Voluntary self-disclosure of export violations

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1. The policy on disclosure

The Bureau of Industry and Security (BIS) strongly encourages disclosure to its Office of Export Enforcement (OEE) (15 CFR 764.5(a)). The encouragement covers anyone who believes they may have violated the Export Administration Regulations (EAR) or an order, license or authorization issued under them (15 CFR 764.5(a)). As described in supplement no. 1 to part 766, voluntary self-disclosure (VSD) is a mitigating factor in deciding what administrative sanctions, if any, OEE will seek. A firm’s deliberate decision not to disclose significant apparent violations is an aggravating factor. Such a decision occurs when a firm uncovers a significant apparent violation it committed and chooses not to file a VSD.

2. Limits on the VSD provisions

The provisions do not apply to disclosures of antiboycott violations under part 760 (15 CFR 764.5(b)(1)). They apply only when information is given to OEE for its review in deciding whether to take administrative action under part 766 for violations of the export control provisions (15 CFR 764.5(b)(2)). They apply only if OEE receives the information before OEE, or any other U.S. agency, has learned the same or substantially similar information from another source and started an investigation or inquiry (15 CFR 764.5(b)(3)).

Disclosure is weighed with all other factors, the weight given to it is solely within OEE’s discretion, and aggravating factors may outweigh it (15 CFR 764.5(b)(4)). It does not prevent referral to the Department of Justice for criminal prosecution. In that case OEE tells Justice about the disclosure, and how Justice weighs it is within Justice’s discretion.

A firm is not treated as having disclosed unless the individual making the disclosure did so with the full knowledge and authorization of the firm’s senior management (15 CFR 764.5(b)(5)). The provisions create no rights, benefits, privileges or protection enforceable at law or in equity in any matter (15 CFR 764.5(b)(6)).

3. Minor or technical violations

A person disclosing a minor or technical violation should submit an abbreviated narrative report (15 CFR 764.5(c)(1)). Such a violation has none of the aggravating factors defined in section III(A) of supplement no. 1 to part 766. Examples include immaterial Electronic Export Information filing errors, and inadvertent recordkeeping violations from failed retrieval or retention mechanisms, such as flood or fire damage or electronic corruption from malware, a virus or an outage. Another example is using one license exception incorrectly when other exceptions were available.

The abbreviated report should go by email to the BIS VSD intake address or in writing to OEE, and the email subject line should include the word abbreviated (15 CFR 764.5(c)(2)). It should name the person making the disclosure and a contact person with a business street address, email and telephone number (15 CFR 764.5(c)(2)(i)(A)). It should describe the general nature and extent of the violations (15 CFR 764.5(c)(2)(i)(B)), including destinations, parties and the number, classification and value of the items. Violations may be itemized in a list or spreadsheet.

If OEE suspects aggravating factors, its Director may request a full narrative report, due within 180 days of the request (15 CFR 764.5(c)(2)(ii)). Parties may bundle minor or technical violations from the preceding quarter into one submission, on a quarterly basis, using the abbreviated process (15 CFR 764.5(c)(3)).

4. Significant violations: the initial notification

A person disclosing a significant violation should notify OEE as soon as possible after discovering it, then thoroughly review all export-related transactions where violations are suspected (15 CFR 764.5(d)(1)). A significant violation involves one or more aggravating factors. Anyone unsure which category applies should follow the procedure for a significant violation. The initial notice uses the same email or written channels as the abbreviated report, and the address for written submissions is set out in paragraph (d)(7) of the rule.

The initial notification should go by email or in writing (15 CFR 764.5(d)(2)(i)). It should name the discloser and a contact person, and briefly describe the general nature and extent of the suspected violations. Where writing is not practical, for example where a shipment leaves the United States without the required license but there is still time to stop unauthorized persons acquiring the items, OEE should be contacted promptly. An oral notice should be confirmed in writing as soon as possible (15 CFR 764.5(d)(2)(ii)).

5. The 180-day clock

The initial notification date is the date OEE receives it, and OEE confirms that date in writing (15 CFR 764.5(d)(2)(ii)). The full narrative account must reach OEE within 180 days of that date, absent an extension (15 CFR 764.5(d)(2)(iii)). If it does, the whole disclosure, including violations not mentioned in the initial notice, is treated as made on the initial notification date, provided the initial notice met the rules. That date is the one used to test whether OEE received the information before learning of it from another source (15 CFR 764.5(b)(3)). The same applies to a narrative received within any extension the OEE Director grants (15 CFR 764.5(d)(2)(iii)).

Missing the deadline is not an additional violation, but it may reduce or eliminate the mitigating effect of the disclosure. A complete narrative must contain all the pertinent information the rule calls for.

6. Extensions

The OEE Director may extend the 180 days if government interests would be served or the discloser shows that more time is reasonably needed (15 CFR 764.5(d)(2)(iv)). Conditions may be imposed, such as agreeing to toll the statute of limitations or taking interim remedial compliance measures (15 CFR 764.5(d)(2)(iv)(A)). A request should show that the review began promptly, has proceeded as expeditiously as can be expected, still needs the extension, and that interim corrective measures have been considered and taken as appropriate (15 CFR 764.5(d)(2)(iv)(B)).

The request should propose a reasonable timeline and name a contact person. Requests should be made before the deadline, as soon as the discloser knows it cannot meet it and has the information needed for the request (15 CFR 764.5(d)(2)(iv)(C)). Requests received after the deadline are not considered. A request made shortly before the deadline risks going undecided in time, and a narrative filed afterward may then be treated as untimely. The full narrative and OEE’s response are covered in the VSD narrative and how OEE responds.

Key terms

VSD	A voluntary self-disclosure to OEE.
Abbreviated narrative report	The short form for minor or technical violations.
Initial notification	The first notice of a significant violation, which starts the clock.
Aggravating factor	A factor defined in supplement no. 1 to part 766 that makes a violation significant.
Bundling	Combining a quarter’s minor violations in one submission.

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

Early disclosure is part of a sound compliance program. 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.