Global Investigations Review Quotes Akin Trade Partner Kevin Wolf on BIS Memo

For its article “BIS memo “shifts equation” for companies considering voluntary disclosure of illegal exports, lawyers say,” Global Investigations Review quoted Akin international trade partner Kevin Wolf. The article looks at a recent policy update published in a memo from the Commerce Department Bureau of Industry and Security (BIS) Assistant Secretary for Export Enforcement that discusses the potential consequences faced by companies if they fail to voluntarily self-report significant potential breaches of U.S. export controls. The memo, writes GIR, emphasizes that the decision to withhold disclosure of serious violations will be viewed as an aggravating factor, potentially resulting in substantially higher penalties during future settlement negotiations.

Kevin, who served as Assistant Secretary of Commerce for Export Administration, Bureau of Industry and Security said that it is unclear whether the BIS memo will make a fundamental difference for companies contemplating disclosure, adding “The jury’s still out on what the impact would be.”

He said that the memo does not represent a tangible departure from the existing rules and guidelines set by the BIS: “You're still not going to be punished for the mere act of not disclosing when compelled. It's just a factor to be considered in a highly subjective judgment as to what the penalty would be.” Similarly, he said that, for decades, the BIS has encouraged companies to disclose possible export violations by their competitors, noting, “That’s not new at all.”

That said Kevin noted that the memo is, in fact, noteworthy because it clearly delineates the disadvantages of not voluntarily self-disclosing a substantial violation, while also highlighting the advantages of reporting a competitor's wrongdoing: “What you’re seeing is not so much a change in the rules, in my view, it’s just much more visible.”

He said that the Department of Commerce has been more outspoken about cracking down on export violations, particularly due to heightened geopolitical tensions with Russia and China. Additionally, he noted, the Biden administration has allocated more resources to enforcement efforts and has been fostering closer collaboration with U.S. allies in this regard.