BIS Issues Guidance for
Settlement of Administrative Enforcement Cases

The Commerce Department’s Bureau of Industry and Security (BIS) today published in the Federal Register penalty guidance for the settlement of administrative enforcement cases under the Export Administration Regulations (EAR).

In announcing the publication of the guidance, Under Secretary of Commerce Kenneth I. Juster stated: “The more the public understands how BIS makes penalty determinations in the settlement of administrative enforcement cases, the more consistent and effective our export control system will be.”

The new 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 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 on the our Web site.