Avoiding & Mitigating Penalties

Exporters have paid as much as $20 million to settle charges levied by the State Department, and the Administration is asking Congress to raise the maximum penalty chargeable by the Commerce Department to the greater of $5 million or 10 times the value of the exports involved – per violation. Criminal convictions carry prison terms of up to five years. The government can also suspend a company’s right to export merely upon suspicion of a violation.

When violations are suspected or alleged, the first task is an internal investigation to determine the nature and scope of the problem. To protect the attorney-client and work-product privileges, it is essential that such investigations be conducted by, or at the direction of, a knowledgeable attorney.

If the government has yet to discover any violations, the next question is whether to make a voluntary disclosure under the relevant agency’s regulations. In all cases, avoidance of a criminal referral is the first goal and negotiation of a consent decree is the usual course.

Where settlement is not reached, administrative and criminal charges are tried before administrative law judges or in the United States District Courts.

Export Compliance NE is experienced in all of these arenas.