BIS reports no slowdown in voluntary self-disclosures

Concerns that U.S. companies would stop making voluntary self-disclosures of U.S. export control violations due to the drastic increase in penalty amounts have so far been unfounded, according to the Commerce Department's Bureau of Industry and Security.

Voluntary self-disclosures have not dried up like a desert, said Kevin Dellicolli, deputy assistance secretary of export enforcement for the Commerce Department, to industry members of the Regulations and Procedures Technical Advisory Committee in Washington Tuesday.

The rise in penalties doesn't appear to be a substantive issue for not engaging in voluntary self-disclosures, he said.

BIS has received an average of 180 voluntary self-disclosures per year since 2005. Dellicolli said 97 percent of the closed cases resulted only in a warning letter and no penalties.

President Bush's signing of the International Emergency Economic Powers Act in November raised the maximum penalty amount for civil violations of the export control regulations from $11,000 per violation to $250,000 per violation, or by twice the value of the transaction that is the basis for the violation. For criminal violations, persons may be fined up to $1 million and/or up to 20 years in jail.

Since 2004, BIS has stated that voluntary self-disclosures are a 'great weight' mitigating factor when determining the amount of export penalties to assess.

I've been here six to seven months and I have never seen the maximum penalty applied, Dellicolli said.

This isn't about the penalties. The penalties don't roll back into the agency for us to use, he said. Compliance is where the rubber meets the road. We're just trying to find the right balance in compliance.