Penalties for violating U.S. export control regulations and sanctions can apply to individuals, companies and institutions.
Voluntary Disclosures
Voluntary disclosures (or self-disclosures) by companies who believe they may have violated applicable export controls generally result in "settlement agreements". Because disclosures generally evidence intent to comply with U.S. export control requirements, and demonstrate the ability to identify violations and correct discrepancies,
they rarely lead to criminal prosecution, instead reducing most cases fines and other administrative penalties.
Criminal and Civil Penalties under ITAR, EAR and OFAC
Penalties are classified as either criminal, or civil, with intent being the crucial differentiator. Incarceration applies only in criminal cases.
- International Traffic in-Arms Regulations (ITAR) more +
Criminal: Maximum $1,000,000 per violation or up to ten years in prison, per violation
Civil: Maximum $500,000 per violation
- Export Administration Regulations (EAR) more +
Criminal
Wilful Violation: knowledge that the items at issue will be used for the benefit of, or that the destination or intended destination of the items is, any country to which exports are restricted for national security or foreign policy reasons
- Corporate — Maximum $1,000,000 or five times the value of the export(s), whichever is greater, per violation
- Individual — Maximum $250,000 and imprisonment of up to 10 years per violation or both, per violation
Knowing Violation: the act is committed intentionally, but there is no specific intent to break the law
- Corporate — Maximum $50,000 or five times the value of the export(s), whichever is greater
- Individual — Maximum $50,000 per violation and up to five years imprisonment, or both
Civil
Maximum $12,000 per violation or $120,000 per violation for items involving national security
- Office of Foreign Assets Control (OFAC) more +
Criminal
- Corporate — Maximum $1,000,000 per violation, and up to $100,000 in individual fines, per violation
- Individual — Maximum $250,000 or up to ten years in prison, or both, per violation
Civil
- Corporate — Maximum $55,000 per violation, or twice the amount of the transaction
- Individual — Maximum $55,000 per violation
Administrative Penalties
There are also four categories of administrative penalties that can be applied, alone, or in concert with regulatory penalties. more +
- Warning Letters
Administrative determinations that a violation has occurred, but that a "good faith effort" (mitigating factor) to comply with the law and to cooperate with an investigation has been shown with no aggravating factors.
- Denial Order / Interim Suspension
Denial of U.S. export privileges and access to U.S.-origin goods and technology, from any source, for a specified period of time or indefinitely and may be narrow in scope,
such as a restriction on the export of specific items or to specific destinations.
- Seizure & Forfeiture
Goods or technical data which have been, are being, or are intended to be exported or shipped from the U.S. in violation of the Export Administration Act (EAA) or International Traffic in Arms Regulations (ITAR) are subject to seizure and forfeiture, includes vehicles carrying such goods or technical data.
- Debarment
Includes exclusion from practice or denial of export privileges including revocation of contracts, loss of funding, debarment from government contracts or implementation of additional compliance measures.
How we can Help
Visual Compliance provides robust, cost-effective automation solutions and regulatory content to manage all of these aspects of foreign trade compliance. With over 30 years of experience helping companies easily gain control and visibility over their compliance issues and processes, our solutions are relied on by more than 4,000 companies at home, and abroad.
For more information, call toll-free 1-877-328-7866 and talk to one of our foreign trade compliance consultants. They'll help you analyze your requirements, evaluate your options, and provide focused demonstrations. Or send an email.
