Penalties for export violations

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1. Administrative sanctions

The Export Administration Regulations (EAR) describe the sanctions for violations (15 CFR 764.3(a)). Violations of the Export Control Reform Act (ECRA), the EAR or any order, license or authorization are subject to administrative sanctions and to any other liability, sanction or penalty available under law (15 CFR 764.3(a)). The protective administrative measures in section 764.6 are distinct from these sanctions.

2. Civil monetary penalties

A civil monetary penalty not exceeding the amount set in ECRA may be imposed for each violation (15 CFR 764.3(a)(1)(i)). Where an EAR provision is continued or revised by the International Emergency Economic Powers Act (IEEPA) or another authority, the maximum penalty for each violation is the one that authority provides.

Payment can be tied to export privileges (15 CFR 764.3(a)(1)(ii)). For up to two years after a penalty is imposed, payment may be made a condition of granting, restoring or continuing any export license, license exception, permission or privilege for that person (15 CFR 764.3(a)(1)(ii)). Payment may be deferred or suspended, in whole or in part, during any probation period (15 CFR 764.3(a)(1)(iii)). That does not bar collection if the conditions of the deferral, suspension or probation are not met.

3. Denial of export privileges

An order may restrict the ability of named persons to engage in exports, reexports and in-country transfers involving items subject to the EAR, or their access to such items (15 CFR 764.3(a)(2)). A denial order may be a sanction for a violation of ECRA, the EAR or another statute set out at 50 U.S.C. 4819(e)(1)(B). It may also be a protective administrative measure, as a temporary denial order or a denial based on a criminal conviction.

A denial order may suspend or revoke any or all outstanding EAR licenses issued to the named person or in which that person has an interest. It may deny or restrict exports, reexports and transfers by or to the person of any item subject to the EAR. And it may restrict dealings in which the person may benefit from any export, reexport or transfer of such items.

The standard terms of a denial order are set out in supplement no. 1 to part 764 (15 CFR 764.3(a)(2)), and a narrower, non-standard order may be issued. The Office of Exporter Services, in consultation with the Office of Export Enforcement, may authorize actions a denial order would otherwise prohibit. That requires a written request from a person named in the order or from a person seeking permission to deal with one.

4. Exclusion from practice

Representatives can be excluded (15 CFR 764.3(a)(3)). The rule covers any person acting as an attorney, accountant, consultant, freight forwarder or other representative on a license application or other matter before the Bureau of Industry and Security (BIS). Such a person may be barred by order from any or all such activities (15 CFR 764.3(a)(3)).

5. Criminal penalties

Whoever willfully commits, willfully attempts to commit, willfully conspires to commit, or aids and abets an unlawful act described in 50 U.S.C. 4819(a) shall be fined not more than $1,000,000 (15 CFR 764.3(b)). In the case of an individual, the penalty is imprisonment for not more than 20 years, or both the fine and imprisonment. Criminal sanctions are imposed by a U.S. court, while the administrative sanctions are imposed by BIS (15 CFR 764.1).

6. Statutory sanctions

Conduct that violates ECRA or the EAR, and other conduct specified in sections 11A, 11B and 11C of the Export Administration Act, may draw further sanctions or measures (15 CFR 764.3(c)). Statutorily mandated sanctions may be imposed for specified conduct related to weapons proliferation (15 CFR 764.3(c)(1)). They are not civil or criminal penalties.

Some restrict imports and procurement, under section 11A on multilateral export control violations and section 11C on chemical and biological weapons proliferation. Others restrict export licenses, under section 11B on missile proliferation violations and the Iran-Iraq Arms Non-Proliferation Act of 1992.

7. Seizure, forfeiture and other agencies

Any property seized under the export laws and regulations the Secretary administers or enforces is subject to forfeiture, under 50 U.S.C. 4819(d) and 4820(j), 22 U.S.C. 401 and 13 U.S.C. 305 (15 CFR 764.3(c)(2)(i)). Other agencies may act as well.

The Department of State may not issue licenses or approvals for defense articles and services under the Arms Export Control Act to some persons (15 CFR 764.3(c)(2)(ii)(A)). They are persons convicted of offenses specified at 22 U.S.C. 2778(g)(1)(A), and persons denied export privileges by BIS or another agency (15 CFR 764.3(c)(2)(ii)(A)). It may deny such licenses or approvals where the applicant is indicted for, or any party to the export is convicted of, those offenses. The Department of Defense, among other agencies, may suspend a person’s right to contract with the U.S. Government based on export control violations, under 48 CFR 9.407-2 (15 CFR 764.3(c)(2)(ii)(B)).

8. Related consequences elsewhere in the EAR

The Office of Exporter Services may revoke a license in which a person had an interest when that person was convicted under a section 11(h) statute (15 CFR 750.8(a)). That revocation is at the discretion of the Secretary of Commerce. At the discretion of the Secretary of Commerce, a person convicted under such statutes may be barred from applying for licenses for up to 10 years from the conviction (15 CFR 750.7(e)). Acting contrary to a denial order or temporary denial order is itself a violation (15 CFR 764.2(k)). The violations themselves are covered in the violations under the EAR.

9. The two tracks side by side

The part separates administrative action by BIS from criminal sanctions imposed by a court (15 CFR 764.1). On the administrative side, the tools are civil penalties, denial of export privileges and exclusion from practice (15 CFR 764.3(a)). On the criminal side, the penalty for willful violations reaches a $1,000,000 fine and, for individuals, up to 20 years in prison (15 CFR 764.3(b)). Statutory sanctions, forfeiture and action by other agencies sit alongside both (15 CFR 764.3(c)).

Key terms

Civil monetary penalty	A per-violation penalty capped by ECRA or another authority.
Denial order	An order restricting a person’s export privileges.
Exclusion from practice	Barring a representative from matters before BIS.
Statutory sanctions	Mandated proliferation sanctions that are not penalties.
Forfeiture	Loss of seized property to the government.

Every statement above links to the document behind it. The full source list for this piece is on the sources page.

This page describes public United States government programs for general information. It is not legal, regulatory or procurement advice, and it does not address the facts of any particular case.

How Sentfore supports this

The cost of a violation reaches well beyond the shipment involved. Sentfore works at the delivery end of defense programs in difficult environments, providing secure movement, protective security, facilities and life support. Requirements can be sent through the contact page.