parts 730-774 (EAR) may be subject to both criminal and administrative penalties. Under the Export Control Reform Act of 2018 (50 U.S.C. §§ 4801-4852) (ECRA), criminal penalties can include up to 20 years of imprisonment and up to $1 million in fines per violation, or both. Administrative monetary penalties can reach up to $300,000 per violation or twice the value of the transaction, whichever is greater. In general, the administrative monetary penalty maximum is adjusted for inflation annually.

Violators may also be subject to the denial of their export privileges as further described below. 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.

Administrative Enforcement Cases

Penalty Guidance

BIS issued Administrative Enforcement Guidelines in 2018 to promote greater transparency and predictability to the administrative enforcement process. These guidelines also more closely align the administrative enforcement policies and procedures of BIS with those of the Department of the Treasury’s Office of Foreign Assets Control.

Administrative Case Review Board

The ACRB is an internal body that advises the Assistant Secretary for Export Enforcement at important stages of administrative cases and assists the Assistant Secretary, along with other Export Enforcement (EE) officials and attorneys in the Office of Chief Counsel for Industry and Security (OCC), to determine EE’s position related to the prosecution of administrative cases. A primary goal of the ACRB is to help promote administrative and legal best practices in EE enforcement policy and to ensure that all positions taken by EE in administrative enforcement cases are consistent, fair, and in line with overall BIS program and enforcement goals.

Temporary Denial Orders

Temporary Denial Orders (TDOs) are issued by the Assistant Secretary for Export Enforcement to deny any or (typically) all of the export privileges of a company or individual to prevent an imminent or ongoing 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 1760(e) Denials

Section 1760(e) of ECRA permits, at the discretion of the Secretary of Commerce, the denial of export privileges of any person convicted of certain criminal violations for a period of up to 10 years beginning on the date of conviction. In addition, Section 1760(e) provides that the Secretary of Commerce may revoke any license or other authorization in which such person has an interest at the time of the conviction. Previously under the authority of the Export Administration Act (EAA), these denial orders were referred to as “Section 11(h) denials,” which identified the relevant provision of the EAA.

The criminal violations eligible for a denial order include:

• Violations of ECRA or the International Emergency Economic Powers Act (or any regulation, license, or order issued under these laws);
• Violations of Section 38 of the Arms Export Control Act;
• Violations of one of several espionage-related statutes; and 
• Violations related to Section 371 (conspiracy), Section 554 (smuggling) and Section 1001 (false statements) under Title 18 of the U.S. Code.  

Enforcement Actions