BIS Proposes 180-day Deadline for VSD Narrative Accounts of EAR Violations
The Bureau of Industry and Security proposed to limit the time period for submission of comprehensive narrative accounts for voluntary self-disclosures (VSDs) to within 180 days of the initial VSD notification. BIS’ proposed rule would also authorize use of delivery services other than registered or certified mail for providing notice of a charging letter beginning an enforcement proceeding under the Export Administration Regulations, and remove the phrase “if delivery is refused” from a provision setting the date of service for notices of charging letters based on attempted delivery to the respondent’s last known address. Comments on the proposed rule are due by Jan. 7.
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Date of VSD Set at Notification Date if Narrative Submitted; No Current Deadline for Narrative
VSDs of potential EAR violations are typically afforded “great weight” as a mitigating factor. Section 764.5 of the EAR requires an initial notification that includes a description of the general nature and extent of the suspected violations, followed by a thorough review and narrative account of the suspected violations, including all supporting documentation. If the person who submits the initial VSD notification later completes the narrative account, the disclosure is deemed to be submitted to BIS on the date of the initial notification. This date is significant because the information can only be considered a VSD if it occurs before the date on which BIS discovers the violation by other means. The EAR does not currently set a date for submission of the narrative account.
Proposed Rule Would Set 180-day Deadline for Narrative; Extendable in Some Circumstances
The proposed rule would amend 15 CFR 764.5(c)(2) to set a 180-day deadline for persons that have submitted initial VSD notifications to submit comprehensive narrative accounts of the violations to the BIS Office of Export Enforcement. BIS said it would extend this date under certain circumstances, including:
- Records or information from multiple entities and/or jurisdictions are needed to complete the narrative account.
- Material changes occur in the business, such as a bankruptcy, large layoffs, or a corporate acquisition or restructuring, and present difficulties in gaining access to, or analysis of, information needed to complete the narrative account.
- A pending U.S. Government determination (such as a commodity jurisdiction determination or a classification request) is needed to complete the narrative account.
BIS said it would reserve the right to set conditions for an extension, such as tolling of the statute of limitations or remedial compliance measures. Failure to meet the 180-day deadline would not in itself be an EAR violation, BIS said, but could reduce or eliminate the mitigating impact of the VSD.
Notification of Charging Letter by Express Mail or Commercial Carrier Would be Allowed
BIS is also proposing to amend 15 CFR 766.3(b)(1) to allow notification of issuance of a BIS charging letter by means other than registered or certified mail. Specifically, BIS would be allowed to send the notification by express mail or commercial carrier in order to notify parties in countries where no registered or certified mail service exists. Express mail and commercial carriers also provide detailed tracking data for use by BIS.
Proposal Would Remove Requirement of Proof of Delivery Refusal for 'Attempted Delivery'
Finally, the proposed rule would amend 15 CFR 766.3(c) to remove the requirement that attempted delivery of charging letters must involve documentation that a delivery was refused. Currently, BIS requires respondents to answer charging letters within 30 days of the date of delivery of the BIS charging letter notification. Attempted delivery also begins that time period if the notification was refused. Not all countries provide proof of refusal of delivery, however, so BIS would remove the requirement of proof of refusal to satisfy attempted delivery and begin the time period for answers to charging letters.