The subject Guidance document is available for download HERE. Below is a reprint of the Introduction of the 11-page document.
Foreign governments and other non-state adversaries of the United States are engaged in an aggressive campaign to acquire superior technologies and commodities that are developed, manufactured, and controlled in, and by, the United States. Such acquisitions – when conducted in contravention of U.S. law and policy – undermine the comparative and competitive advantages of U.S. industries and warfighters and, consequently, the national and economic security of the United States.
Thwarting these unlawful efforts is a top priority for the National Security Division (NSD) of the Department of Justice (DOJ). Working in partnership with U.S. Attorneys’ Offices, law enforcement and regulatory agencies, other U.S. government stakeholders, and our foreign government counterparts, NSD utilizes an “all-tools” approach to prevent and combat the unlawful export of commodities, technologies, and services, as well as to block trade and transactions with sanctioned countries and designated individuals and entities.
In particular, NSD has made it a priority to pursue willful export control and sanctions violations by corporate entities and their employees. Working with the U.S. Attorneys’ Offices, NSD aggressively directs and supports investigations of corporate criminal misconduct through grand jury subpoenas, search warrants, witness interviews, and other mechanisms to obtain evidence from multinational corporations operating in U.S. markets or utilizing the U.S. financial system. Where appropriate, NSD pursues international assistance to obtain the necessary evidence to build criminal cases. Where such investigations reveal willful violations of U.S. export controls and sanctions, NSD and U.S. Attorneys’ Offices seek to hold corporate entities criminally liable and prosecute culpable employees individually.Consequently, business organizations and their employees are at the forefront of our enforcement efforts. As the gatekeepers of our export-controlled technologies, business organizations play a vital role in protecting our national security. However, when NSD learns of willful violations of U.S. export controls and sanctions, NSD is committed to using all of its tools to protect our national security and deter similar criminal misconduct.
This Guidance memorializes the policy of NSD to encourage business organizations to voluntarily self-disclose criminal violations of the statutes implementing the U.S. government’s primary export control and sanctions regimes – the Arms Export Control Act (AECA), 22 U.S.C. § 2778, and the International Emergency Economic Powers Act (IEEPA), 50 U.S.C. § 1705.
This Guidance applies only to export control and sanctions violations. It sets forth the criteria that NSD, through the Counterintelligence and Export Control Section (CES) and in partnership with the U.S. Attorneys’ Offices, uses in exercising its prosecutorial discretion in this area and in determining the possible benefits that could be afforded to an organization that makes a voluntary self-disclosure (VSD), as defined below. This Guidance also implements in export control and sanctions cases the memorandum of the Deputy Attorney General dated September 9, 2015, promoting greater accountability for individual corporate defendants (DAG Memo on Individual Accountability), as well as the November 2015 revisions to the Principles of Federal Prosecution of Business Organizations set forth in the U.S. Attorneys’ Manual (USAM Principles). See USAM 9-28.000 and USAM 9-28.900.
Almost all criminal violations of U.S. export controls and sanctions harm the national security or have the potential to cause such harm. This threat to national security informs how NSD and U.S. Attorneys’ Offices arrive at an appropriate resolution with a business organization and distinguishes these cases from other types of corporate wrongdoing. In determining what credit to give an organization that voluntarily self-discloses illegal export control or sanctions conduct, fully cooperates, and remediates flaws in its controls and compliance program, federal prosecutors must balance the goal of encouraging such disclosures and cooperation with the goal of deterring these very serious offenses. If successful, this Guidance will serve to further deter individuals and companies from engaging in export control and sanctions violations in the first place, encourage companies to implement strong export control and sanctions compliance programs to prevent and detect such violations, and, consistent with the DAG Memo on Individual Accountability, increase the ability of NSD and U.S. Attorneys’ Offices to prosecute individual wrongdoers whose conduct might otherwise have gone undiscovered or been impossible to prove.
This Guidance aims to provide greater transparency about what is required from companies seeking credit for voluntarily self-disclosing potential criminal conduct, fully cooperating with an investigation, and remediating. Accordingly, the Guidance first explains what constitutes a VSD, full cooperation, and timely and appropriate remediation. Second, the Guidance provides examples of aggravating factors that, if present to a substantial degree, could limit the credit an organization might otherwise receive, though the company would still find itself in a better position than if it had not submitted a VSD, cooperated, and remediated. Third, the Guidance explains the possible credit that may be afforded to a business organization that complies with the mandates set out below, including the disclosure of all relevant facts about the individuals involved in the wrongdoing. Finally, the Guidance provides sample scenarios that demonstrate the application of this policy.
Ordinarily, when an organization voluntarily self-discloses violations of U.S. export controls and sanctions, it presents its VSD to the appropriate regulatory agency under the procedures set forth in the agency’s regulations. It is not the purpose of this Guidance to alter that practice. Business entities should continue to submit VSDs to the Department of State, Directorate of Defense Trade Controls (DDTC) for violations of the International Traffic in Arms Regulations (ITAR); to the Department of Commerce, Bureau of Industry Security (BIS) for violations of the Export Administration Regulations (EAR); and to the Department of the Treasury, Office of Foreign Assets Control (OFAC), for violations of U.S. sanctions regulations. However, as discussed further below, when an organization, including its counsel, becomes aware that the violations may have been willful, it should within a reasonably prompt time also submit a VSD to CES.
This Guidance does not supplant the USAM Principles. Prosecutors must consider the ten factors set forth in the USAM when determining how to resolve criminal investigations of organizations. However, this Guidance does set forth the way that NSD and U.S. Attorneys’ Offices will evaluate credit for companies that voluntary self-disclose, fully cooperate, and remediate in export control and sanctions cases.