BIS Final Rule on New "Penalty Guidance" Concerning the Settlement of Administrative Enforcement Cases
The Bureau of Industry and Security (BIS) has issued a final rule, effective February 20, 2004, that amends 15 CFR Parts 764 and 766 of the Export Administration Regulations (EAR) by incorporating a guidance document (guidance) entitled, "Supplement No.1 to Part 766 - Guidance on Charging and Penalty Determinations in Settlement of Administrative Enforcement Cases."
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According to BIS, the guidance addresses how BIS makes penalty determinations when settling administrative enforcement cases under the EAR, and also addresses related aspects of how BIS responds to violations of the EAR, such as charging decisions.
BIS states that this final rule also amends 15 CFR Parts 764 and 766 to conform to this guidance.
In addition, BIS discusses in its final rule the comments received and the extent to which they were adopted.
Guidance Concerns Certain BIS Charging and Penalty Determinations
BIS states that the guidance identifies both general factors, such as the destination for the export and degree of willfulness involved in violations, and specific mitigating and aggravating factors which BIS typically takes into account in determining an appropriate penalty.
The guidance also describes factors that BIS' Office of Export Enforcement (OEE) typically considers in describing whether a violation should be addressed in a warning letter, rather than in an administrative enforcement case.
(BIS notes that the guidance does not apply to antiboycott matters arising under 15 CFR Part 760.)
Conforming Amendments to 15 CFR Parts 764 and 766
The final rule also makes conforming amendments to the following: 15 CFR 764.5(e) (Voluntary self-disclosure); 15 CFR 766.3(a) (Issuance of charging letters); and 15 CFR 766.18(f) (Settlement of cases).
BIS Responds to Comments Received
In its final rule, BIS discusses the comments received and the extent to which they were adopted. For example, in response to comments suggesting that BIS provide guidance on compliance with the "catch-all" license requirements of the Enhanced Proliferation Control Initiative (EPCI) contained in 15 CFR 744, BIS states that it expects to address these issues through separate action.
In response to a suggestion that BIS add a new "great weight" mitigating factor for steps taken to address compliance concerns raised by the violation, including efforts to prevent the reoccurrence of the violation, BIS states that it has revised "great weight" Mitigating Factor 2 of the guidance to include such steps.
(See ITT's Online Archives or 09/18/03 news, 03091815, for BP summary of the proposed rule.)
BIS contact - Roman Sloniewsky (202) 482-5301
BIS final rule (D/N 030909226-4048-02, FR Pub 02/20/04) available at http://a257.g.akamaitech.net/7/257/2422/14mar20010800/edocket.access.gpo.gov/2004/pdf/04-3639.pdf