[Code of Federal Regulations] [Title 15, Volume 2] [Revised as of January 1, 2002] From the U.S. Government Printing Office via GPO Access [CITE: 15CFR764.5] [Page 518-521] TITLE 15--COMMERCE AND FOREIGN TRADE CHAPTER VII--BUREAU OF EXPORT ADMINISTRATION, DEPARTMENT OF COMMERCE PART 764--ENFORCEMENT AND PROTECTIVE MEASURES--Table of Contents Sec. 764.5 Voluntary self-disclosure. (a) General policy. BXA strongly encourages disclosure to OEE if you believe that you may have violated the EAR, or any order, license or authorization issued thereunder. Voluntary self-disclosure is a mitigating factor in determining what administrative sanctions, if any, will be sought by OEE. (b) Limitations. (1) The provisions of this section do not apply to disclosures of violations relating to part 760 of the EAR. (2) The provisions of this section apply only when information is provided to OEE for its review in determining whether to take administrative action under part 766 of the EAR for violations of the export control provisions of the EAR. (3) The provisions of this section apply only when information is received by OEE for review prior to the time that OEE, or any other agency of the United States Government, has learned the same or substantially similar information from another source and has commenced an investigation or inquiry in connection with that information. (4) While voluntary self-disclosure is a mitigating factor in determining what administrative sanctions, if any, will be sought by OEE, it is a factor that is considered together with all other factors in a case. The weight given to voluntary self-disclosure is solely within the discretion of OEE, and the mitigating effect of voluntary self-disclosure may be outweighed by aggravating factors. Voluntary self-disclosure does not prevent transactions from being referred to the Department of Justice for criminal prosecution. In such a case, OEE would notify the Department of Justice of the voluntary self-disclosure, but the consideration of that factor is within the discretion of the Department of Justice. (5) A firm will not be deemed to have made a disclosure under this section unless the individual making the disclosure did so with the full knowledge and authorization of the firm's senior management. (6) The provisions of this section do not, nor should they be relied on to, create, confer, or grant any rights, benefits, privileges, or protection enforceable at law or in equity by any person, business, or entity in any civil, criminal, administrative, or other matter. (c) Information to be provided. (1) General. Any person wanting to disclose information that constitutes a voluntary self-disclosure should, in the manner outlined below, initially notify OEE as soon as possible after violations are discovered, and then conduct a thorough review of all export-related transactions where violations are suspected. (2) Initial notification. (i) The initial notification should be in writing and be sent to one of the addresses in Sec. 764.5(c)(7) of this part. The notification should include the name of the person making the disclosure and a brief description of the suspected violations. The notification should describe the general nature and extent of the violations. If the person making the disclosure subsequently completes the narrative account required by Sec. 764.5(c)(3) of this part, the disclosure will be deemed to have been made on the date of the initial notification for purposes of Sec. 764.5(b)(3) of this part. (ii) OEE recognizes that there may be situations where it will not be practical to make an initial notification in writing. For example, written notification may not be practical if a shipment leaves the United States without the required license, yet there is still an opportunity to prevent acquisition of the items by unauthorized persons. In such situations, OEE should be contacted promptly at one of the offices listed in Sec. 764.5(c)(7) of this part. (3) Narrative account. After the initial notification, a thorough review should be conducted of all export-related transactions where possible violations are suspected. OEE recommends that the review cover a period of five years prior to the date of the initial notification. If your review goes back less than five years, you risk failing to discover violations that may later become the subject of an investigation. Any violations not voluntarily disclosed do not [[Page 519]] receive consideration under this section. However, the failure to make such disclosures will not be treated as a separate violation unless some other section of the EAR or other provision of law requires disclosure. Upon completion of the review, OEE should be furnished with a narrative account that sufficiently describes the suspected violations so that their nature and gravity can be assessed. The narrative account should also describe the nature of the review conducted and measures that may have been taken to minimize the likelihood that violations will occur in the future. The narrative account should include: (i) The kind of violation involved, for example, a shipment without the required license or dealing with a party denied export privileges; (ii) An explanation of when and how the violations occurred; (iii) The complete identities and addresses of all individuals and organizations, whether foreign or domestic, involved in the activities giving rise to the violations; (iv) License numbers; (v) The description, quantity, value in U.S. dollars and ECCN or other classification of the items involved; and (vi) A description of any mitigating circumstances. (4) Supporting documentation. (i) The narrative account should be accompanied by copies of documents that explain and support it, including: (A) Licensing documents such as licenses, license applications, import certificates and end-user statements; (B) Shipping documents such as Shipper's Export Declarations, air waybills and bills of lading; and (C) Other documents such as letters, facsimiles, telexes and other evidence of written or oral communications, internal memoranda, purchase orders, invoices, letters of credit and brochures. (ii) Any relevant documents not attached to the narrative account must be retained by the person making the disclosure until OEE requests them, or until a final decision on the disclosed information has been made. After a final decision, the documents should be maintained in accordance with the recordkeeping rules in part 762 of the EAR. (5) Certification. A certification must be submitted stating that all of the representations made in connection