Law Firm: DOJ Declination Signals Export Control Disclosures Still Will Be Rewarded
DOJ’s recent decision to decline to prosecute a NASA contractor for export control violations shows that the agency is still planning to reward companies that self-report possible breaches and cooperate with the government, WilmerHale said in a client alert this week.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
“This development underscores that companies should continue to view the DOJ’s [voluntary self-disclosure] policy, which encourages self-disclosure and cooperation as conditions of potential non-prosecution agreements, as integral to internal compliance programs,” the law firm said.
DOJ in April said it wouldn’t be prosecuting the Universities Space Research Association because the organization quickly self-reported an employee’s China-related export control violations and demonstrated “exceptional and proactive” cooperation with DOJ’s National Security Division (see 2504300038). WilmerHale said there have been questions about the Trump administration’s “ongoing commitment to national security corporate enforcement,” including enforcement of export control and sanctions violations, but this declination is an “important early sign” that the administration will continue to prioritize enforcement and will reward corporate cooperation and compliance.
It added that companies should take this as a signal to make sure they’re prepared to carry out “prompt and accurate disclosures of potential export control and sanctions violations,” including violations by employees. “This DOJ action and the reasoning behind it demonstrate that DOJ continues to expect companies to come forward as soon as they uncover potential wrongdoing and will respond favorably to those that do,” the alert said.
But the firm also noted that DOJ’s strategy includes the “credible threat of prosecution,” and the agency could choose to make an example of a firm that decides not to disclose or cooperate with the government.
“Just as DOJ has touted the rewards of good behavior here,” the firm said, “DOJ may be inclined to make strong deterrent examples of those companies that do not have adequate compliance programs in place or attempt to delay or avoid notifying law enforcement.”