On April 18, 2023, the US Department of Commerce’s (“DOC”) Assistant Secretary for Export issued a report clarifying DOC’s policy on Voluntary Self-Disclosure (“VSD”) and disclosures about other (“DCO”). Addressing its VSD policy first, the new policy was intended to further incentivize the filing of VSDs when industry or academia discovers potential “significant” violations of the EAR that reflect potential harm to national security. Under the clarification, where there is willful non-disclosure of a potential significant violation, DOC will now consider the decision not to file a VSD as an aggravating factor under its existing guidelines.
With respect to the change in policy on DCOs, according to the clarification, when a company becomes aware that another company’s conduct may have violated the EAR and discloses that conduct, and such advice results in enforcement action , such disclosure will now be considered a mitigating factor. if a future enforcement action is commenced against the disclosing party. In addition to the above benefits, the disclosing party may also be eligible for a monetary reward when the disclosed conduct includes potential sanctions violations.
If you have any questions, please contact the attorneys at Harris Bricken Sliwoski, LLP at (206) 224-5657.
