Avoid Costly Mistakes With US Export Administration Regulations (EAR) Compliance and Penalties
If you are cited for violating the US Export Control and commerce regulations, 15 CFR 730-774 (2007) (EAR), you can face both criminal and administrative penalties. United States Export Administration Regulations are focused on keeping dangerous goods out of the wrong hands. Therefore, the government has established a high level of oversight.
- Investigations for violating Export Administration Regulations can be costly – keeping your reputation is essential.
- You have certain legal rights that you want to protect.
- Export control administration violations carry stiff penalties.
- Keeping compliant with ITAR requirements and relevant laws can save businesses a substantial amount of fines and litigation.
ITAR & Export Administration Regulations – Penalties
Criminal penalties can reach 20 years imprisonment and $1 million per violation. Administrative monetary penalties can reach $11,000 per violation and $120,000 per violation in cases involving items controlled for national security reasons. See also information about the North American Trade Agreement Act.
When the Act is in lapse, the criminal and administrative penalties are set forth in the International Emergency Economic Powers Act (IEEPA). If companies are involved in allegations or found to have violated USML and export administrative regulations and compliance requirements, they can also be subject to denial of their export privileges. See information on ITAR requirements and associated laws.
Extended liability: Avoiding penalties associated with Export Administration Regulations is especially important because companies are not only liable for their own violations but may also be liable for doing business with companies with denied privileges.
If your export privileges are denied, it will prohibit you from participating in any EAR export transaction.
- Under ITAR regulations, you also cannot take part at any level with a person who has denied privileges.
- You must continually conduct due diligence when it comes to EAR and ITAR compliance.
EAR Regulations & ITAR Compliance
Do you have the right manuals in place? All businesses or individuals subject to export control regulations and ITAR laws must fully comply with the commerce control list. After getting export control certified, it is just as important to implement internal policies and controls. This includes having export control manuals in place.
Commerce Control Compliance Involves:
- Controlled goods and technologies;
- Restrictions on shipping to certain controlled foreign countries, companies, organizations, and/or individuals.
The Office of Export Enforcement has a list of Red Flags that you may want to review to stay proactive and compliant under the USML Regulations.
Figuring out if your products or technology are regulated by the Export Administration Regulations and under the respective Commerce Control List (CCL) requires detailed application and experience. Companies find themselves falling short of EAR compliance regulations. As a result, they find themselves subject to fines and penalties.
Common failures include encryption regulations in Category 5 part 2 of the CCL. Exporters often need help in these areas. Companies should also pay special attention to EAR regulations that overlap and conflict with each other. Examples include the Commerce Control List and the U.S. Munitions List.
If you are facing possible criminal or civil liability under the US Export Administration Regulations or compliance with export control law requirements or need help with compliance, call 1-866-601-5518. Call our ITAR compliance lawyers. FREE INITIAL CONSULTATION.