Comments on: BIS Fines Exporter For Filing Voluntary Disclosure

By: ExportLawBlog » BIS Demands Pink Slips in Export Cases

ExportLawBlog » BIS Demands Pink Slips in Export Cases — Wed, 21 Feb 2007 19:27:28 +0000

[...] This is more fallout from the brouhaha that this blog started when it criticized the outcome in the EP MedSystems case and suggested that because of that case, a company should think long and hard before filing a voluntary self-disclosure with BIS. The new article reiterates BIS’s argument that VSDs often result in a 50 percent reduction of the maximum allowable penalty. As I’ve said before, this approach by BIS is somewhat disingenuous given BIS’s well-known ploy of trying to turn single exports into multiple violations. In all events, I am reviewing these new materials and will post my analysis of them later. [...]

By: Bryon Pelzek

Bryon Pelzek — Thu, 28 Dec 2006 16:13:21 +0000

At issue are six shipments of seven items of heart monitor equipment valued at $510,590. The equipment was shipped by EPMed to Iran between March 2001 and April 2004 without a license.

I find issue that you need a license to ship something to a different country!!! Pretty soon you will need a license to expel flatulance in America.

By: Mike Deal

Mike Deal — Fri, 01 Dec 2006 19:58:31 +0000

I respectfully disagree that the notion “that companies should never file a voluntary disclosure with BIS unless they are almost certain that BIS will otherwise discover the problematic export” is “wisdom”. Statements on the SED or other “export control documents” constitute continuing representations and the regs require that they be corrected as soon as contrary info is discovered. Filing a corrected SED doesn’t get you any brownie points for anything except non-material technical violations. Continuing to act with respect to illegally exported products, e.g., providing warranty support, or technology is a separate violation.

Rather, I suggest that the real conventional wisdom is to never, ever submit a self-disclosure without first conducting a rigorous investigation and/or audit that tests the truth of the statements made in the disclosure. What this case proves is that its better just to disclose the facts, and nothing but the facts, rather than rely on after-the-fact, self-serving recollections that attempt to excuse or justify the mistake.

By: Clif Burns

Clif Burns — Thu, 16 Nov 2006 02:57:28 +0000

“Jo export” is correct that I mistakenly stated that a BIS license would have been required for the TSRA-eligible exports to Iran. BIS licenses TSRA exports to Cuba, and OFAC licenses the remaining TSRA exports. I have updated the post to reflect that.

As to Jo’s claim that I am “not familiar” with the case, I am relying on the only information which BIS has made public about the case on its website, namely the charging letter, settlement agreement and order. If Jo has material information about the case which is not in the charging letter and which would affect my arguments, Jo would do the export community (and BIS) a favor by sharing such information with this blog’s readers.

By: Jo export

Jo export — Thu, 16 Nov 2006 02:40:07 +0000

As you were too busy not being familiar with and mis representing the facts of the case, you mistakenly stated that a “BIS license” would have been required. BIS does NOT issue export licenses for IRAN…that would be OFAC.