Voluntary self-disclosure of antiboycott violations

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1. A separate channel for antiboycott matters

The Export Administration Regulations (EAR) have their own procedure for disclosing antiboycott violations (15 CFR 764.8). It covers violations of part 760 on restrictive trade practices or boycotts. It also covers violations of the part 762 recordkeeping rules for records related to part 760. The rule calls these together the antiboycott provisions.

The Bureau of Industry and Security (BIS) strongly encourages disclosure to its Office of Antiboycott Compliance (OAC) by anyone who believes they may have violated those provisions (15 CFR 764.8(a)). Voluntary self-disclosures (VSDs) are a mitigating factor for any enforcement action OAC might take. Disclosures of other EAR violations are prepared under section 764.5 instead (15 CFR 764.8(b)(1)). That section provides for disclosure to the Office of Export Enforcement, as set out in voluntary self-disclosure of export violations.

2. Limits on the procedure

The procedure does not apply to violations of EAR provisions other than the antiboycott provisions (15 CFR 764.8(b)(1)). It applies only to information given to OAC for its review in deciding on administrative action under parts 764 and 766 (15 CFR 764.8(b)(2)). It also applies only if OAC receives the VSD before it starts an investigation or inquiry based on the same or substantially similar information from another source (15 CFR 764.8(b)(3)).

Two timing rules shape that test. A mandatory report under section 760.5 that shows a prohibited action counts as information from another source (15 CFR 764.8(b)(3)(i)). A violation revealed by a person seeking advice from OAC by telephone or email does not (15 CFR 764.8(b)(3)(ii)). That revelation is also not itself a VSD or an initial notification of one.

3. How much a disclosure counts

A VSD is weighed together with all the other factors in a case (15 CFR 764.8(b)(4)). BIS alone decides its weight, and aggravating factors may outweigh its mitigating effect. A VSD does not bar referral of the transactions to the Department of Justice to be prosecuted. If that happens, BIS tells Justice about the VSD, and Justice decides how to consider it.

A firm is treated as having disclosed only if the individual acted with the full knowledge and authorization of senior management, or of a person with authority to disclose for the firm (15 CFR 764.8(b)(5)). The rule gives no person or business any right, benefit, privilege or protection that can be enforced in law or equity (15 CFR 764.8(b)(6)).

4. The initial notification

A discloser should notify OAC as soon as possible after discovering violations, then thoroughly review all transactions where violations are suspected (15 CFR 764.8(c)(1)). The initial notification must be in writing (15 CFR 764.8(c)(2)). It should name the discloser and briefly describe the suspected violations, with their general nature and extent.

If the discloser later completes the narrative account, the disclosure is treated as made on the date of the initial notification (15 CFR 764.8(c)(2)). That date is the one used to test whether OAC received the VSD before starting an investigation (15 CFR 764.8(b)(3)).

5. The review and the narrative account

The review should cover all business transactions where possible antiboycott violations are suspected (15 CFR 764.8(c)(3)). OAC recommends a look-back of five years from the initial notification, since a shorter review risks missing violations that may later be investigated. Undisclosed violations do not get the same mitigation as disclosed ones. Not disclosing them is not a separate violation, unless another EAR section or another law enforced by BIS requires disclosure.

OAC should then receive a narrative account full enough to judge the nature and gravity of the suspected violations (15 CFR 764.8(c)(3)). It should also explain how the review was done and any steps taken to reduce the chance of future violations. It should state the kind of violation, for example furnishing a certificate that the goods did not originate in a boycotted country (15 CFR 764.8(c)(3)(i)).

It should say when the violations occurred and how, including the surrounding activities (15 CFR 764.8(c)(3)(ii)). The rule gives contract negotiations, sale of goods, implementation of a letter of credit and bid solicitation as examples. It should identify, with full names and addresses, every individual and organization involved, foreign or domestic (15 CFR 764.8(c)(3)(iii)). It should describe any mitigating factors (15 CFR 764.8(c)(3)(iv)).

6. Documents, certification and meetings

Supporting copies should include boycott certifications and declarations relating to the violation (15 CFR 764.8(c)(4)(i)(A)). Documents containing prohibited language or prohibited requests for information belong here too. Other records include letters, facsimiles, telexes, negotiations, internal memoranda, purchase orders, invoices, bid requests, letters of credit and brochures (15 CFR 764.8(c)(4)(i)(B)).

Relevant documents not attached must be kept until the latest of five events (15 CFR 764.8(c)(4)(ii)). These are supply to OAC, notice from BIS that it will take no action, a warning letter, or a final agency order with all appeals exhausted. The fifth is the date the documents no longer need to be kept under part 762, described in keeping and producing export records.

A certification must state that every representation made with the VSD is, to the best of the discloser’s knowledge and belief, true and correct (15 CFR 764.8(c)(5)). An official with authority should sign for a corporation or other organization, and the false statements rule in section 764.2(g) applies. OAC believes oral presentations are generally unnecessary, so a discloser wanting a meeting should ask for one in the disclosure (15 CFR 764.8(c)(6)).

7. Where to send it and what OAC does

VSDs and related correspondence should be submitted to the Office of Antiboycott Compliance, 14th and Pennsylvania Avenue NW, Room 6098, Washington, DC 20230 (15 CFR 764.8(c)(7)). Once it has the narrative and supporting documents, OAC acknowledges the disclosure by letter and names a point of contact (15 CFR 764.8(d)). It then takes any further action it deems appropriate, including more investigation.

BIS may then say it plans no action, or issue a warning letter (15 CFR 764.8(d)(1), 15 CFR 764.8(d)(2)). It may issue a proposed charging letter and try to settle under section 766.18 (15 CFR 764.8(d)(3)). It may issue a charging letter under section 766.3 if no settlement is reached or it otherwise deems this appropriate (15 CFR 764.8(d)(4)). It may also refer the matter to the Department of Justice for criminal prosecution (15 CFR 764.8(d)(5)). Supplement no. 2 to part 766 describes how BIS typically decides whether to bring an antiboycott case and what sanctions to seek (15 CFR 764.8(e)).

Key terms

OAC	The Office of Antiboycott Compliance, which receives antiboycott VSDs.
Antiboycott provisions	Part 760 and the related part 762 record rules.
Another source	Information OAC gets other than through the VSD, including mandatory reports.
Narrative account	The full written report sent to OAC after the review.
Supplement no. 2	The part 766 guidance on antiboycott enforcement decisions.

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

Boycott-related requests can arrive in ordinary commercial documents. 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.