with the voluntary self- disclosure are true and correct to the best of that person's knowledge and belief. Certifications made by a corporation or other organization should be signed by an official of the corporation or other organization with the authority to do so. Section 764.2(g) of this part, relating to false or misleading representations, applies in connection with the disclosure of information under this section. (6) oral presentations. OEE believes that oral presentations are generally not necessary to augment the written narrative account and supporting documentation. If the person making the disclosure believes otherwise, a request for a meeting should be included with the disclosure. (7) Where to make voluntary self-disclosures. The information constituting a voluntary self-disclosure or any other correspondence pertaining to a voluntary self-disclosure may be submitted to: Office of Export Enforcement, Director, Intelligence Division, U.S. Department of Commerce, P.O. Box 70, Washington, D.C. 20044 Office of Export Enforcement, Director, Intelligence Division, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Room H-4520,Washington, D.C. 20230, Tel: (202) 482-1208, Facsimile: (202) 482-0964, or to any of the following field offices: Special Agent in Charge, Boston Field Office, Office of Export Enforcement, New Boston Federal Building, 10 Causeway Street, Room 350, Boston, Massachusetts 02222, Tel: (617) 565-6030, Facsimile: (617) 565- 6039 Special Agent in Charge, Chicago Field Office, Office of Export Enforcement, 2400 East Devon, Suite 300, Des Plaines, Illinois 60018, Tel: (312) 353-6640, Facsimile: (312) 353-8008 Special Agent in Charge, Dallas Field Office, Office of Export Enforcement, 525 Griffin Street, Room 622, Dallas, Texas 75202, Tel: (214) 767-9294, Facsimile: (214) 767-9299 Special Agent in Charge, Los Angeles Field Office, Office of Export Enforcement, 2601 Main Street, Suite 310, Irvine, California 92714-6299, Tel: (714) 251-9001, Facsimile: (714) 251-9103 Special Agent in Charge, Miami Field Office, Office of Export Enforcement, 200 East Las [[Page 520]] Olas Boulevard, Suite 1260, Fort Lauderdale, Florida 33301, Tel: (954) 356-7540, Facsimile: (954) 356-7549 Special Agent in Charge, New York Field Office, Office of Export Enforcement, Teleport II, 2 Teleport Drive, Staten Island, New York 10311-1001, Tel: (718) 370-0070, Facsimile: (718) 370-0826 Special Agent in Charge, San Jose Field Office, Office of Export Enforcement, 96 North 3rd Street, Suite 250, San Jose, California 95112- 5572, Tel: (408) 291-4204, Facsimile: (408) 291-4320 Special Agent in Charge, Washington, D.C. Field Office, Office of Export Enforcement, 8001 Forbes Place, Room 201, Springfield, Virginia 22151- 0838, Tel: (703) 487-4950, Facsimile: (703) 487-4955. (d) Action by the Office of Export Enforcement. After OEE has been provided with the required narrative and supporting documentation, it will acknowledge the disclosure by letter, provide the person making the disclosure with a point of contact, and take whatever additional action, including further investigation, it deems appropriate. As quickly as the facts and circumstances of a given case permit, OEE may take any of the following actions: (1) Inform the person making the disclosure that, based on the facts disclosed, it plans to take no action; (2) Issue a warning letter; (3) Issue a proposed charging letter pursuant to Sec. 766.18 of the EAR and attempt to settle the matter; (4) Issue a charging letter pursuant to Sec. 766.3 of the EAR if a settlement is not reached; and/or (5) Refer the matter to the Department of Justice for criminal prosecution. (e) Criteria. For purposes of determining what administrative action to take and what sanctions, if any, to seek, the fact that a voluntary self-disclosure has been made will be a mitigating factor. OEE will take that factor into account along with other mitigating and aggravating factors when determining what, if any, administrative sanctions should be imposed. The factors that OEE will consider are in its sole discretion, but may include: (1) The extent to which the purpose of the control is undermined by the transaction; (2) Whether the transaction would have been authorized had proper application been made; (3) The quantity and value of the items involved; (4) Why the violations occurred. For example, OEE may consider whether the violations were intentional or inadvertent; the degree to which the person responsible for the violation making the disclosure was familiar with the EAR; and whether the violator has been the subject of prior administrative or criminal action under the EAA or the EAR; (5) Whether, as a result of the information provided, OEE is able to prevent any items exported illegally from reaching unauthorized persons or destinations; (6) The degree of cooperation with the ensuing investigation; (7) Whether the person has instituted or improved an internal compliance program to reduce the likelihood of future violations. (f) Treatment of unlawfully exported items after voluntary self- disclosure. (1) Any person taking certain actions with knowledge that a violation of the EAA or the EAR has occurred has violated Sec. 764.2(e) of this part. Any person who has made a voluntary self-disclosure knows that a violation may have occurred. Therefore, at the time that a voluntary self-disclosure is made, the person making the disclosure may request permission from BXA to engage in the activities described in Sec. 764.2(e) of this part that would otherwise be prohibited. If the request is granted by the Office of Exporter Services in consultation with OEE, future activities with respect to those items that would otherwise violate Sec. 764.2(e) of this part will not constitute violations. However, even if permission is granted, the person making the voluntary self-disclosure is not absolved from liability for any violations disclosed nor relieved of the obligation to obtain any required reexport authorizations. (2) A license to reexport items that are the subject of a voluntary self-disclosure, and that have been exported contrary to the provisions of the EAA or the EAR, may be requested from BXA in accordance with the provisions of part 748 of the EAR. If the applicant [[Page 521]] for reexport authorization knows that the items are the subject of a voluntary self-disclosure, the request should state that a voluntary self-disclosure was made in connection with the export of the commodities for which reexport authorization is sought. [61 FR 12902, Mar. 25, 1996, as amended at 62 FR 25469, May 9, 1997]