BIS Issues Statement Clarifying Implementation of IEEPA Enhancement Act Penalties
As a follow-up to the comments made by Under Secretary of Commerce for Industry and Security Mario Mancuso today at Update 2007, the Bureau of Industry and Security (BIS) this evening issued on its website important information clarifying the implementation of the enhanced penalties contained in the International Economic Powers Act (IEEPA) Enhancement Act that was recently passed by Congress and signed into law on October 16, 2007.
Significantly, the fact sheet issued states that BIS will generally not pursue the enhanced civil penalties of $250,000 specified in the IEEPA Enhancement Act in the following five circumstances:
- Violations with respect to which a valid Voluntary Self-Disclosure (VSD) initial notification was submitted to BIS in accordance with Part 764.5(c)(2) (export control violations) or Part 764.8(c)(2) (antiboycott violations) of the EAR prior to October 16, 2007;
- Violations with respect to which BIS filed charging letters with an Administrative Law Judge prior to October 16, 2007;
- Violations with respect to which BIS has approved settlement offers or issued settlement offers prior to October 16, 2007, if settlement is reached prior to BIS filing a charging letter with an Administrative Law Judge;
- Violations with respect to which BIS issued proposed charging letters prior to October 16, 2007, if settlement is reached prior to BIS filing a charging letter with an Administrative Law Judge; and
- Violations with respect to which the parties have executed a statute of limitations waiver prior to October 16, 2007, whether or not a proposed charging letter has been issued, and settlement is reached prior to BIS filing a charging letter with an Administrative Law Judge.
In a statement released in connection with the issuance of the information relating to the IEEPA Enhancement Act, Under Secretary of Commerce for Industry and Security Mario Mancuso said that “We welcome the enhancements provided by Congress and the President” and the “new law provides significant additional support for our cases, which we intend to apply in an equitable, deliberative and rigorous way. Most important, we think the enhancements will better align incentives to improve overall compliance with our regulations.”
The significant changes provided under the IEEPA Enhancment Act include:
- Additional Unlawful Acts: Section 206(a) of IEEPA is amended to clarify that civil penalties may be assessed against those who conspire to violate, or cause a violation of any license, order, regulation, or prohibition of title 50 of the United States Code.
- Administrative Penalties: A civil penalty amounting to the greater of $250,000, or twice the value of the transaction that is the basis of the violation (Enhanced Penalties), may be imposed for each violation of IEEPA.
- Effective Date/Retroactivity: The new civil penalties apply to enforcement action that are pending, which BIS interprets an action to be if a Final Order has not been signed, or commenced on or after October 16, 2007.
- Criminal Penalties: Violators can be fined up to $1,000,000 and/or up to 20 years in prison. Additionally, criminal liability is provided for anyone who “willfully conspires to commit, or aids or abets in the commission of” an unlawful act described in the statute.