By: Danielle McClellan
On October 16, 2007 President Bush signed into law the International Emergency Economic Powers (IEEPA) Enhancement Act to enhance administrative and criminal penalties that can be imposed under the IEEPA. IEEPA currently is the underlying law that authorized the Export Administration Regulation (EAR) controls on commercial and dual use items. Certain aspects of the act have been amended to explain penalties that may be assessed for unlawful acts.
The Enhancement Act amends the current IEEPA by clarifying that civil penalties may be assessed against those who conspire to violate, or cause violation of any license, order, regulation or prohibition of the United States Code. Violators can now be fined up to $1,000,000 and/or up to 20 years in prison for criminal penalties. Criminal liability will also be included, and is described as anyone who “willfully conspires to commit, or aids or abets in the commission of” an unlawful act. Any criminal enforcement actions commenced on or after October 16, 2007 will be subject to the new penalties. Civil penalties will result in a fine amounting to the greater of $250,000 or twice the value of the transaction that is the basis of the violation. Any civil enforcement actions that are pending, meaning a Final Order has not been signed, or commenced on or after October 16, 2007 will be under the new civil penalties.
There are however, five circumstances that will be general exceptions to the IEEPA Enhancement Act. Those practices will include:
- Cases that settle before filing of a charging letter with an Administrative Law Judge, BIS usually charges only the most serious violation per transaction.
- Cases that settle before filing of a charging letter with an Administrative Law Judge BIS may also charge each violation not directly connected to a specific export or antiboycott related transaction which may include conspiracy, evasion, or false statements made to a Special Agent.
- If BIS chooses to file a charging letter with an Administrative Law Judge because of mutually agreeable settlement cannot be reached, then BIS will reserve its right to proceed with all available charges based on th4e facts presented.
- BIS draws meaningful distinctions based upon the relative seriousness of any offense. More serious offenses result in higher penalties for the purposes of settlement discussions.
- BIS affords great weight mitigation of up to a 25% reduction of the amount of penalties to be assessed for the existence of an effective export compliance program in place before the violation and later upgraded.
- For all valid Voluntary Self-Disclosures, BIS gives great weight mitigation that generally results in a reduction of at least 50% of the calculated penalty-and does so after considering the aggravating and mitigating factors in the case.
Mario Mancuso, Secretary of Commerce for Industry and Security, explains that, “The new law provides significant additional support for our cases, which we intend to apply in an equitable, deliberative and rigorous way. Most important, we think the enhancements will better align incentives to improve overall compliance with our regulations.”
BIS Factsheet: Charging and Penalty Practices (PDF)
BIS news release