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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 11 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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<h2 class="wp-block-heading">Key Notes:</h2>
<ul class="wp-block-list">
<li>The final rule took effect September 16. It codifies the series of &ldquo;policy memoranda&rdquo; BIS began issuing in 2022 to clarify the agency&rsquo;s evolving attitude toward voluntary self-disclosures, which in turn aimed to encourage companies, universities and individuals to engage in the process after believing a violation of the Export Administration Regulations, or any order, license, or authorization issued thereunder, had been violated.</li>
<li>The final rule also updates the BIS Penalty Guidelines for the first time since June 2016, thus modifying how BIS calculates and applies penalties for export control violations.</li>
<li>The changes to the BIS Penalty Guidelines confer greater discretion to BIS in enforcement proceedings, signifying the agency&rsquo;s renewed aggressive posture to clamp down on export control violations.</li>
</ul>
<p>On September 12, 2024, the Department of Commerce&rsquo;s Bureau of Industry and Security (BIS) published a <a href="https://public-inspection.federalregister.gov/2024-21013.pdf?utm_campaign=pi+subscription+mailing+list&amp;utm_medium=email&amp;utm_source=federalregister.gov" target="_blank" rel="noreferrer noopener">final rule</a> revising the voluntary self-disclosure provisions and penalty guidelines of the Export Administration Regulations (EAR). The revisions to the voluntary self-disclosure (VSD) process modify the regulations about conduct that constitutes a violation of the EAR and the possible sanctions for such violations by incorporating the three policy memoranda BIS has announced every year beginning in 2022. The three memoranda have: (1) highlighted BIS&rsquo;s desire to focus its limited resources on addressing more serious export control violations; (2) introduced mechanisms for exporters to more easily submit VSDs; and (3) expanded incentives for exporters who choose to submit a VSD. (For additional background information regarding these policy memoranda see <a href="https://www.thompsonhinesmartrade.com/2023/04/commerce-issues-policy-memo-to-incentivize-more-disclosures-of-export-violations/" target="_blank" rel="noreferrer noopener">April 25, 2023 Update</a> and <a href="https://www.thompsonhine.com/insights/bis-issues-policy-memo-on-the-voluntary-self-disclosure-process/" target="_blank" rel="noreferrer noopener">January 31, 2024 Update</a>.) The revisions also update Supplement No. 1 to Part 766 of the EAR entitled &ldquo;Guidance on Charging and Penalty Determinations in Settlement of Administrative Enforcement Cases,&rdquo; (BIS Penalty Guidelines) by granting greater latitude to BIS when calculating and imposing penalties in administrative cases in response to an apparent export control violation. Both revisions under the September 12 final rule took effect September 16, 2024. </p>
<p><strong>View the entire client update in <a href="https://www.thompsonhine.com/insights/bis-enhances-its-enforcement-discretion-revamps-voluntary-self-disclosure-process-abolishes-penalty-caps-and-amends-penalty-guidelines/" target="_blank" rel="noreferrer noopener">HTML</a> or <a href="https://admin.thompsonhine.com/wp-content/uploads/2024/10/BIS-Enhances-Its-Enforcement-Discretion-Revamps-Voluntary-Self-Disclosure-Process-Abolishes-Penalty-Caps-and-Amends-Penalty-Guidelines.pdf" target="_blank" rel="noreferrer noopener">PDF</a> format.</strong></p>

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SmarTrade

Partner

Francesca M.S. Guerrero

Samir D. Varma

Associate

Aaron C. Mandelbaum

Senior Legislative and Regulatory Policy Advisor

Scott E. Diamond

International Trade

BIS Enhances Its Enforcement Discretion: Final Rule Revamps Voluntary Self-Disclosure Process, Abolishes Penalty Caps and Amends Penalty Guidelines