DOJ Issues New Guidance for Disclosure on Sanctions and Export Control Lapses

The U.S. Department of Justice (DOJ), in collaboration with the Department of Commerce's Bureau of Industry and Security (BIS) and the Treasury Department's Office of Foreign Assets Control (OFAC), has released joint compliance guidance focused on voluntary self-disclosure policies pertaining to U.S. sanctions, export controls, and other national security laws. The note includes recent updates to certain policies and aims to inform the private sector about enforcement trends while offering guidance to businesses on compliance with U.S. sanctions and export laws.

Assistant Attorney General Matthew G. Olsen of the DOJ's National Security Division emphasized the importance of American businesses in safeguarding national security as gatekeepers for sensitive technologies and key participants in the financial system. Responsible companies that promptly self-disclose potential sanctions and export control violations can benefit from the protections provided by these self-disclosure policies.

Assistant Secretary Matthew S. Axelrod of the Department of Commerce's Office of Export Enforcement underscored that industry serves as the first line of defense in protecting cutting-edge technology from falling into the wrong hands. The joint compliance note encourages companies to report any potential rule violations and offers concrete benefits for doing so.

The compliance note provides details on the voluntary self-disclosure policies of BIS, the DOJ's National Security Division, and OFAC, while highlighting recent updates related to these policies. Additionally, it mentions the Financial Crime Enforcement Network (FinCEN)'s Anti-Money Laundering and Sanctions Whistleblower Program, which incentivizes individuals both in the United States and abroad to provide information to the government about violations of U.S. trade and economic sanctions, as well as the Bank Secrecy Act.

Director Andrea Gacki of the Treasury Department's Office of Foreign Assets Control stressed the importance of open communication between the public and private sectors, especially as adversaries increasingly employ sophisticated methods to evade international sanctions and export controls. Taking advantage of the voluntary self-disclosure policy can benefit companies by potentially mitigating penalties and help protect the U.S. financial system.

The note emphasizes the significance of an effective and robust compliance program. If a company discovers a potential violation, whether administrative or criminal, it must promptly disclose and remediate the issue. Reporting such violations not only makes the disclosing company potentially eligible for significant mitigation but also alerts national security agencies to activities that may pose a threat to U.S. government national security and foreign policy objectives.

Implications for Compliance Teams:

• Compliance teams should be aware of the joint compliance note issued by the DOJ, BIS, and OFAC, as it highlights the importance of voluntary self-disclosure policies in relation to U.S. sanctions, export controls, and national security laws.
• The guidance underscores the significance of having an effective and robust compliance program in place to promptly identify and report potential violations.
• Companies that promptly self-disclose violations can benefit from protections and potential mitigations, making it crucial for compliance teams to have efficient reporting mechanisms.
• Compliance teams should stay informed about any updates to voluntary self-disclosure policies to ensure adherence to the latest regulatory requirements and take advantage of benefits for their organizations.

The new joint compliance guidance issued by the DOJ, BIS, and OFAC emphasizes the critical role of voluntary self-disclosure in combating money laundering, sanctions violations, and export control lapses. For compliance teams, this guidance serves as a valuable resource to navigate the complexities of U.S. sanctions and export laws, promoting open communication between the public and private sectors. By promptly self-disclosing potential violations and maintaining effective compliance programs, companies can not only protect themselves from severe penalties but also contribute to safeguarding national security and foreign policy objectives. Staying vigilant about updates to voluntary self-disclosure policies will enable compliance teams to stay ahead of enforcement trends and ensure their organizations remain in compliance with the evolving regulatory landscape.