On April 18, 2023, the U.S. Department of Commerce (“DOC”) Assistant Secretary of Export Enforcement released a report clarifying the DOC’s policy on Voluntary Self-Disclosure (“VSD”) and Disclosures Concerning Others (“DCO”). Addressing first its policy on VSD, the new policy sought to further incentivize the submission of VSDs when industry or academia uncover “significant” possible violations of the EAR that reflect potential national security harm. Per the clarification, when there is deliberate non-disclosure of significant possible violation, DOC will now consider the decision not to file a VSD as an aggravating factor under its existing guidelines.
With regard to the policy shift on DCO, per the clarification, when a company becomes aware that some other company’s conduct may have violated EAR, and discloses such conduct, and that tip results in enforcement actions, that disclosure will now be considered a mitigating factor if a future enforcement action is brought against the disclosing party. In addition to the above benefits, the disclosing party may also be eligible for monetary reward when the conduct disclosed includes potential sanctions violations.
Please reach out to the attorneys at Harris Sliwoski Sliwoski, LLP at (206) 224-5657 should you have any questions.